Biden names top consumer advocate to manage student loans

Choice of Cordray affirms high-profile focus on problem of college affordability

May 4, 2021
Student debt
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The Biden administration has appointed Richard Cordray, the chief of the nation’s main consumer financial protection agency in the Obama administration, as its head of managing federal student loans.

The high-profile choice – Mr Cordray is a former Ohio attorney general who first led the nation’s new Consumer Financial Protection Bureau in 2012 – was widely seen as another clear sign of the administration’s focus on the problem of college affordability.

In heading the Education Department’s Office of Federal Student Aid, Mr Cordray will manage the $1.6 trillion (£1.2 trillion) in existing student debt owed by 45 million borrowers and the systems by which current students receive federal grants and loans.

The selection “could signal a shift for the relatively obscure government office”, the National Association of Student Financial Aid Administrators said in one among many enthusiastic responses to the appointment from advocates of student borrowers.

“If ever we needed a sign that Federal Student Aid is a different organisation than it was when it was created 20 years ago, the appointment of Richard Cordray is it,” said Justin Draeger, president of NASFAA, which represents more than 28,000 student aid officers at nearly 3,000 colleges and universities.

The appointment comes as Joe Biden faces persistent pressure to fulfil, at a minimum, his campaign trail pledges last year support cancelling up to $10,000 per borrower in federal student loan money. Mr Biden spoke of taking action through legislation, though he now has the power as president to accomplish the job unilaterally.

In that regard, Mr Cordray is significant as a close ally of Elizabeth Warren, a leading progressive in last year’s presidential race and outspoken advocate of aggressive loan forgiveness. Before her election to the Senate, Ms Warren played a central role in the creation of the Consumer Financial Protection Bureau and, after failing to persuade Barack Obama to name her as its leader, backed Mr Cordray in the job.

Like Ms Warren, Mr Cordray has been a consistent critic of for-profit colleges. Mr Biden’s secretary of education, Miguel Cardona, said in a statement that he was confident the student aid office under Mr Cordray “will provide the kind of service that our students, families and schools deserve”.

The vacancy was created by the resignation in March of Mark Brown, who had been appointed two years earlier.

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