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Report: Make Higher Education Affordable
Lending A Hand
The student loan industry, a $40 billion dollar-a-year market, is dominated by federally subsidized lenders. These lenders receive millions each year in subsidies from the federal government in addition to income from loan interest payments. This report documents the political spending of the five largest holders of federally subsidized student loans, namely Sallie Mae, the Student Loan Corporation of Citibank (a subsidiary of Citigroup), First Union National Bank, Wells Fargo Education Financial Services, and the National Education Loan Network (Nelnet).
The student loan industry has experienced rapid growth in recent years, as increasingly higher numbers of students borrow to finance their college education. At four year public colleges, annual borrowing rose 65 percent from 1992-1993 to 1999-2000.
As the student loan market has expanded, the student loan industry as a whole has increased its involvement in the political process by increasing political contributions and lobbying expenditures.
Some key findings in this report include:
• Political spending by the top five student loan corporations, including lobbying expenditures, totaled almost $60 million over the last three election cycles.
• Employees of the top five student lenders contributed more than $1.1 million to the political process during the last three election cycles in direct hard money contributions to candidates, donations to candidate and issue Political Action Committees (PACs), and contributions to political parties.
• The top five lenders’ PACs contributed more than $3.7 million to federal candidates over the last three election cycles.
• Soft money contributions from the five largest student lenders totaled almost $5 million for the last three election cycles. Sallie Mae’s soft money contributions for the 2002 cycle so far total almost $300,000, more than tripling its total soft money spending in the 2000 cycle.
• Lobbying expenditures accounted for more than 80 percent of the lenders’ political budget, with the top five lenders spending $49.4 million on lobbying over the last three election cycles. Sallie Mae and Citigroup (parent company of Citibank) spent more than $42.9 million in lobbying expenditures during this period, accounting for almost 90 percent of the top five lenders’ lobbying expenditures.
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