Ebene News – US – Meet the man now at the center of the student debt debate

Richard Cordray, the head of consumer financial protection under President Barack Obama, will now head the federal student aid office in the Department of Education

Richard Cordray, a close ally of Senator Elizabeth Warren who was the first director of the Federal Bureau of Consumer Financial Protection during the Obama years, has been chosen as the new head of federal student aid in the Biden administration, a post that will put him at the center of the swirling debate over student debt cancellation

The problem is delicate for President Biden Although he approved the cancellation of up to $ 10,000 per borrower through legislation, Mr. Some Democrats have pressured Biden to forgive a lot more and sign an executive order if Congress doesn’t act

But with his new post in the Department of Education, the leading lender for higher education, Mr. Cordray may be able to relieve the president of this burden by canceling student debt administratively Democratic leaders seek up to $ 50,000 in debt relief per borrower

Mr Cordray, whose appointment was announced Monday, is a former Ohio attorney general who has made a name for himself for his aggressive investigation into mortgage foreclosure practices He headed the Bureau of Consumer Financial Protection, which Ms. Warren played a leading role in creating, from 2012 to 2017, leaving the first year of the Trump administration to make a failed bid for the governorship of Ohio

Administration officials have said he and Ms Warren have a close relationship, raising questions about how aligned their views are on the issue of student debt cancellation Ms Warren has made argue that it was an overwhelming burden on young people and that alleviating it would reduce economic inequalities Some critics say that a large percentage of this debt is held by people who have spent money to get an elite education and higher degrees that pay off very well

Forgiving millions of $ 50,000 in student debt “is just a gift for those who are not those who have suffered most from the pandemic, who are not those who need it most in society and the economy, and we should seek better targeted solutions, ”said Sandy Baum, senior fellow at the Urban Institute

Ms. Baum nevertheless welcomed Mr. Meet Cordray, saying she expected him to tackle the problem by changing the way the system treats people and preventing them from being exploited

In a statement, M Cordray focused on student debt as a top concern, saying he looked forward to working with department leaders, the Biden administration and Congress to “ create more avenues for students to graduate and progress, without being weighed down by an insurmountable debt”

However, he did not state his position on whether certain debts should be canceled, however Education Ministry spokeswoman Rachel Thomas said the agency was working with the Ministry of Education. Justice and the White House to examine options on the issue

Republican critics tried to block M Cordray’s appointment to the Consumer Financial Protection Bureau under M Obama, and complained that the office had too much power and imposed unnecessary regulations on businesses But his new appointment as chief operating officer of federal student aid, made by the Secretary of Education Miguel Cardona, is effective Tuesday and does not need any further approval

Mr. Cardona said in a statement announcing the appointment that it was “essential” for student loan borrowers to be able to rely on the ministry “for assistance with paying for college education, loan repayments and rigorous oversight post-secondary institutions”

Mr. Cordray, five times “Jeopardy!” champion, has also been a vocal critic of for-profit colleges. “I hate the way these hollowed out companies and mediocre colleges deceive consumers, employees and entire communities,” he wrote in an opinion piece. in The Plain Dealer, Ohio’s largest newspaper

Mr Cordray succeeds Mark A Brown, who was appointed by President Donald J Trump in March 2019 and resigned in March of this year Mr Brown has become a target of consumer and labor groups, who have applauded his resignation Mrs Warren greeted M Brown’s resignation with a tweet that said it was “good for student borrowers”

Consumer advocates were delighted with M Cordray Rendezvous “It’s an exceptional choice,” said Seth Frotman, former student loans ombudsman at the Consumer Financial Protection Bureau who worked closely with Mr. Cordray

“This is a very promising sign of a radical change in mentality in the Department of Education,” said M Frotman, who is now the executive director of the Student Borrower Protection Center, an advocacy group

Mr. Cordray made monitoring student loans a top priority for the office, and in early 2017 – two days before Mr. Trump took office – the agency sued Navient, one of the Department of Education’s largest student loan managers, for errors and omissions Mr. Cordray said he wrongly added billions of dollars to borrower tabs

The trial is ongoing and six attorneys general have filed similar complaints Navient spokesman Paul Hartwick called the allegations “unfounded” and said the company was helping students by helping them navigate the complex student loan program

Mr Cordray described the country’s skyrocketing student debt – which overshadows all consumer debt other than mortgages – and the often-mistaken way of managing it as a problem ripe for government intervention “The domino effects of the student debt burden and loan servicing problems are holding back the next generation and hampering the economy,” Mr. Cordray wrote in his 2020 book, “Watchdog”

The Department of Education is the main lender for Americans who borrow to pay for their graduate studies It holds loans directly to nearly 43 million people, for a total of $ 1.4 trillion

In one of the government’s most sweeping relief measures against the coronavirus pandemic, the ministry decided in March 2020 to allow borrowers to stop making payments on their federal student loans, temporarily fixing zero percent interest rate This break should continue until September

As a result of this freeze, less than 1% of borrowers with federal loans are currently making payments on them Restarting loan collections will be one of the biggest challenges facing the Department of Education this year

But M Cordray will inherit a plethora of other problems, including many mistakes and obstacles in the ministry’s public service loan forgiveness program, which seeks to forgive the debts of teachers, the military, nonprofit workers and other people in the public service

The ministry is also grappling with claims from hundreds of thousands of borrowers seeking redress under a program to eliminate the debts of people who have been defrauded by schools that have violated laws on consumer protection

Richard Cordray, Student, Student Loan, Student Financial Aid, Joe Biden, Consumer Financial Protection Bureau, United States Department of Education

Ebene News – United States – Meet the Man Now at the Center for Student Debt Debate

Source: https://www.nytimes.com/2021/05/03/us/richard-cordray-federal-student-aid.html