Consumer Watchdog Is New Head of Student Loan Agency

Richard Cordray
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The former head of a government consumer watchdog agency has been put in charge of the federal student aid portfolio—and in the center of a key policy debate between the president and members of his own party around student loan forgiveness.

The first-ever director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray will take over as chief operating officer of the Federal Student Aid office, the Department of Education (ED) announced Monday. He fills the role vacated by Mark Brown, who served for two years. Federal Student Aid oversees the federal government’s student financial assistance programs, including its $1.5 trillion student loan portfolio.

Cordray begins his new job at a time when federal student loan borrowers are front and center in Washington. Pandemic relief efforts have paused payments and interest on federal student debt, as well as collections on default loans, until at least Sept. 30. There is also an ongoing debate about so-called blanket student loan forgiveness, which President Joe Biden and some members of the Democratic Party want to pursue, although they differ on how to achieve it and how much forgiveness to provide. Progressive legislators have tried for months to get the president and the ED to provide one-time forgiveness of $50,000 in student debt through executive action, but Biden has said he’d prefer $10,000 of forgiveness achieved through a legislative solution. 

Cordray previously worked as state attorney general, state treasurer, and state solicitor general in Ohio. But his six years as director of the CFPB will surely draw more attention, particularly because of how active the agency was with him at the helm. CFPB pursued 197 enforcement actions between April 2012 and November 2017, including several aimed at protecting student loan borrowers from debt relief scams and the lending practices of some for-profit schools. In the three-plus years after Cordray left CFPB, the agency only took 89 actions.

"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,” U.S. Secretary of Education Miguel Cardona said in a statement. “Cordray has a strong track record as a dedicated public servant who can tackle big challenges and get results."