It's no wonder Americans are deeply suspicious of special interest lobbyists in Washington. Take the student loan industry's latest efforts to kill legislation pending in Congress that would end the Federal Family Education Loan program. It's a prime example of special interest lobbying at its worst.
In 2007, shortly after President Bush signed into law a bill cutting government subsidies to lenders and guaranty agencies, the student loan industry bought into a new strategy to thwart any future Congressional action that might reduce its subsidies further: manufactured grass roots opposition (otherwise known as astroturfing). With Democrats firmly in control of Congress and in a good position to take back the White House in the upcoming presidential election, industry officials knew that the FFEL program was in jeopardy.
Enter Qorvis Communications, a prominent Washington-based public relations firm that had gained notoriety earlier in the decade for its work on behalf of the Saudi Arabian government. Eager for the loan industry's business, one of the firm's partners made a pitch for the company at the 2007 legislative conference of the National Council of Higher Education Loan Programs, a trade group that represents guaranty agencies and non-profit lenders. In a power-point presentation entitled "What Just Hit Us?", this Qorvis executive said that the loan industry had lost the loan subsidy battle because it "had no organized constituency" to "counter" its critics.
"The messages and messengers we used to defend the program were not effective and thus we need new voices, new messages, and new ways to mobilize these voices," he stated.
The industry, he said, especially needed to wage a campaign to get students and their parents to speak out on its behalf. Lenders and guarantors could do this by reaching out to student organizations and parent groups, as well as spreading their message over the Internet through social networking sites like Facebook, blogs, and a website dedicated to the cause of preserving FFEL.
Qorvis, the executive said, was uniquely qualified to carry out this campaign because of its previous work building grassroots networks on college campuses dedicated to giving "students a voice in the national debate surrounding digital rights and freedoms in the 21st Century." He suggested that the firm would be able tap into these networks to mobilize students to speak out in favor of the FFEL program.
"There are now fifteen chapters on campuses nationwide where students meet to discuss current events in technology policy and take action to support or oppose relevant legislation -- and more importantly, to recruit more advocates for us [emphasis included in original text]."
Qorvis got the job on the strength of his pitch. Now two years later, with the FFEL program facing possible extinction, we can see how this strategy has worked out. The loan industry is still struggling to generate grassroots support from anyone other than those who have a vested interest in the program's survival -- particularly loan company employees and financial aid administrators who serve on lender and guaranty agency boards and/or belong to state associations that depend heavily on student loan providers for financial support.
Despite the efforts of the loan industry and the Qorvis communication team, students and their parents are not rushing the barricades to demand that lenders be allowed to continue collecting generous subsidies for making virtually risk-free loans. Evidently, digital rights supporters on campuses aren't interested in being used as pawns in the battle over the future of the FFEL program. Perhaps they're also wise to the fact that the pending legislation pits student grant aid increases against lender subsidies. Did lenders really think students would choose the latter?
As we've said before, the indifference of students to the lenders' plight shouldn't come as a surprise, considering that the terms and conditions of federal student loans are pretty much identical whether they come from the loan industry or from the U.S. Department of Education's Direct Lending program.
In our next post, we will take a closer look at the loan industry's increasingly desperate efforts to show that it has students on its side. Stay tuned.