Skip to content Skip to footer

A Quiet War on Students

Students stand to gain a lot from federal student aid legislation in Congress, but lenders have assembled an arsenal of PR campaigns, lobbyists, and campaign contributions.

Students stand to gain a lot from federal student aid legislation in Congress, but lenders have assembled an arsenal of PR campaigns, lobbyists, and campaign contributions.

Banks and loan corporations have quietly declared war on students this year, using an arsenal of more than two dozen lobbyists, an ambitious public relations campaign, and millions of dollars to kill legislation that would make college more affordable.

Lenders seem to be terrified of the Student Aid and Fiscal Responsibility Act (SAFRA), a bill in Congress that seeks to reform federal student loan policies by putting lending power and oversight into the hands of the government through the exising Direct Lending Program and ending the tax-subsidized Federal Family Education Loan (FFEL) program. By saving money through the elimination of a private middle man in lending to students, the proposal would free more funds for improving college access and completion rates. The bill that the House of Representatives passed in September is supported by the Obama Administration, and is expected to be addressed in the Senate following the health care debate.

The student loan industry, led by lenders like Sallie Mae and Nelnet, which have posted increased stock earnings on Wall Street, is doing everything it can to stop such reform. In October, SAFRA opponents introduced a website called Protect Student Choice, a public relations campaign run by Qorvis Communications, a Washington D.C. lobbying firm specializing in “corporate communications on national and international levels,” according to the company’s website.

“This is very much a grassroots campaign,” says Don Goldman, a partner with Qorvis. But there no indication of who is sponsoring the campaign on the website, and the domain name is registered to an anonymous proxy service based in Portugal. The only way to contact the campaign from the website is to sign on to a petition against SAFRA.

“I guess our feeling was that you could join the campaign with e-mail and we could get back to you,” says Goldman about the elusive nature of contact information on the site. “Or I think we’ve been written about a fair amount, about how we’re the ones who’ve sort of organized the campaign. We’re not trying to be anything but transparent on this.”

The Protect Student Choice campaign highlights the voice of a single student opposed to SAFRA, Patrick McBride, a Vanderbilt freshman. About 9,000 individuals have signed a petition against bill on the site, according to the Qorvis spokesperson. That’s in comparison to the more than 40,000 people who signed a similar on-line petition supporting reform.

While Qorvis characterizes Protect Student Choice as a grassroots campaign, the firm says the National Council of Higher Education Loan Programs (NCHELP), an interest group of approximately 160 lenders and collection agencies, is paying for the website.

“The lenders [and] the services that they have developed for students and schools are very strong and they’re concerned that if the program is eliminated those services will no longer be available,” says Karen Lanning, a spokesperson for the council. “All the expertise that has been created in this community would also to the large part be lost.”

In lieu of mustering popular support among students, in November, Qorvis and its clients took a different approach to messaging. Now, there is another website, nearly identical to, called, which focuses on an alleged number of jobs that could be lost if SAFRA were to become law. Protect Student Choice’s header has been updated to read “Protect Student Choice/Protect Local Jobs,” essentially merging the campaigns.

An email message sent out from a Sallie Mae email employee, Allison Smythe, on Nov. 16 read, “Legislation being considered in the U.S. Senate puts jobs like mine at risk and I need your support.” The email urges readers to visit the Protect Local Jobs site and sign on to the anti-SAFRA petition to “protect good, family-supporting jobs across the country.” Despite the Sallie Mae e-mail, Goldman still claims that “Sallie Mae is not part of the coalition.”

The campaign claims that SAFRA would eliminate as many as 35,000 jobs. But the estimate is based solely on the total number of FFEL jobs that currently exist, and doesn’t consider the lender jobs that would still be needed to service student loans made before SAFRA. What’s more, if reform passes, loans would be owned by the government, but they would also be contracted out to be serviced by lenders and create new jobs, according to the legislation. To date, the overall impact of the legislation on jobs has not been fully analyzed, but many jobs likely would be created or saved through federal investments in community colleges, minority serving institutions, early childhood education, and other efforts.

“They pay attention to what we’re doing, but they don’t pay. They don’t contribute any money,” says the Qorvis spokesperson, who denies a “big bank” influence. “We’ve tried to keep our distance from them.”

On top of a media campaign to sway public opinion on reform, opponents have hired no fewer than 26 lobbyists to influence lawmakers on Capitol Hill, with Sallie Mae employing a total of 21, according to the most recent lobbyist disclosure records published in October. Records also show that the Nelnet, NCHELP, Sallie Mae, and PNC bank, the chief lenders that oppose SAFRA have spent at least $4 million on lobbying costs since the beginning of the year. Sallie Mae alone hired two new lobbying firms this year and, as of October, had nearly matched its entire lobbying spending from 2008. The company spent nearly $3 million by October of this year versus just over $3.5 million in all of 2008.

Amy Tejral, a lobbyist with Avenue Solutions, a firm paid by Nelnet, was the former legislative director for Sen. Ben Nelson (D- Neb.) Qorvis managing director Scott McCullers is also a former legislative assistant to Nelson.

Sallie Mae employs company lobbyist Carmen Guzman Lowrey, who worked closely with Sen. Barbara Boxer (D-Calif.). Donni Turner, a lobbyist for the Podesta Group, a firm Sallie Mae hired in March, also used to be a legislative assistant to Sen. Dick Durbin (D-Ill.).

Qorvis Communications donated $2,400 to Nelson’s campaign committee in June, shortly before SAFRA was introduced in the House, campaign finance reports show. Nelnet also gave $5,000 to Nelson’s Nebraska Leadership committee in September.

While Nelson is restricted from using contributions to his Nebraska Leadership committee for his own campaigning purposes, the money can go to support other candidates.

Nelnet is a major servicer of FFEL loans, but Jake Thompson, a spokesperson for Nelson, says the money has not influenced Nelson’s decision to oppose reform that would eliminate the FFEL program.

“In his campaigns for public office, he’s received contributions from thousands and thousands of individuals and organizations,” Thompson says.

However, the majority of Nelson’s campaign cash has come from Nebraska-based Nelnet’s political action committee since 2005, according to the nonprofit Center for Responsive Politics. Additionally, Nelson’s PAC has given thousands to members of the U.S. Senate Committee on Health, Education, Labor and Pensions, which is responsible for legislation concerning the student loan industry and where SAFRA would be debated in the Senate.

“We give to a lot to centrist candidates like Nelson mostly because it’s kind of where our business is,” Goldman says.

Goldman says that Protect Student Choice is about “making sure schools and universities have their choice of who they want to be getting loans from,” though he admits that, despite the premise of student choice in the campaign, students “are sort of stuck with what the schools decide.” For now, schools can get loans through the FFEL program or through the direct lending program, but if SAFRA becomes law, schools will have only one choice: direct lending that will save taxpayers money.

Erin Rosa is an associate editor at Campus Progress.

The stakes have never been higher (and our need for your support has never been greater).

For over two decades, Truthout’s journalists have worked tirelessly to give our readers the news they need to understand and take action in an increasingly complex world. At a time when we should be reaching even more people, big tech has suppressed independent news in their algorithms and drastically reduced our traffic. Less traffic this year has meant a sharp decline in donations.

The fact that you’re reading this message gives us hope for Truthout’s future and the future of democracy. As we cover the news of today and look to the near and distant future we need your help to keep our journalists writing.

Please do what you can today to help us keep working for the coming months and beyond.