Lobbying 101 – college student loan cuts provoke campus activism

Lobbying 101 – college student loan cuts provoke campus activism – No Sacred Cows

Andrea Gilman

Who says student activism is dead? The “Contract With America” may have caused barely a stir on college campuses, but when congressional Republicans aimed their budget-cutting axes at the student-loan program, students took notice. They began staging demonstrations, organizing phone banks and writing letters to preserve the loans that almost 7 million college students rely on to pay their tuition.

And while they didn’t get the results they hoped for, college students learned some important, if difficult, lessons. The word from the graduates of Lobbying 101 is this: Because money talks, politics often wins out over common sense. Or in this case: Smooth-talking bankers packing campaign contributions and a free-market, anti-bureaucracy message out-muscled the students’ pleas for more loans with less hassle.

Both the Senate and House passed Republican-sponsored student-loan cuts in late October; differences in the respective plans conference committee for resolution. But for students, their parents and universities, all the potential outcomes looked bleak. Proposals on the table included a $10.8 billion cut in student-loan funding; a 10 percent limit on the volume of all student loans made directly by the government;. an annual 0.85 percent fee colleges would have to pay on their students’ loans; increased borrowing costs for parents; and elimination of the six-month-long, interest-free grace period students have between graduation day and the start of loan repayment.

But serious students of the process know there’s more to politicking than lobbying, and they’ve vowed to fight back at the ballot box. College Democrats of America and its local chapters have been conducting voter-registration drives on campuses across the country; since 1992 almost 500,000 students have registered.

“Students will not stand by as our Congress hacks away at our rights and ability to attend college,” Michael Shapiro, a 19-year-old Rutgers University sophomore, told some 100 students attending an October rally.

Thousands of students rallied against the loan cuts during “Save Student Aid” week in September, and students at Brown University had begun demonstrating last spring. Other campuses that saw student action included Washington, D.C.’s American University and Baltimore’s Loyola College, where 200 students participated in a phone bank. Students at D.C.’s Georgetown University organized several rallies, including a Capitol Hill demonstration that drew more than 200 students. But that rally, like many others, had an air of fatalism about it. “I don’t think our protests go a long way in changing [the Republicans’] minds,” one student said.

Maybe he’d heard about the lobbying being done on the other side of the issue. The Consumer Bankers Association (CBA), which represents more than 500 banks with a direct stake in the federal student-loan program; the Coalition For Student Loan Reform, an ad-hoc group of loan guaranty agencies; and secondary markets like Sallie Mae (the Student Loan Marketing Association) lobbied aggressively to increase their share of the $25 billion student-loan business.

The CBA’s Fritz Elmendorf says private-sector involvement offers students better service, but Sen. Paul Simon (D-Ill.) calls the loan industry’s position “pure commercial politics. Short of high-interest credit cards, guaranteed student loans are the most profitable loans a bank can make,” he says. Education Secretary Richard Riley has called the GOP cuts “a back-room sell-out to the special interests.”

Students needing money for their education will have fewer loan dollars available, and they’ll have to repay them more quickly. Financial aid officials fear that combination may keep some students out of college altogether.

COPYRIGHT 1995 Common Cause Magazine

COPYRIGHT 2004 Gale Group