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Pushing Back

Published:  June 27, 2007
Issues:  

The student loan industry is getting desperate. With Congress poised to significantly reduce the subsidies that private lenders receive for issuing government-backed loans, industry officials are making a last ditch attempt to persuade lawmakers that all of the corruption that has been uncovered over the last six months is limited to a few bad apples and is not a systemic problemdespite all of the evidence to the contrary.

Exhibit A in this effort is a new survey released last week by the Consumer Bankers Association (CBA). The document purports to show that a majority of financial aid administrors do not believe student-loan providers, as a group, are unethical. Gwyn Walcoff, a CBA spokeswoman, touted the survey results in The Chronicle of Higher Education, saying they represent "a vote of confidence for lenders."

"A major industry is taking a hit for what essentially amounts to nothing more than allegations at this point," she said.

But a closer look at the survey of 528 aid administrators reveals that it is deeply flawed. The survey is essentially what masters of the dark arts of politics call a "push poll" designed to elicit and shape responses the poll's sponsor is seeking.

First, take a look at who is being surveyed. CBA has chosen to seek the opinions of student aid officials, a group that has had members who have been implicated in these scandals. The corruption that has been revealed in recent months has largely revolved around the arrangements that lenders have made with financial aid offices. Some college aid directors have even lost their jobs as a result of the investigations. So is it surprising that members of this profession feel that they have been unfairly persecuted victims of a witch hunt (as respondent 282 complains)?

Don't forget that the aid officers' lobbying group, the National Association of Student Financial Aid Administrators (NASFAA), knew about potential ethical violations for years and chose not to act. The association's president, Dallas Martin, even went so far as to demand a public apology for unwarranted character assassination from New York Attorney General Andrew Cuomo, before publicly rescinding his statement.

Not to mention that the setup of the poll all but guaranteed that only those with the most passionate feelings on the matter would participate. Instead of conducting random phone calls, a process that would have allowed for some statistical measurement, the public relations firm that conducted the survey sent e-mail invitations out to over 2,600 administrators. This approach meant that only individuals who actively wanted to make their opinions known would take the time to answer the questions, thus skewing the results.

Now let's look at the questions. It doesn't take a background in polling to see that CBA's questions "push" respondents to select certain answers. Nearly half of the questions require "yes/no/dont know" answers to very broad statements that encompass numerous issues.

For example, one question asks If Congress were to ban preferred lender lists, do you believe it's likely student and parent borrowers would get lower cost student loans supported with higher-quality servicing and customer service? By linking loan costs, servicing and customer service three facets of borrowing that are not necessarily (and in fact, quite often not) connected the question makes it far easier for the respondent to answer no. Not surprisingly, that was the answer selected by 91 percent of CBA's respondents.

Other questions were even trickier presenting what appeared to be an open-ended question, but offering only limited responses. The survey, for instance, asks respondents to identify "the best means of assuring that all student and parent borrowers are aware of their right to choose a federal or non-federal lender for student loans." The question has only three potential answers:

  • Increase required notifications to borrowers reminding them of the right.
  • Prohibit schools from having preferred lender lists for either FFEL loans or non-federal loans.
  • Other (with no option of elaborating further)

This is like asking what the best type of citrus fruit is when your only options are apples or oranges. Again, the only sensible answer (increased notifications) received a majority of the vote.

The survey gives respondents the following four options when deciding how to finance an increase in the maximum Pell Grant:

  • Eliminate SEOG, the Perkins Loan Program, and cut FFEL to find the money.
  • Appropriate the necessary funds and call it an investment in America's youth.
  • Should not increase the maximum Pell Grant
  • Don't know.

How would you expect financial aid administrators to respond?

Even some people who took the survey noted its flaws. Four administrators e-mailed the research team with what CBA's public relations firm referred to as hostile comments, such as The questions are loaded and the options are limited. Other respondents used an open-ended question at the end of the poll to comment: This survey was designed in such a way that you will get the answers you were looking to receive. Exactly.

So this survey is not really "a vote of confidence for lenders." It's just another effort by the Consumer Bankers Association to derail reform in an effort to protect their profits.

The banks that CBA represents obviously have a whole lot invested in what comes out of Congress, and its not surprising that their anti-reform lobbying blitz would produce a poll such as this one. They want you to think that financial aid administrators are against reform. But whos going to be fooled by the manipulated results of a flawed poll? What theyre really proving is that their own arguments are pretty weak.

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