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The Student Loan Industry’s Messaging Machine at Work
As we reported on Tuesday, Qorvis Communications, a top public relations firm in Washington, has taken the lead in the student loan industry's efforts to manufacture grassroots student opposition to legislation that would eliminate the Federal Family Education Loan (FFEL) program. But getting students to rally behind an unpopular industry that profits from their indebtedness has not proven to be an easy task. The firm's desperation has become all too evident in recent weeks.
Take, for instance, the case of Patrick McBride. In a press release announcing the launch of its "Protect Student Choice" public relations effort, Qorvis officials listed McBride, a student at Vanderbilt University, as one of four "local campaign members" -- with the others being leaders of non-profit student loan agencies.
But who is McBride? A former colleague of ours, the enterprising Ben Miller of Education Sector, sought to find out. In an interview he conducted with McBride, Miller learned that he was a first-semester freshman who got interested in the issue while doing research on the Internet. McBride, who would not say whether or not he had taken out student loans (although he added that he "did not have a stake" in the issue), was initially "ambivalent" about the student loan reform legislation. But after talking to David Mohning, the university's financial aid director and a longtime supporter of the FFEL program, he was convinced that the bill was a bad idea.
McBride then wrote a column for the school's conservative publication the Vanderbilt Torch, decrying the measure as a "government intrusion into private markets" [despite the fact that FFEL is already a government program]. Soon after, Qorvis contacted him, asking whether he would be interested in participating in its campaign.
To be absolutely clear, we do not have any beef with McBride. Individuals are entitled to their own opinions, and far be it for us to object to them expressing their views in writing. But isn't it telling that after working for months to manufacture grassroots opposition among students, this is the best they could come up with? A first semester freshman, who may not have even borrowed student loans, writes a column in a college publication and suddenly becomes one of the campaign's chief spokesmen???
But contrary to reports, McBride is not the only student that Qorvis has recruited for this effort. The firm has actively courted the College Republican National Committee to mobilize its members to speak out against the legislation. Uncharacteristically, the group, which typically focuses on helping elect Republican candidates and training future Party leaders rather than taking positions on specific legislation, recently agreed to take part in the campaign.
Zach Howell, the national chairman of the College Republicans, made the announcement during a faux television interview conducted by Karen Hanretty, a managing director at Qorvis who previously served as the communications director for the National Republican Congressional Committee. "We're engaging our membership in any way we can on this issue," Howell said. "It certainly is important to them and to the future of higher education in this country."
During the interview, Howell acknowledged that he had not done a lot of research on the issue and demonstrated that he didn't fully understand how the federal student loan programs work. For instance, he warned that a shift to 100 percent direct lending would result in having "rates set in Washington," when of course they already are. He raised the specter of "long lines" at the financial aid office and "poor service," and said that "all sorts of burdensome regulations and difficulties will be placed on students and schools." The one example he gave was of California Polytechnic State University, whose "depleted Financial Aid office" (as described by the student newspaper) appears to have perennial problems administering federal financial aid (see here and here). Howell neglected to mention that the vast majority of schools that have made the transition to the Direct Loan program so far have found the process to be easier than they thought.
But, of course, it makes little difference to Qorvis officials whether the students it recruits have a firm grasp of what they are talking about (those who do probably wouldn't want to shill for the loan industry). They are simply looking for warm bodies to make it appear that there is a genuine grass roots movement against the legislation. Focusing on the College Republicans seems like an odd choice, considering that the bill's fate rests in the hands of moderate Democrats. The group does, however, boast of having more than 200,000 members and if the individual students are not upfront about their affiliation when they contact their lawmakers, they could provide the illusion that there is genuine student angst over the bill.
As we said on Tuesday, this is a truly cynical effort. It is indeed a prime example of special interest lobbying at its worst.
Pot Calling the Kettle Black
I chuckle every time Higher Ed Watch decries the lobbying efforts of anyone with an opposing view. Evidently freedom of speech and the right to petition government is okay if done by liberals in favor of big government. Anyone else and its another blog on the evils of those who would manipulate the system. A student who wishes to support the current system of choice and competition is not a "shill for the loan industry" anymore than Higher Ed Watch is a shill for Bob Shireman by supporting a government run loan program.
Mr. Lamb - is this what it
Mr. Lamb - is this what it has come to? The defenders of the useless middlemen questioning the questioner? Have the defenders of the ffelp and their middlemen given up as there is no substance to defend this corrupt and fraud ridden system?
Let's put the lackey, uneducated freshman aside and look at another uneducated individual. Mr. Rene Drouin, head of the NHHEAF is one of the three principals behind this "grassroots" effort. In 2004, Mr. Drouin was profiled in a CBS News report entitled "Top Officials Hold Fake Degrees." Mr. Drouin was profiled for his "education" from "Kensington University." "Kensington University" was shut down as a fraudulent diplomma mill by the state of California.
