On Monday it was announced that the nation’s top student loan official Seth Frotman will step down. According to the AP, Frotman was the student loan ombudsman at the Consumer Financial Protection Bureau since 2016. According to NPR, he oversaw thousands of student borrowers complaints as well as protected student borrowers from questionable private lenders, loan services, and debt collectors.Â
In his resignation letter addressed to the agency’s president Mick Mulvaney, Frotman says the agency has “turned its back on young people and their financial futures,” and that the agency’s leaders choose to serve powerful financial companies instead of it’s consumers.Â
“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” the letter said, NPR reports. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
The top student loan watchdog, Seth Frotman, has resigned from the Consumer Financial Protection Bureau, arguing that its current leadership has undermined efforts to protect student borrowers. https://t.co/Q9yRl2dzgp
— NPR (@NPR) August 27, 2018
According to NPR, the CFPB has managed over 60,000 student loan complaints, and has returned over $750 million to borrowers since 2011. Since Trump’s presidential election, the office has changed. Last year, the US Department of Education decided that it wouldn’t share information with the agency about the departments error of federal student loans. According to the Associated Press, Mulvaney has scaled back Frotman’s enforcement work by basically shifting the agency to the financial education office. This means his work would be primarily in information-sharing than in investigations.Â
“The Bureau’s current leadership folded to political pressure… and failed borrowers who depend on independent oversight to halt bad practices.”
This comes at a time when student loan policies are being challenged. Currently, the Department of Education wants to change aid that is meant for defrauded students. Back in December 2017, the department did announce a new system that would restrict some student loan refunds for students, who said they were defrauded by their colleges, by linking it to their income.Â