FSA's Cordray is Exacerbating the Student Loan Crisis
WASHINGTON, D.C., October 27, 2021
Chief Operating Officer of Federal Student Aid (FSA) Richard Cordray has a history of government overreach. While heading the Consumer Financial Protection Bureau, Mr. Cordray relied on expansive executive power to put financial institutions under the thumb of the federal government.
There is no question that he is using the same tactics at FSA, destabilizing a student loan program already on the verge of implosion. Mr. Cordray’s aggressive tactics have been the final nail in the coffin for several student loan servicing companies – causing them to exit the federal student loan program altogether. This will spell even more confusion for students navigating the already complicated system. It is clear that Mr. Cordray doesn’t see student loan servicing companies as partners, but as adversaries.
Mr. Cordray is the first partisan politician to hold this position within the FSA. This is a grave miscalculation on the part of the Biden administration. With a $1.7 trillion student loan crisis on our hands, we need someone with real operational experience and competent business acumen to set this ship aright. With Cordray at the helm, we will stray off course more than ever.
Cordray clearly doesn’t have a plan for reversing the damage 56 years of federal control over student loans has caused. What we will get from him is more of the same—an indiscriminate amount of spending with less and less to show for it.
Further, Mr. Cordray’s talk about enforcement is all one-sided. Democrats only want to hold institutions accountable when it leads to a beneficial political outcome for their side, not when it actually helps students.
Biden’s extension of the federal student loan freeze, the executive overhaul of the PSLF program, and other proposed actions by FSA are attempts by Democrats to further their blanket student loan forgiveness agenda. The student loan payment pause has already cost taxpayers nearly $100 billion, and they can expect to be on the hook for much more if the Department’s other progressive policies are implemented.
With a crisis as big as the student debt crisis, there is no room for partisan politics. FSA needs a true leader—not someone playing political games at the expense of students and hardworking Americans.