AFT Hits White House as Student Loan Watchdog Chief Resigns - Higher Education
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AFT Hits White House as Student Loan Watchdog Chief Resigns

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The president of the American Federation of Teachers union is sharply criticizing the Trump administration following a top official’s announcement Monday that he is resigning Friday from the federal Consumer Financial Protection Bureau.

The departure of Seth Frotman – who has been with the bureau since its creation by Congress in 2011 and has served as student loan ombudsman since 2016 – will leave a vacancy in top oversight of the $1.5-trillion student-loan market.

In his resignation letter, Frotman expressed what he sees as hostility in President Trump’s administration toward protecting the nation’s 44 million student borrowers.

Randi Weingarten

AFT President Randi Weingarten issued a statement saying the White House “has deliberately set out to gut and defang” the bureau. “It has shirked its responsibility to protect student borrowers, choosing instead to coddle the for-profit colleges and rogue loan servicers that would prefer to escape the spotlight the CFPB has shone on them.”

The statement continued:

“AFT members have benefited enormously from Seth’s work. Seth and his team assisted us with creating the content of our student debt clinics. The CFPB was the place we directed members to who ran into problems getting their servicers to communicate clearly and accurately (or at all), and it regularly helped resolve problems our members encountered. We supported the bureau’s advocacy for Public Service Loan Forgiveness, a program for which the overwhelming majority of AFT members with student loan debt are eligible. And because the AFT’s membership is predominantly female, the real-life situations our members encountered have contributed to the CFPB’s work on women and student debt.”

Weingarten called on the bureau to “return to its historic mission to protect the powerless, rather than shielding the bad actors preying on them.”

The bureau was set up to address complaints of student loan borrowers across the nation and has handled tens of thousands of complaints, disproportionately against for-profit institutions for shady recruitment practices.

Student loan debt has eclipsed credit debt as the biggest form of debt in America, more than doubling from just under $639 billion in 2008 to roughly $1.5 trillion a decade later. According to the U.S. Department of Education, 13.6 percent of all student loans are delinquent or in default.

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