Richard Cordray tapped for student loan office chief by Biden administration

The appointment puts Cordray, a progressive ally and former director of the Consumer Financial Protection Bureau, at the center of a heated debate over whether the federal government should cancel some student debt. The Biden government has been pressured by several Democratic lawmakers to cancel $ 50,000 per borrower on a student loan. Meanwhile, President Joe Biden has spoken out in favor of canceling $ 10,000 per borrower and has also indicated that he believes Congress should make changes through laws that would be harder to reverse.

Cordray has close ties to Massachusetts Democratic Senator Elizabeth Warren, who leads an attempt to wipe $ 50,000 in student debt. Warren led the creation of the Consumer Financial Protection Bureau during the Obama administration, and Cordray was named the agency’s first director.

“I am very pleased that he will use his fearlessness and expertise to protect student loan borrowers and bring much-needed accountability to the state student loan program,” Warren said in a statement Monday.

She had called for the resignation of Mark Brown, the former chief operating officer of Bundesstudienhilfe. He resigned at the beginning of the year.

Cordray has been vocal about his belief that student debt is having a negative impact on the overall economy.

“The weight and fear of student loans not only takes a tremendous emotional toll, it also holds young people back, making them less willing to take risks, such as changing jobs, moving, or starting a business instead of ‘one to earn a steady paycheck, “he wrote in his book” Watchdog “.

During Cordray’s tenure with the Consumer Financial Protection Bureau, he made protecting student loan borrowers a priority. The agency secured more than $ 480 million in debt relief to borrowers who took out loans to attend Corinthian College, a now-defunct for-profit college. It also sued Navient, one of the largest federal student loan service providers, for allegedly improper payment processing. Navient has denied the allegations and the process is ongoing.

Cordray struggled with endless calls for his sacking after President Donald Trump took office in 2017. Cordray remained at the helm through November that year, stepping down several months before the end of his term. His departure was widely viewed as preparation for his 2018 Ohio gubernatorial run, which was ultimately unsuccessful.

North Carolina Republican MP Virginia Foxx, the senior member of the House Education and Labor Committee, said in a statement Monday that she “is skeptical that a failed Democratic politician who has consumed politics in the past instead of to take care of consumers ”. , has the ability and seriousness to perform the duties “of the position.”

In a statement announcing Cordray’s selection, Education Minister Miguel Cardona referred to Cordray’s “strong track record as a dedicated civil servant who can overcome great challenges and achieve results”.

“I am delighted that Richard Cordray will join the Department of Education as Chief Operating Officer for Federal Student Aid. It is critical that students and student loan borrowers can rely on the Department of Education for college payment help and loan repayment assistance, “and strong oversight of post-secondary facilities,” Cardona said.

Cordray faces a backlog of debt relief applications from borrowers who claim to have been scammed by their colleges. Former Education Secretary Betsy DeVos admitted more than 200,000 of these claims, known as debtor defense for repayment, pile up as she attempted to rewrite the policy. Processing stalled, leaving some people across the Trump administration to wait to see if they were eligible for debt relief. During her tenure, DeVos also changed the remission calculation, resulting in only partial debt relief for eligible borrowers based on their current income. The Biden government has already reversed this policy, providing 73,000 people with an additional $ 1 billion in aid.

There is currently a pause on all federal student loan payments, a Covid benefit introduced last year by Congress and extended through September by the Biden administration.

The administration also waived a formality requirement for borrowers with disabilities to obtain lending approval during the pandemic. However, borrower attorneys say that much more could be done to help these borrowers, such as getting their debts paid automatically.

source https://collegeeducationnewsllc.com/richard-cordray-tapped-for-student-loan-office-chief-by-biden-administration/