Senator Lesser and Colleagues Send Letter to State Loan Financing Authority Requesting Explanation of Possible State-Funded Lobbying for Student Loan Companies

“We need an explanation now,” said Senator Lesser

BOSTON — Senator Eric P. Lesser, along with four dozen colleagues, sent a letter to the Massachusetts Educational Financing Authority on Wednesday requesting an explanation of funds it has spent that likely helped fund lobbying efforts on behalf of national student loan companies.

According to a report by the American Federation of Teachers, the Massachusetts Educational Financing Authority — an organization created by the state legislature in 1982 to help state residents afford college — paid $88,646 in membership dues between 2010 and 2017 to the National Council of Higher Education Resources.

This organization, a trade association for companies that collect student loans, has been lobbying the federal Department of Education to preempt state laws regulating the student loan servicers. A draft memo recently circulated at the Department of Education shows the lobbying may have been successful.

Education Secretary Betsy DeVos issued an interpretation, published in the Federal Register, declaring that federal law prohibits state governments from regulating companies that collect student debt on the Education Department’s behalf.

“The Trump Administration, led by Education Secretary Betsy DeVos, has repeatedly rolled back protections for student borrowers, siding with for-profit student loan servicers instead of students. We now have troubling evidence that a quasi-public entity in Massachusetts may be aiding these efforts and lobbying against our own state’s right to protect our residents. We need an explanation now,” said Senator Eric P. Lesser.

“We write to you to register our concerns regarding the enclosed report by the American Federation of Teachers asserting that the Massachusetts Educational Financing Authority (MEFA) is involved in national lobbying efforts to benefit student loan servicers over the student borrowers whom MEFA is charged with protecting,” the legislators’ letter, signed by both Democrats and Republicans, reads in part.

“It is troubling to us that MEFA, a quasi-public entity which was created by the General Court in 1982 to ‘help Massachusetts students and families access and afford higher education and reach financial goals through education programs, tax-advantaged savings plans, low-cost loans, and expert guidance’ (as stated on its website), may now be helping to fund a national interest group that is lobbying against this same General Court’s efforts to pass meaningful protections for student loan borrowers,” reads another excerpt.

In total, 49 Senators and Representatives signed onto the letter, including Western Mass Senators Anne Gobi, Adam Hinds, Don Humason, Stanley Rosenberg and James Welch, and Representatives Brian Ashe, Carlos Gonzalez, Angelo Puppolo and Jose Tosado.

Read the full letter here.

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Press ReleaseEric Lesser