Consumer Financial Protection Bureau to Close Student Loan Office
Written by Jon-Michael Foshee
Acting director Mick Mulvaney announced in 2018 that the Consumer Financial Protection Bureau will be closing its office dedicated to investigating student loan abuses.
Over the years, the CFPB’s Office of Student and Young Consumers has opened investigations into multiple abusive loan practices that prey on students facing astronomical education fees, and has successfully sued for-profit lenders and colleges to return proceeds to victimized students.
They have helped more than 60,000 students around the country find answers for inconsistencies in their lending accounts, and have sued companies like Navient, ITT Tech, Citibank, Discover, and Wells Fargo on behalf of students who would otherwise have no recourse against these major institutions.
The CFPB has called the closing a modest reorganizational change, but Mulvaney has previously folded the bureau’s Office of Fair Lending into the education department, which combats major discrimination issues within multiple industry practices.
To date, the student loan market consists of over $1.5 trillion in transactions, and the CFPB has been responsible for returning $750 million in relief to students.
Around 4.6 million Americans, or 10% of 42.8 million total student loan debtors, were in default of their student loans as of the end of Q4 2017, which is more than double the amount reported four years prior.
Natalia Abrams, the executive director of Student Debt Crisis, recently commented that closing the student lending office “is very scary for student loan borrowers. It’s insulting. Americans are defaulting on their student loans at the highest rate in history, but [Mulvaney] is stripping away our only federal advocate for borrowers. Who will police student lending companies and for-profit colleges now?”
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