The Massachusetts Educational Financing Authority will end its membership in a national trade association that has been lobbying for Trump administration regulations that would eliminate Massachusetts’ authority to regulate student loan servicers.
MEFA’s decision came after The Republican reported that 50 state legislators were calling on the quasi-public agency to speak out against the National Council of Higher Education Resources.
“MEFA appreciates the concern expressed by the legislators, and upon review of the letter, will end its membership in the National Council of Higher Education Resources,” MEFA spokeswoman Lisa Rooney said in a statement.
The issue surrounded an interpretation of federal law by Education Secretary Betsy DeVos, who declared that states cannot regulate student loan servicers. The memo from DeVos threatens efforts by Massachusetts lawmakers and Attorney General Maura Healey to regulate the industry.
The National Council of Higher Education Resources wrote a public letter urging the Department of Education to say that states cannot regulate the industry.
MEFA was created by the state to offer student loans and help student borrowers. It does not receive state tax dollars. MEFA pays dues as a member of the National Council of Higher Education Resources, which represents student loan servicers.
Sen. Eric Lesser, D-Longmeadow, who is leading the effort in Massachusetts to regulate student loan servicers, wrote a letter signed by 50 state lawmakers Monday that called it “troubling” that an organization formed by the Legislature to help students afford higher education “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.”
Rooney said MEFA paid $12,800 to NCHER for membership dues this past year. The trade organization provided MEFA with industry conferences, professional development opportunities and sharing of best practices.
Approximately 7 percent of NCHER’s budget – or approximately $896 of MEFA’s dues – is spent on advocacy work. Rooney said the sliver of funding that goes to advocacy on the student loan issue is “de minimus.”
“Please understand that this important matter does not impact MEFA loan programs,” Rooney said. “The issue regarding federal loan servicing by the U.S. Department of Education has no impact on MEFA or the borrowers of MEFA private loans.”
Rooney said MEFA will end its membership in the national organization and continue to focus on its mission of helping Massachusetts families and students affordably finance college education.
She reiterated as she had in a previous statement that MEFA “acknowledges and appreciates the leadership” of Healey and the Legislature in advocating for student loan borrowers and their families.
Lesser said he is grateful that MEFA decided to end its membership in the organization. “A quasi-governmental agency should not be working to undo efforts by its own state government to protect consumers,” Lesser said. “I’m grateful MEFA saw that and grateful they’ve taken this step to protect consumers and student loan borrowers.”
Lesser said he hopes education financing authorities in other states will follow suit.