Seth Frotman - Top US Student Loans Official Resigns Over 'Open Hostility' from White House

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According to the guardian, ‘Frotman is the latest high-level departure from the CFPB since Mick Mulvaney, Donald Trump’s budget director, took over in late November but Frotman’s departure is especially noteworthy, since his office is one of the few parts of the US government that was tasked with handling student loan issues. The office was at the center of the lawsuits against for-profit institutions like Corinthian Colleges and is currently heading up a lawsuit between the CFPB and Navient, one of the nation’s largest student lenders. The Navient lawsuit has been mired in bureaucratic red tape as the Department of Education, headed by Betsy DeVos, has been unwilling to help the CFPB with their lawsuit. Since its creation, the student loan office has returned $750m to harmed borrowers. “You have used the bureau to serve the wishes of the most powerful financial companies in America,” Frotman wrote, addressing his letter to Mulvaney. “The damage you have done to the bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country.”

The guardian further reported that ‘Congress created the student loan ombudsman office when it established the CFPB, citing a need for a go-to person to handle student loan complaints nationwide. One previous occupant of that position is Rohit Chopra, who is now a commissioner at the Federal Trade Commission. The ombudsman’s office is quite powerful, able to work with the bureau’s enforcement staff to target bad behavior in the student loan market as well as act as a voice inside the government on behalf of student loan borrowers. The office processed tens of thousands of complaints from student loan borrowers and was among the first major government offices to raise alarms about the growing issue of students being unable to afford their loan repayments.’


Source: The guardian

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