Some great pieces have come out the last week about the political debate over the Student Aid and Fiscal Responsibility Act (SAFRA) on that vast series of tubes we call the Internet. SAFRA would eliminate a government program (the Federal Family Education Loan Program, or FFELP) that involves large, wasteful federal subsidies to student loan companies, and use the $87 billion in savings to raise Pell grants, improve access and completion rates, invest in minority serving institutions and historically black colleges and universities, and more.
It should come as no surprise that when Student Loan Analytics explored the topic of student opinion on SAFRA, they found many student newspapers in support of the legislation, and none opposed to it. In fact, when they searched Google for “students who support FFELP,” they got a very familiar message for anyone who has spent much time on Google:
No results found for “students who support FFELP”
And why should students support FFELP? As Student Lending Analytics pointed out before, FFELP offers students little to nothing in terms of choice, despite lender claims to the contrary. Billions in additional need-based grant funding for low- and middle-income students seems, obviously, more valuable to both students and taxpayers than preserving subsidies for lenders.
So where does opposition to SAFRA come from? Opensecrets.org points to the obvious—the student loan industry, which stands to lose an easy source of government funding, is peddling its influence on Capitol Hill.
Opensecrets.org pointed to the fact that lawmakers who voted against SAFRA got an average of $2,986 more in political contributions from loan giant Sallie Mae over the past 20 years than those who voted in favor of the bill. Perhaps more shockingly, the group found that:
The most notable discrepancy in campaign contributions from SLM Corp. is to House Democrats. The four Democrats who opposed the legislation have brought in $32,721 more, on average, from SLM Corp. than the 247 who helped pass the bill ($36,650 versus $3,929).
Two of the Democrats who voted in the minority, Reps. Paul Kanjorksi of Pennsylvania and Allen Boyd of Florida, are among the top members of the House—including members of both parties—to benefit from SLM Corp. cash. The company has given Kanjorski $95,900 since 1989, more than all other lawmakers but two. Boyd comes in at number seven, having collected $42,200 since he was elected in 1996.
Sallie Mae, just one of thousands of companies involved in FFELP, has already spent at least $2,120,000 since January lobbying against SAFRA, and for its expensive and flawed counter-proposal.