SPRINGFIELD — Less than 24 hours after Senator Eric P. Lesser sent a letter, co-signed by 48 House and Senate colleagues, to the Massachusetts Educational Financing Authority (MEFA) requesting an explanation for their membership in a national student loan lobbying group, MEFA announced that it will leave the organization.
The organization — the National Council of Higher Education Resources (NCHER) — is a trade association for companies that collect student loans, known as servicers. It has been lobbying a receptive federal Department of Education to preempt state laws regulating the student loan servicers. Secretary Betsy DeVos issued an interpretation arguing that it could preempt state laws.
Following MEFA’s announcement, Sen. Lesser issued the following statement:
“I am grateful that MEFA recognized that aligning itself with the Trump Administration and Betsy DeVos’ Education Department is not in the best interests of Massachusetts student loan borrowers. No quasi-public arm of state government should be involved in lobbying to undo state government actions. MEFA made the right decision by leaving NCHER, and I hope it leads to other states’ loan financing agencies — from Maine to Michigan to New Jersey to Pennsylvania — leaving this lobby group as well.
“The servicers should change their behavior even if the federal government doesn’t. What we are seeing is almost exactly the same playbook used by big banks in the run-up to the mortgage crisis that caused the Great Recession. States like Massachusetts passed laws to protect homeowners and crack down on subprime mortgage lenders, but the big banks went around state regulators and lobbied the federal Department of Treasury to preempt state laws. Large national student loan servicers like Navient, which are represented by groups like NCHER, are now doing the same thing by lobbying the Department of Education to preempt state laws protecting student loan borrowers. We’ve seen this movie before and we know what comes next.
“Our students deserve to be protected from loan servicers that are taking advantage of them. And it is not only our right, but our obligation, in the State Legislature to pass consumer protections that defend the residents of Massachusetts from questionable companies and suspect practices.”