Mr. Drouin then decided to obtain a JD degree from LaSalle University. The reputable and accredited LaSalle University in Philadelphia does NOT offer a JD. A JD was; however, offered by the LaSalle University that was located in Louisiana before it was shut down by feds for being a fraudulent diploma mill and it's owner imprisoned.
Mr. Lamb, the question centers on the integrity and character of the individuals and organizations defending the useless middleman system of the FFELP. From the Financial Aid directors that took kickbacks to the recently deposed CEO of the NASFAA, to the 9.5% scandals of the supposed non-profits, to the whistle-blower suits, to Mr. Drouin's supposed education - the FFELP system is ripe with corruption and deficient character. Is that what you're defending?
Anonymous456 - You've missed
Anonymous456 - You've missed my point. I'm not "defending" anyone, simply pointing out that blogs like NAF are intolerant of differing points of view. Your over-the-top response shows your knowledge of the issues is about an inch deep. Financial aid officer kickbacks? I believe there are about 12,000 financial aid officers and something like five were found to have taken gifts or money. The rest are guilty of having their M&M jars refilled once a month by their local student loan lenders. There are far more members of Congress under suspicion of unethical behavior and there are only 535 of them. Don't believe everything you read, and for goodness sake, don't mistake NAF blogs as balanced journalism.
M&M's? Really, Mr Lamb?
M&M's? Really, Mr Lamb? M&Ms
Mr. Lamb, I am hardly repeating mere NAF blogs. Catherine Thomas, Lawrence Burt, and others lost their jobs owing to their corruption. In 2008, over 100 Universities were under investigation for more than 90% of their loans going to one provider. The 9.5% loan subsidy scandals continue unending. Mr. Day resigned from the NASFAA in disgrace as he was indicted for felonies. Teri Shaw, a former SLM'r resigned from the DOE in disgrace as her subordinate and also former SLM'r responsible for FFELP oversight and found to be taking money from FFELP lenders.
The institutional corruption was far, far more extensive than the seven or eight (not five) financial aid directors who lost their jobs for corruption. Of course, the corruption apologists in the NASFAA call such documented institutional corruption a "witch hunt." "M&M's in jars" is probably one of the most ridiculous understatements of what a United States Senate investigation found to be widespread corruption and malfeasance. So, Mr. Lamb, are you suggesting the Senate investigated the Student Loan industry because of "M&Ms?"
Need I continue with the documented corruption, I can - there are thousands of pages in BOTH Senate reports and thousands more in the press.
With regards to "protect student choice", Mr. Drouin is one of the more unsavory individuals involved in the student loan industry. He and his "diploma mill education" (as so called by CBS News) represent all that is wrong with the student loan industry - much more so than even Mr. Lord. The schools which Mr. Drouin attended were shut down by government officials for being frauds - I'm sure Mr. Drouin would defend a fraud institution such as Kensington University as eagerly as he defends the FFELP.
Students for choice is a mere sham run by Qorvis. Not that Qorvis doesn't raise eyebrows as it is, Mr. Drouin as a principal in this "organization" further raises questions of character and integrity.
In May 2004, CBS reported on Mr. Drouin's "education." In December of 2004, Federal officials raided three of four of Qorvis's offices and delivered subpoenas to the fourth. But I guess we shouldn't discuss that. I must be confused - I'm sure the Senate investigations, disgraced resignations, scandals, corruption, fines, and whistle-blower suits are all a misunderstanding over some "jars of M&M's." Just one question - is "jar of M&M's" official discussion jargon strategized by the corruption apologists at the NASFAA?
results of "investigations..."
Anon -- did any of these hundreds of investigations result in charges being filed, or disciplinary actions of any sort, other than those previously referenced five individuals? No, there was no punitive result because NO STUDENTS WERE HARMED. During most of the period these injustices were alleged to have taken place, a first year Stafford loan was $2,625 with interest rate and fees SET BY LAW. How did any student get harmed by being given one Stafford Loan or another when the terms are all the same? You cannot answer that, because you would inherently indict a Direct Loan school, where the students also are forced into a single provider. And the argument gets worse (for DL) when you look at a DL borrower paying a 3% origination fee, when his FFELP counterpart paid 0% fee, and then the FFELP borrower also enjoyed any number of interest rate or principal reductions after the loan entered repayment.
Again, and for the benefit of both parties to this debate, PLEASE PROVIDE EVIDENCE OF AN ACTUAL LAW BEING VIOLATED BY A FAO ANYWHERE EXCEPT Johns Hopkins, Columbia, Texas and Emerson. When you (or Eds. at NAF) actually post such evidence, then people like Mr. Lamb and me will shush up and eat crow.
