Roosevelt Institute Higher Education Expert Identifies Outsized Power of Special Interests in America’s Staggering $1.5 Trillion Student Debt System
NEW YORK, NY – In its latest issue brief, Who Pays? How Industry Insiders Rig the Student Loan System—And How to Stop It, the Roosevelt Institute examines the excess power of special interests in U.S. policymaking as a factor in the country’s outrageous $1.5 trillion in student loan debt. The report, written by Roosevelt Institute Fellow Julie Margetta Morgan, focuses on how colleges, loan servicers, and other industry players have used their influence over federal policymakers and regulators to procure bailouts, handouts, and exemptions that often force students deeper in debt.
Policymakers’ receptivity to industry requests stands in stark contrast to the draconian rules and punishments that characterize the borrower experience. For example, Education Secretary Betsy DeVos recently went to bat to shield loan servicers from accountability under state law, while at the same time fighting borrowers in court to require payment from students who have been defrauded by their school.
By exploring such examples as the Department of Education’s treatment of massive student loan servicer Navient (formerly known as Sallie Mae) and for-profit university chain Corinthian Colleges, the report shows how powerful industry lobbyists have rigged the student loan system—all under the false pretense of doing what is best for students and taxpayers.
“America didn’t end up with more than a trillion dollars in student loan debt by accident,” said Morgan, Fellow at the Roosevelt Institute and the report’s author. “We need to look at all of the factors driving student debt today, and that includes the influence of those who profit when students borrow. This report helps to explain why it is so hard for borrowers to get help from the government—those in the industry with money and power are pushing for their own interests and are clearly being heard.”
Last month, Morgan coauthored Unstacking the Deck: A New Agenda to Tame Corruption in Washington, which explored some of dynamics in this latest report and was covered at major outlets, including The Week, The Nation, and Huffington Post. Morgan is a nationally recognized expert on higher education policy and previously served as a senior policy advisor to Senator Elizabeth Warren (D-MA) on issues including college affordability and student loan servicing reform. Earlier this year, Roosevelt Institute Fellow and Research Director Marshall Steinbaum coauthored the Levy Institute report The Macroeconomic Effects of Student Debt Cancellation.
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Until the rules work for every American, they’re not working. The Roosevelt Institute asks: what does a better society look like? Armed with a bold vision for the future, we push the economic and social debate forward. We believe that those at the top hold too much power and wealth, and that our economy will be stronger when that changes. Ultimately, we want our work to move the country toward a new economic and political system: one built by many for the good of all.
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