By Eliminating CFPB Student Loan Ombudsman, the President is Making Clear His Crusade to “Delete” the CFPB is a Gift to Corporations and a Betrayal of Working Families
February 14, 2025 | WASHINGTON, D.C. — Last night, Acting Consumer Financial Protection Bureau (CFPB) Director Russell Vought fired CFPB Student Loan Ombudsman Julia Barnard as part of a concerted and unlawful attempt to dismantle the agency. Project 2025 architect Vought, President Trump, and unelected billionaire Elon Musk ousted Barnard as part of a purge of career federal consumer protection officials. Musk has financial and professional ties to companies subject to CFPB’s oversight, including student lenders, for-profit colleges, and his own Twitter/X.com, which is preparing to enter the payments market.
Under Trump and Vought’s leadership, the agency has been systematically gutted, with mass firings, halted investigations, and a refusal to comply with nearly 90 congressional mandates designed to protect consumers.
In response, Julia Barnard, former CFPB Student Loan Ombudsman, released the following statement:
“I am honored to have served as Student Loan Ombudsman and to have worked with so many dedicated colleagues and the incredible borrowers who reached out for help into what might sometimes feel like a void. And I am so grateful to Pastor Steege for fighting for all consumers and sharing her story in the lawsuit challenging the gutting of the CFPB.
“Over the past few months alone, my team and I manually sifted through over 10,000 complaints, uncovering illegal conduct, identifying the most actionable cases for follow-up, and uncovering systemic and policy failures for Congress. Together, we secured the discharge of a private student loan for a borrower scammed by her school, helped a full-time caregiver and mother of a disabled son get the relief they were entitled to, and returned money to borrowers when they had unexpected or inflated amounts pulled from their accounts. We guided countless borrowers through the Kafka-esque maze of PSLF and ensured others received refunds for money they overpaid out of fear.
“This work matters. It’s a lifeline for borrowers and a safeguard against a system that too often fails them. Dismantling this function is unconscionable and will cost real people real money.
“To the borrowers still waiting for answers, please know you are not forgotten. I will not stop fighting for you. And to those I’ve worked alongside, I trust you will continue to push for fair, transparent, and just treatment for every borrower.”
In response, SBPC Executive Director and former CFPB Deputy Assistant Director, Office for Students and Young Consumers Mike Pierce released the following statement:
“By brashly and illegally firing the CFPB Student Loan Ombudsman, Trump, Vought, and Musk are stripping borrowers of their chief advocate within the federal government—a move that leaves millions without a lifeline in a broken system. This isn’t just an attack on the CFPB; it’s an assault on consumer rights and protections that everyday Americans rely on across this country. The CFPB Student Loan Ombudsman has been a critical watchdog and defender for students and borrowers, ensuring accountability in a system rigged against them. This is a blatant betrayal of working families and sends a clear message that Trump and his allies care about one thing and one thing only: corporate profit.”
The Student Borrower Protection Center (SBPC), co-founded by former CFPB Student Loan Ombudsman Seth Frotman during the first Trump Administration, condemns this attack on borrowers. The Ombudsman—a CFPB position required by law under Section 1035 of the Dodd-Frank Wall Street Reform and Consumer Protection Act—serves as an independent, impartial, and confidential lifeline for students and borrowers, resolving issues with loan servicers, protecting students and borrowers from scams, exposing systemic failures and abuses, and ensuring accountability in the student loan system.
Background
The Consumer Financial Protection Bureau (CFPB) is the nation’s top watchdog protecting Americans against predatory lenders and corporate fraudsters. Late last week, Elon Musk and his Department of Government Efficiency (DOGE) took over the CFPB. According to news reports, Musk has taken over sensitive data and confidential supervisory information that the CFPB gathers from companies in order to keep consumers safe. In a flurry of announcements over the weekend, acting CFPB Director Russell Vought—key architect of the right-wing Project 2025 playbook—also brought the oversight work of the consumer protection agency to a halt, closing the HQ offices and directing staff to stay home.
Created in the aftermath of the 2008 financial crisis, Congress gave the explicit directives to establish offices and programming dedicated to protecting vulnerable consumers, issue regulations to govern particular industries, and ensure transparent access to information about consumer financial products. Since opening its doors, the CFPB has directly obtained over $21 billion in relief for over 205 million people from companies that illegally cheated consumers. This includes more than $5 billion in relief for Americans with student debt, and uncovering evidence that led to the U.S. Department of Education cancelling $188.8 billion of student debt for 5.3 million borrowers. The CFPB has been hard at work over the last decade and is broadly popular among both Democratic and Republican voters, and the agency has received support across many different sectors.
This past year, the Bureau concluded its years-long litigation against one-time market leader Navient Corporation, permanently banning the firm from the federal student loan servicing industry. Evidence uncovered during the prosecution of Navient led the Biden Administration to cancel student debt for nearly 1.5 million Americans who relied on affordable repayment options mismanaged by student loan companies like Navient.
On average, borrowers who reached out to the Student Loan Ombudsman were fighting to recover thousands of dollars—money they are rightfully owed but denied due to servicer mistakes and systemic failures. Now, with over 10,000 complaints sitting in limbo and no office to follow up, borrowers are left stranded. There could be thousands, if not millions, of dollars left on the table for student loan borrowers due to the ongoing failures of our debt-financed education system and the dismantling of hard-won borrower protections under the guise of efficiency orchestrated by an unelected billionaire.
Further Reading
Maryland lawsuit filed to prevent Trump Administration from defunding the CFPB: Mayor and City Council of Baltimore, Economic Action Maryland Fund v. Vought (1:25-cv-00458)
National Treasury Employees Union et al. lawsuit against Trump for illegally shutting down CFPB: Lawsuit Challenges Trump Administration’s Illegal Effort to Shut Down CFPB
SBPC and Consumer Federation of America (CFA) memo identifying 87 congressionally imposed mandates Director Vought is refusing to perform: Advocates Applaud Lawsuits Challenging Trump and Vought’s Corrupt and Unlawful Attempt to “Delete” Consumer Watchdog Agency, CFPB
SBPC memo on Twitter/X payments: Twitter/X Payments: Public Corruption Poses Risks for Consumers and Competition
SBPC blog on Musk and DOGE illegal attempt to “delete” CFPB: Elon and DOGE Are Attempting To Illegally “Delete” the CFPB, Here Is Why This Matters To Student Loan Borrower
SBPC press release on CFPB Director Chopra’s firing: CFPB Director Chopra’s Firing Tops Oligarchs’ Wishlist, Foreshadows Swing in Consumer Agency Priorities to Benefit Big Banks and Billionaires
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.