Student Loan Firms Embark On Misinformation Campaign
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By Pedro de la Torre III, advocacy senior associate for campus
progress, the Center for American Progress - 12/02/09 07:43 PM ET
In the article “Private lenders focus on jobs in student loan
fight” (Dec. 1), student loan company representatives made several
problematic claims about the Student Aid and Fiscal Responsibility
Act, which would cut wasteful subsidies to student loan companies and
invest the $87 billion in savings to make college more affordable.
The crux of the private lenders’ misleading multi-million-dollar
campaign is the claim that the bill will kill 35,000 jobs. They fail
to mention that this number comes from a survey of student loan
companies by an association of lenders, and counts all workers
employed by loan companies, rather than expected job losses.
If the legislation passes, lenders will still need to service the
loans they have already made, and many offer other loan products or
services to schools.
Several will also be getting lucrative contracts from the Department
of Education to service federal direct loans, which would replace
their federally subsidized loans.
Further, the bill also contains funds for school modernization and
construction, grants for state programs to increase college access and
completion, investments in early education programs, and support for
community colleges and minority serving institutions. It would be
surprising if, even taking the lenders claims at face value, there
were not a net gain in jobs.
Congress should not be distracted by a lobbying and PR campaign by
lenders to keep their hands in the federal cookie jar. Congress should
focus instead on ensuring that their constituents have access to a
quality college education at an affordable price.