How Is Joe Biden Fixing Student Loan Debt Today? (It's Not 'By Canceling Them.' Yet.)
Earlier this week, the Biden administration picked Richard Cordray, the former director of the Consumer Financial Protection Bureau, to head the Education Department's Office of Federal Student Aid, which among other things runs the federal student loan program.
The appointment, which doesn't require Senate confirmation, was announced by Education Secretary Miguel Cardona. Cordray is a close ally of Sen. Elizabeth Warren, and is clearly a terrific choice, judging by the reaction of Rep. Virginia Foxx (R-North Carolina), the ranking Republican on the House Education Committee. Foxx griped that
A $1.5 trillion student loan portfolio requires savvy financial management. [...] I am skeptical that a failed Democrat politician, who has a history of getting consumed by politics instead of caring for consumers, has the capability and serious character required to carry out the duties of COO of FSA.
We remember Foxx from ye Wonkette Olden Daiyes, when she griped about those kids and their clamoring for student debt relief in 2012. She had paid for college without taking a dime in student loans, she said — somehow not understanding that college no longer cost the literally $87.50 a semester that she paid at the time.
In addition to singlehandedly taking all the nation's phone calls about how to fill in financial aid forms, Cordray will be busy keeping the student loan system from collapsing. Over at the American Prospect, Robert Kuttner has a few suggestions for Cordray's to-do list.
The "first best policy," Kuttner suggests, would be taking up the call by Warren and Senate Majority Leader Chuck Schumer for Biden to cancel up to $50,000 per student in student loan debt, which Biden could do with an executive order. But that really would be Biden's call, since Cordray can't do that. Still, there are a number of student debt problems Cordray could address in his new job.
Like for instance, he could unfuck the Public Service Loan Forgiveness program, which is supposed to let people who take jobs in education and other public service fields have their loans forgiven after 10 years. Under Education Secretary Betsy DeVos, the Education Department did everything humanly possible to prevent any loans from being forgiven, presumably on the assumption that actually fulfilling Congress's commitment to people in public service was unfair to the companies that service student loans. (Public service is just another name for the Deep State, you know.)
How bad is it? Only about 1.26 percent of applicants have had their loans forgiven, and so far, the Biden administration hasn't yet formally rescinded the DeVos rules causing the low processing rates. (Crom knows there's a lot of shit to mop up.) Says Kuttner,
Cordray could put the government on the right side of this issue and provide cancellation for former students who earned the relief, but were disqualified by some technicality — that was often the fault of the for-profit servicer or the department itself.
Why yes, that sounds like a Trump policy, all right.
In addition, Cordray could help out the many people defrauded by for-profit colleges, another area where DeVos wasn't simply bad at her job but rather was actively hostile to helping victims of scammy schools. Kuttner notes that currently, students ripped off by such stellar institutions as Corinthian Colleges and ITT Tech "can get loan cancellation only if they left the offending university within 180 days of its closure." Cordray could fairly easily change that rule to help more people get some relief.
And in a bit of DeVos fuckery we had somehow managed to miss, Kuttner points out that
There are also some 400,000 people who qualify for debt cancellation as totally permanently disabled, as certified by the Social Security Administration. Under DeVos, no process was put in place to get them the relief.
Again, who would have thought that Donald Trump could possibly be indifferent to people with disabilities?
Under DeVos and Trump, the top priority of the Education Department when it came to student loans was to extract from borrowers every possible cent of what they owed, because as we all know, Donald Trump is such a stickler for making sure debts are paid. Instead, Kuttner suggests, Cordray could return his office to an emphasis on helping students pay for college, which is a radical notion, we're sure. For starters, how about cracking down on
the for-profit loan servicers on contract to the department, who often give bad advice to students in order to maximize their own profits.
Navient, one of the worst, was cited in an inspector general's report, for improperly taking over $20 million from the Education Department. It has contracts worth some $200 million a year that should not be renewed. Cordray needs to revive his office's audits and investigations unit.
For his part, Cordray says he's looking forward to being in a job where he can work with former CFPB colleagues in the Biden administration, to actually help people pursuing a college education:
I think this is a perfect opportunity for us to make very good progress forward on thinking about how we finance and make available higher education in the United States to people for whom it's more and more a critical step forward in their lives.
Weird, huh? He's not insulting anyone, not even his listeners' intelligence.
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