The appointment places Cordray, a progressive ally and former director of the Consumer Financial Protection Bureau, on the heart of a heated debate over whether or not the federal authorities ought to cancel some student debt.
The Biden administration has confronted stress from a number of Democratic lawmakers to cancel $50,000 per student loan borrower. President Joe Biden, in the meantime, has expressed assist for canceling $10,000 per borrower, and has additionally indicated that he believes Congress ought to make adjustments by laws, which might be more durable to undo.

Cordray has shut ties to Democratic Sen. Elizabeth Warren of Massachusetts, who’s main the push to cancel $50,000 in student debt. Warren spearheaded the creation of the Consumer Financial Protection Bureau through the Obama administration and Cordray was tapped because the company’s first director.

“I’m very glad he will get to apply his fearlessness and expertise to protecting student loan borrowers and bringing much needed accountability to the federal student loan program,” Warren mentioned in an announcement Monday.

She had referred to as for the resignation of Trump administration holdover Mark Brown, the previous chief working officer of federal student assist. He stepped down earlier this 12 months.

Cordray has been vocal about how he believes student debt is having a adverse impact on the broader financial system.

“The weight and the anxiety of student loans not only take a huge emotional toll but also hold young people back, making them less willing to take risks, such as switching jobs or professions, moving to a new place, or starting a business rather than earning a steady paycheck,” he wrote in his e book, “Watchdog.”

During Cordray’s tenure on the Consumer Financial Protection Bureau, he made it a precedence to guard student loan debtors. The company secured greater than $480 million in debt forgiveness for debtors who had taken out loans to go to Corinthian College, a now-defunct for-profit faculty. It additionally sued Navient, one of many largest federal student loan servicers, for allegedly processing funds incorrectly. Navient has denied the allegations and the lawsuit is ongoing.

Cordray battled infinite calls for his firing after President Donald Trump took office in 2017. Cordray remained on the helm till November of that 12 months, stepping down a number of months earlier than his time period was set to finish. His departure was extensively regarded as in preparation for his 2018 Ohio gubernatorial run, which was finally unsuccessful.

Republican Rep. Virginia Foxx of North Carolina, the rating member of the House Education and Labor Committee, mentioned in an announcement Monday that she is “skeptical that a failed Democrat politician, who has a history of getting consumed by politics instead of caring for consumers, has the capability and serious character required to carry out the duties” of the place.

In an announcement asserting Cordray’s choice, Education Secretary Miguel Cardona pointed to Cordray’s “strong track record as a dedicated public servant who can tackle big challenges and get results.”

“I am thrilled that Richard Cordray will be joining the Department of Education as the Chief Operating Officer of Federal Student Aid. It is critical that students and student loan borrowers can depend on the Department of Education for help paying for college, support in repaying loans, and strong oversight of postsecondary institutions,” Cardona mentioned.

Cordray will face a backlog of debt forgiveness applications from debtors who declare that they had been defrauded by their schools. Former Education Secretary Betsy DeVos allowed greater than 200,000 of those claims, referred to as borrower protection to compensation, to pile up as she sought to rewrite the coverage. Processing stalled, leaving some folks ready all through your entire Trump administration to listen to whether or not they’re eligible for debt aid.
During her tenure, DeVos additionally modified the forgiveness calculation, leading to solely partial debt aid for eligible debtors relying on their present incomes. The Biden administration has already reversed that coverage, delivering an additional $1 billion in relief to 73,000 people.

There is at present a pause on all federal student loan funds, a Covid aid profit put in place by Congress final 12 months and prolonged by the Biden administration although September.

The administration has additionally waived a paperwork requirement through the pandemic for debtors with disabilities to obtain approval for loan forgiveness. But borrower advocates say way more may very well be finished to assist these debtors, like mechanically discharging their debt.



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