A familiar name is coming back to help regulate the accounts receivable management industry. Yesterday, it was announced that Richard Cordray — the former director of the Consumer Financial Protection Bureau — has been hired as the Chief Operating Office of the Department of Education’s Federal Student Aid, which oversees $1.6 trillion of student loans.
The announcement was lauded by consumer advocates, who said the announcement shows the Biden administration is “serious about doing what’s necessary to protect borrowers and address the student debt crisis.”
Cordray spent six years as director of the CFPB before resigning in November 2017 to run for governor of Ohio. Cordray was known as a staunch defender of consumer protections and the CFPB frequently engaged in enforcement actions, many of those against student loan originators and collectors.
Cordray cited the close working relationship he already has with Rohit Chopra, who has been nominated to be the next director of the CFPB. Chopra served as the CFPB’s top student loan official under Cordray.
“So in many ways, 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,” Cordray said in a published report.
Many have been calling on President Biden to take the extraordinary step of cancelling some of all of the outstanding student loan debt, to help boost the economy and individuals who have been affected by the COVID-19 pandemic. Critics of the idea say that canceling debt would do little to boost consumer spending and help the economy.
“I am thrilled that Richard Cordray will be joining the Department of Education as the Chief Operating Officer of Federal Student Aid,” said Education Secretary Miguel Cardona in a statement. “It is critical that students and student loan borrowers can depend on the Department of Education for help paying for college, support in repaying loans, and strong oversight of postsecondary institutions. Cordray has a strong track record as a dedicated public servant who can tackle big challenges and get results. I am confident that under his leadership, Federal Student Aid will provide the kind of service that our students, families, and schools deserve.”