What is it like being a British student in America?

Why do Sallie Mae and other private student lenders contribute so much money to think tanks like the New America Foundation which lobby to scale back federal student loans? Why has the money been contributed covertly through fronts like the Lumina Foundation?

• See details in this article: http://www.buzzfeed.com/mollyhensleyclancy/how-a-private-foundation-with-deep-ties-to-the-student-loan#27uova8 Sallie Mae set up the Lumina Foundation with nearly $1 billion in Sallie Mae money and installed former Sallie Mae senior executives in senior positions. Since then, the Lumina foundation has funded studies that advocate scaling back federal student loans--policies that would benefit Sallie Mae Financially.

• Answer:

  Not sure about the think tanks or foundations specifically named, but student loan companies have a vested interest in public policy regarding student loans. Because the loans are federally insured; how they are serviced, how profitable they can be and how much liability a lender takes on are all prescribed by federal law. Of course, lenders would not want more student loan money to be made available to individual borrowers because it would reduce the demand for their private loan products, often times required to cover the difference between federal loan maximums and a student's education expenses (the total amount of federally insured loans that can be borrowed hasn't changed since the 70s). Basically, anything that would help reduce the cost of education for students eats into lender profits. Consequently, I would expect lenders to be actively lobbying against any legislation to lower tuition, increase subsidized loan amounts, increase the Pell Grant awards, make scholarships available and so on could all be included.