Social Security

Lenders could be clashing with an old nemesis soon. Richard Cordray, 62, has been named chief operating officer of federal student aid, putting him in charge of the U.S. Department of Education’s $1.6 trillion portfolio of federal student loans.

Cordray led the bureau’s crackdown on consumer abuses in debt collection, student loan servicing and for-profit colleges, garnering the respect of advocates and drawing the ire of those industries. His selection signals tougher oversight of the Education Department’s contractors and enforcement of the rules governing federal student aid.

Richard Cordray, a close ally of Senator Elizabeth Warren who served as the first director of the federal Consumer Financial Protection Bureau during the Obama years, has been selected 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 forgiving student debt.

Now, advocates are calling on the U.S. Department of Education to more aggressively monitor these arrangements after years of evidence that the current approach to the rules isn’t doing enough to protect students from potentially harmful financial products.

For Washington, the embrace of such demands marks a striking change, as an idea advanced by anti-corporate greed Occupy Wall Street activists a decade ago – and resoundingly rejected by the Trump administration – moves to the heart of political debate.

The Student Borrower Protection Center, a leading student loans advocacy organization, says the student loan forgiveness program not only should be overhauled, but that Biden’s Education Department should take a more proactive stance: cancel federal student loans for public servants who serve for at least 10 years—regardless if they completed the necessary requirements.

Talks of forgiving student debt continue as 45 million Americans get a student loan bill. Some programs already exist to relieve debt, but don’t have a widespread reach. Hear from Seth Frotman, executive director of the Student Borrower Protection Center.