With over 1M Virginia borrowers, student loan debt is defining differences between candidates
Virginia—As Virginia students head back to campus, stark differences are emerging on the campaign trail when it comes to tackling the student debt crisis. With over 1 million Virginians owing over $30 billion in debt, the candidates’ records are poised to swing crucial voters this November.
This morning, Lt. Governor and candidate for Governor Ralph Northam released an extensive higher education plan, including a Borrower’s Bill of Rights and Student Loan Ombudsman to provide further support and protections for Virginia borrowers. Northam’s plan is based on 2017 legislation carried by Senator Janet Howell that passed the State Senate with an overwhelming bipartisan majority, 36-4.
Polling conducted by Progress Virginia Education Fund in 2016 found an overwhelming 76% of Virginians support establishing and Borrower’s Bill of Rights, including a whopping 74% of Republicans. Majorities of Virginians want state lawmakers to take steps to tackle the student debt crisis.
“Student loan borrowers just want a fair shot. But all too often, predatory companies take advantage of borrowers who have few recourses, just to make a buck off people striving to achieve the American Dream.” Progress Virginia executive director Anna Scholl continued, “Progress Virginia has been leading the campaign for the commonwealth to tackle this growing student debt crisis. Recent actions by the Trump administration and Education Secretary Betsy DeVos to undermine borrower protections and push radical cuts to loan repayment and college affordability programs make state action all the more important. We’re thrilled to see Dr. Northam back a Borrower’s Bill of Rights that will put borrowers back in the driver’s seat when it comes to repaying their college loans.”
In contrast to Northam, GOP candidate for Governor Ed Gillespie not only has failed to release a student debt or higher education plan, but his professional record on student debt is abysmal. Gillespie’s multi-million dollar lobbying business raked in profits from student loan servicers who were actively opposing federal legislation to make college more affordable. One Gillespie client, NelNet. Inc., claimed over $270 million in improper student loan subsidies to boost their bottom line.
Gillespie isn’t alone on the GOP ticket in throwing student loan borrowers under the bus to make a buck. While Attorney General Mark Herring has been standing up for borrowers fleeced by shady, for-profit colleges, challenger John Adams was profiting off on student loan scams. In his white-collar legal practice, Adams represented Collegiate Funding Services after they were accused by former employees of violating the False Claims Act while telemarketing to convince borrowers to purchase loan consolidation services.
“For Virginia’s million student loan borrowers, the differences between these candidates is quite clear,” added Scholl. “Borrowers are a powerful voting block and will be paying close attention to determine which candidates on the ballot this November will tackle the student debt crisis and who will just make it worse.”
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Background:
Ed Gillespie:
Quinn, Gillespie, & Associates (QGA) Earned $520,000 Lobbying for College Loan Corp on “Student Loan Reform.” Between 2005 and 2007, QGA earned $520,000 in lobbying fees for lobbying on “student loan reform” for College Loan Corp. Gillespie was listed as a lobbyist on the account. [Senate Lobbying Report, College Loan Corp, 2005-2007]
QGA Earned $40,000 Lobbying for Nelnet on “Higher Education Reauthorization.” In 2007, QGA earned $40,000 in lobbying fees for lobbying on “higher education reauthorization” for Nelnet. Gillespie was listed as a lobbyist on the account. [Senate Lobbying Report, Nelnet, 2007]
QGA Earned $180,000 from Bank of America Lobbying on “Student Loans/Budget” and Other Issues. In 2007, QGA earned $180,000 in lobbying fees for lobbying on “General representation on financial services issues, pensions, PSI, Student loans/budget” for Bank of America. Gillespie was listed as a lobbyist on the account. [Senate Lobbying Report, Bank of America, 2007]
QGA Was Hired By Bank Of America & Nelnet To Oppose Efforts To Reform The Student Loan Industry. “Over in the Senate, Sen. Edward M. Kennedy (D-Mass.), chairman of the Health, Education, Labor and Pensions Committee, held a hearing on college affordability in February. He also introduced two bills that encourage borrowers to use the government’s loan programs before taking out private loans. Loan providers are not taking the threat lightly. Although they are very tight-lipped about their lobbying tactics, they’ve got deep pockets and plenty of connections to make their case. In 2006, SLM Corp., Sallie Mae’s parent company, paid $1.62 million in lobbying expenses, about 8 percent of the $19,822,687 total paid by the finance and credit industry, according to the Center for Responsive Politics. Nelnet has a gold-star lobbying team of Quinn Gillespie & Associates, Akin Gump Strauss Hauer & Feld, VPR Associates and Clark & Associates. Quinn also represents fellow America’s Student Loan Providers member Bank of America.” [Politico, 3/20/07]
Audit Found That Nelnet Improperly Claimed $278 Million In Student Loan Subsidies.According to Politico, “If recent history is an indicator, the lenders are facing an uphill fight. At the close of the 109th Congress, federal subsidies for loans were cut $20 billion as part of the Deficit Reduction Act. Then this year, President Bush proposed cutting an additional $17.3 billion in subsidies. TheQuy are also grappling with fallout from scandal. One firm, Nelnet, is being scrutinized for some $278 million in subsidies that an audit claimed improper.” [Politico, 3/20/07]
John Adams:
Collegiate Funding Services (CFS) is “a telemarketing firm that helps consolidate federal student loans.” (Sarasota Herald-Tribune, 07/22/06)
CFS was the subject of a whistleblower suit alleging violations of the False Claims Act in their telemarketing. “Lenora Jones and Patricia J. Willoughby…are former” CFS employees. They “worked as telemarketing solicitors for CFS, making and receiving calls from existing and potential student loan borrowers about consolidation loan products,” and they alleged in a whistleblower lawsuit “that CFS violated various provisions” of the False Claims Act “in the course of its routine business practices.” At the time of this lawsuit CFS was owned by JPMorgan Chase & Co. (United States v. Collegiate Funding Servs., 469 Fed. Appx. 244)
John Adams of McGuireWoods represented CFS in the whistleblower lawsuit filed by Lenora Jones and Patricia J. Willoughby. (United States v. Collegiate Funding Servs., 469 Fed. Appx. 244)