- Former CFPB chief Richard Cordray will head the federal Student Aid Office, which oversees student loans.
- Elizabeth Warren helped create the CFPB and was instrumental in nominating Cordray when she could not helm the agency.
- Warren wants to cancel $ 50,000 in student loans per capita and Cordray has shared his agenda for his political career.
- See more stories on Insider’s business page.
Since she was elected to the Senate nearly a decade ago, Elizabeth Warren has been fighting to cancel student loans and hold loan officers accountable. Now his closest associate is in charge of the federal student loan pile, and that could be a big deal.
Richard Cordray, former head of the Consumer Financial Protection Bureau (CFPB), was elected as head of the federal Department of Education’s Office of Student Assistance (FSA) on Monday. Some in Washington DC are better positioned to meet Warren’s vision of large-scale student-debt relief. That’s because the Democrats wanted Cordray to have Warren.
When Warren was a Harvard professor (and occasional blogger), he often cited the need to create something like the student-loan system and the CFPB, which protected consumers financially and ensured that they were treated fairly He is going. She turned to a new federal agency created under President Barack Obama, which wanted Warren to lead it, but in 2011 Senate Republicans blocked her appointment. Instead she ran for the Senate, becoming a national figure, while Cordray became a close ally as the first head of the CFPB.
During his time in the Senate, Warren worked with Cordray’s bureau to investigate hunter lending practices. Now as head of the FSA, Cordray will be tasked with overseeing the government’s $ 1.5 trillion student loan portfolio through loans and grants, as well as supervising student-loan officers and implementing relief and repayment programs.
“@ Ricordre Was a berserk @ CFPB Leaders who forced large financial institutions to refund $ 12 billion, betrayed them, “Warren wrote On twitter on monday. “I am very pleased that he is protecting student borrowers and will bring much-needed accountability to the federal student loan program.”
What could Cordray do on student loans
After announcing his appointment, in a statement, Cordray said he was “eager to create more avenues for students to graduate and move forward, not the burden of insurable debt.”
Once a moratorium on the payment of a student loan through September, the debt recovery filed for debt relief will work to resolve the claims of thousands of borrower borrowers, as well as lend them. “Not out of the question.”
Although Cordray has not yet commented on wiping out $ 50,000 in student loans for each borrower who continues to call for Democrats, he told MarketWatch last year that under the Biden administration, he took over the CFPB and the Department of Education Was expected to work more closely on the student. Debt issues.
During the Obama years at the CFPB, Cordray made monitoring student loan officers his priority. The agency has returned more than $ 75 million to student loan borrowers since 2011 over debt recovery complaints, and in early 2017, the bureau sued the largest student lender in the US, in a lawsuit that is still ongoing Is, arguing over it. They cannot make payments if they mislead students into taking loans.
In more than a decade of hearings, Warren called on the government to fire Naviate, accusing him of misusing the student loan system for more than a decade, and to fire Naviate its chief executive.
In 2019, Cordray wrote a guest essay in The Plain Dealer, Ohio newspaper, speaking out against for-profit colleges. “I hate how these hollowed-out businesses and subpar colleges are cheating consumers, employees and entire communities,” Cordray wrote.
Education Secretary Miguel Cardona has already canceled some loans for borrowers fraudulently taken by for-profit schools, and Warren has investigated several Corinthian colleges and ITT technical institutes for profit.
The FSA head’s seat has been vacant since March, when Mark Browne, the former head of office appointed by Education Secretary Betsy DeVos in 2019, resigned amid pressure from labor groups and lawmakers. Warren wrote in a tweet that his resignation was “good for student borrowers.”
Cordray told Marketwatch in November that, as CFPB chief, his approach with the Department of Education was one of “close cooperation”, but “when Betsy DeVos came into office, all was Knicks.” Speaking of the approach to a Biden administration, he said that he thought that the CFPB and the Department of Education would possibly work together.