Elizabeth Warren Faces Right-Wing Stooge: Here’s Who’s Quietly Funding Her Top Critic
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However, it’s always worth following the money. And Chingos gives you that road map at his own website, where he lists eight research grants he has received, totaling $1.34 million in all, from several conservative organizations. This includes $500,000 from the Lumina Foundation, which has close ties to Sallie Mae, the corporation that stands to lose the most from Sen. Warren’s refinancing bill.
These don’t automatically disqualify Chingos from having views on higher education, but they should inform the debate. Media outlets that freely quote Chingos should disclose his ties to right-wing foundations instead of allowing him to escape with the façade of an objective profile at the Brookings Institution.
Chingos and his colleague Beth Akers began their attacks on Warren last year, when they fulminated against her proposal to temporarily reduce student loan rates to 0.75 percent, the same rate big banks get from the government. The parallel to bank lending was simply meant as a comparison to show what we prioritize in America, but Chingos, like other critics, took it literally, saying that Warren’s “embarrassingly bad proposal … confuses market interest rates on long-term loans with the Federal Reserve’s discount window.” He added that Warren “does not reflect the administrative costs and default risk that increase the costs of the federal student loan program,” which is more a budgetary issue than a higher education one. Chingos and Akers’ disparagement got picked up by the Boston Globe,National Review, t he New Republic and New York magazine, always cited to “researchers at the Brookings Institution.”
With this year’s proposal on refinancing prior student loans, Chingos and Akers were at it again. In March, they argued that the plan turns student loans into an entitlement, allowing for refinancing at “below-market rates.” That’s an odd way of putting it, because the refinancing would actually peg to the agreed-upon 3.86 percent interest rate for this year. And once again, the focus is on cost, hinting at a long-standing debate over how much the government makes off student loans.
The Congressional Budget Office projects hundreds of billions in profits to the government, but conservatives object to this, favoring a “fair value accounting” method that they claim includes the risk attached to the loans. But the Center for American Progress and former CBO director Robert Reischauer disagree, saying that fair value accounting adds phantom costs that never materialize, and that the government actually prices risk quite well (especially when you consider that borrowers can basically not escape student loan debt).