Prison? Is that your
Prison? Is that your response? So it's M&M's or Prison?
So . . . lack of integrity, betrayal of trust, and diminished character leading to actions that compromise the education system of America is OK, so long as you don't end up in Prison? Really . . . that's your response?
Schools have been fined for their conflicts of interest. Laws have been passed to ensure that at least some of the scandalous actions are prohibited. In the House testimony supporting the FFELP - look at your representatives. Philip Day was indicted for Felonies and Rene Drouin, who has "bogus education" per a CBS News Report. Can't you people find anyone to support FFELP who is not scandal ridden? Who you got left? Is that the best you can do?
But if the official NASFAA position is that "actions originating from diminished character, lack of integrity and conflicts of interest are OK as long as you don't go to prison" - I wouldn't be surprised. The NASFAA has become a marginalized and meaningless organization left only with active membership of community colleges, for-profit "Schools" and those pining for the days of perks and payoffs.
Revelations of the past two years of Financial Aid Directors and the Student Loan Industry have the American Public looking down at the whole situation with disgust and contempt. The Financial Aid community is on the wrong side of this issue - showing again the arrogance that can arise from a lack of integrity and diminished character.
However, the damage is done. Trust for the Financial Aid Directors and the Student Loan Industry evaporated long ago. Rightfully so . . . neither deserves respect or trust. Eliminating the FFELP is a mere result of actions by all involved. You've shown you can't handle the responsibility. The Financial Aid Community and Student Loan Industry are merely realizing the consequences of their actions.
So . . . if you believe in your heart that ALL the Financial Aid Community has done is take a few extra M&Ms and nothing you've done is wrong as long as you've not gone to prison - then you've validated our contentions. Thank you - we need such visible arrogance of diminished character to eliminate the useless middlemen their financial aid henchmen.
We do; however, have the NDSLC, to give us hope for the future. Some are there for the right reasons, some not so altruistic - but it's a start.
Anonymous456 -- STILL NO
Anonymous456 -- STILL NO CONCRETE EVIDENCE! In your lengthy rant, you fail to offer one single piece of evidence.
1. which school was fined how much money for what conflicts?
2. which "scandalous actions" became prohibited by legislation?
3. Phillip Day's transgressions occurred in a previous role unrelated to NASFAA or even Title IV.
4. Rene Drouin, I will give you, is an insidious individual, but again, how is obtaining a fake degree really a crime that harms students?
5. name a "revelation" that elicited disgust and contempt?
6. The FAO community is suffering the consequences of WHAT ACTIONS? Still haven't listed anything that harmed students.
You have labeled as corrupt the NASFAA and by association each of its members. You have repeatedly posted emotional tirades, but again, NOT A SINGLE FACTUAL example, only broad generalizations and vague accusations.
We THANK YOU, Mr. Anonymous456 for so proudly displaying your obvious lack of credibility in this debate.
(prediction: another 8-paragraph rant about unnamed indiscretions and large bags of M&Ms) ROTFLMAO
PS I made no mention of prison anywhere.
deceptive petitioners on campus
Petitioners wearing T-shirts emblazoned with "Protect Delaware Jobs" have shown up on the campus of the University of Delaware. Some, at least, own up to being employed by area banks. Their petition has nothing written on it, but they are urging the students so sign, claiming they are opposing a federal take-over of all education loans. Students are signing without having any idea that they are maintaining the non-value added middle man who imposes his private tax on loans that already burden students with massive debt to pay off in a slow job market. Shameful.
if there is anyone out there that can help me please help me!!!!
I'm 27 years old, I got my undergraduate in 2005. I have several federal and private student loans...under circumstance I have been through a whole lot of personal issues as in moving,apt fire,losing four close friends and one still in a coma,family memeber with lupes, and got laid off from work. I have forbarance lot of my loan with the cicumstances, but I have two private loan that had defaulted, that I was not aware of until I got a phone called insisting on giving them the whole amount and now im getting harrass by the collection agency. I was willing to do a payment plan but they didn't want to work with me they just wanted the 12,000.00 to clear two of my private loans that defaulted, not only that my parents are co-signers so they are harrassing them as well. Who has 12,000.00 dollars to give in ths economic mess??? I just need some advice or help!!! I don't want to screw my parents credit, being that they are my co-signers. It's still in collections so it has effected our credit. PLEASE HELP ME!!!!! I DON'T KNOW WHAT TO DO..........
