On Wednesday, Senate Republicans blocked passage of Sen. Elizabeth Warren’s Bank on Students Emergency Loan Refinancing Act, a bill that would alleviate heavy debt by fixing interest rates and giving borrowers the ability to refinance both private and public loans.
The vote came two days after President Barack Obama signed an Executive Order to make it easier for student loan holders to pay back their debt. Now, students holding public debt can benefit from monthly repayments capped at ten percent of their income, the Department of Education will renegotiate interest rates with private lenders, and the government will collaborate with non- and for-profit institutions to publicize repayment programs.
Sen. Warren’s bill was introduced on June 4th, so we don’t yet know which interests have spent money lobbying on the specific bill, but the student lending industry has spent millions on campaign cash and lobbyists over the years to influence the debate in Washington.
Here are a few facts about these companies.
- Sallie Mae’s PAC and employees have made over $7 million in campaign contributions over the past twenty years, according to the Center for Responsive Politics. Wells Fargo, which has stayed in the student loan business after other big banks have exited and ranks second among the nation’s largest private student lenders, after Sallie Mae, is a well known heavy hitter in Washington—Wells Fargo PAC and employees has given more than $14 million to candidates and parties over the years. Another politically active student lender is Nelnet, whose PAC and employees have donated $1.3 million to federal candidates since the 1998 cycle.
- In the first quarter of 2014, Sallie Mae spent $1.25 million on lobbying. In just three months, the lender spent nearly half of what it spent in each previous full year in 2012 and 2013. Wells Fargo spent $1.57 million on lobbying in the first quarter of 2014.
- Sen. Lamar Alexander (R-Tenn.) recently stated that all student borrowers need is just a job to repay loans. He is is the third top recipient of Sallie Mae money in the Senate.
The majority of Millennials view student debt as a major problem and nearly seven in ten acknowledge that finances – not just academics – are a major factor in choosing a college, but too often, they don’t have the resources to make their voices heard in politics like these big lenders, distorting the process.