It is disgusting the way the
It is disgusting the way the student loan industry paints their unending pursuit of maximum profits (and thus maximum misery for students) as being anything but. The tragedy of this case, as always, is that college freshman are not well versed in financial matters--most of them haven't been living on their own and working (and that is a good thing.) But this leaves them as nothing but prey for the privitized corporate student loan industry, which has driven up tuition costs to extreme proportions, leaving students with tens of thousands of dollars in bad debt that they are stuck with for the rest of their lives. Then they get no assistance, but relentless attacks from the people who claimed they were only offering things seemingly beneficial such as "competitiveness" (where most people end up face down on the concrete) and "choice" (homeless shelter or park bench?)
We do need to kick all lobbyists out of washington, and let each person have their own voice--not just allow those with money to set policy through campaign contributions.
tuition costs
How, exactly, have private lenders driven up tuition costs? Schools did that, not lenders. Perhaps lenders have profited, but schools should be the target of at least some of the anger over student loan debt.
THE OBAMA MESSAGING MACHINE AT WORK
Am I alone in being amazed at the brazen implementation of the "Student Aid and Fiscal Responsibility Act" by the administration before it is enacted into law? Their interest in doing so is based on their desire to "score" budget savings that can be spent immediately on other education priorities (most of them having nothing to do with either making college more affordable or student debt burdens easier to manage).
In reading Tomas' plea to "let each person have their own voice" I was wondering if he is as upset by the administration's message machine as he is by that of the FFEL community.
Without further comment, here is a letter of Secretary Duncan to schools that attempts to convince them they have no choice but to join with him in implementing SAFRA before it is enacted:
THE SECRETARY OF EDUCATION
WASHINGTON, DC 20202
October 26, 2009
As this academic year moves forward, it is hard to believe we already need to consider the 2010-2011 year to come. In doing so, I am writing to seek your assistance and offer mine in taking the necessary steps to ensure uninterrupted access to federal student loans by ensuring your institution is Direct Loan-ready for the 2010-2011 academic year.
Eighteen months ago, uncertainty in the financial markets seriously threatened the availability of Federal Family Education Loan (FFEL) Program loans for the upcoming 2008-09 academic year. Congress acted quickly to provide the Department of Education with unprecedented temporary authority to directly finance loans made through FFEL Program lenders. The goal was to ensure that every student or parent with a need for a federal loan would be able to get one, whether or not the student’s educational institution had taken the steps to provide loans through the Direct Loan Program (where loan access was not affected). This stopgap measure, the Ensuring Continued Access to Student Loans Act (ECASLA), was helpful in assisting FFEL Program lenders in making $61.3 billion in new loans to students and their parents this past year. And the bulk of those funds—some $46.3 billion—was provided by the Department of Education.
While many institutions like yours continued to use the FFEL Program loan delivery process last year, more than 500 others responded to the uncertainty by switching to the Direct Loan Program. These colleges’ move to direct lending happened in an efficient and effective manner, without any interruption of service to students, and the number of Direct Loans increased by nearly two-thirds compared to the previous year. As you know, the Direct Loan Program provides students with the same types of loans, with essentially the same terms, as those made in the FFEL Program.
I do not anticipate any major loan access problems during the remainder of this academic year because Congress’s temporary measure remains in effect. However, while there are encouraging signs that the financial markets are rebounding, the most prudent course of action is for you to ensure that your institution is Direct Loan-ready for the 2010-2011 academic year. That way, loan access for your students will be assured. As you may know, President Obama has proposed that Congress make the loan system more reliable by moving to a 100 percent Direct Loan delivery system. In any event, under current law, ECASLA will expire, and the continued participation of FFEL Program lenders will be in question.
The Department of Education stands ready to assist with any questions you and your staff may have about becoming Direct Loan-ready. Many institutions have already taken the initial step of contacting us to ensure the appropriate transition steps have been taken at Federal Student Aid to begin the process. If your school has not taken this initial step, we recommend that you do so. Please also reach out to your technology, financial aid, and business offices to make sure they are working together to ensure federal loan access for your students and their parents. If they are unsure of the steps to take, please have them contact our school relations center at 1-800-848-0978, or e-mail us at DLEnrollment_FSA@ed.gov with questions.
Thank you for your attention to this important matter.
Arne
I have to laugh at this one
I have to laugh at this one Relevant Critic. Someone with your intimate knowledge of the inside-the-beltway crowd should know that laws are irrelevant when it comes to creating a more just and carbon-free society. The central planners have a once-in-a-lifetime opportunity to foist their big-government delusions upon us. They aren't going to let little things like people's jobs, the law, economics, or reality get in their way. We have no alternative but to sit back and watch the inevitable implosion at this point. Not to worry though, some people just have to learn the Pottery Barn rule the hard way!
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