For several years now, lawmakers supporting the financial industry have worked to dismantle the Consumer Financial Protection Bureau. The most recent effort calls for President Trump to remove Richard Cordray as head of the Consumer Financial Protection Bureau. Mr. Cordray is the first to lead the federal agency, which was newly formed in 2010. He has stood up for consumers, including college students, in the wake of the nation’s financial collapse.
When it comes to student loans, students need all the help they can get.
Americans now shoulder $1.2 trillion in student loan debts, and these debts are a drag on individual borrowers as well as the economy as a whole. Homeownership is one important marker of economic health, and college graduates say they are delayed in home purchase due to their student loans. Saving for retirement is another important indicator; a household carrying roughly $50,000 in student loan debt will see a wealth loss of over $200,000 in both retirement savings and home equity.
Until recently, student loan borrowers were largely at a disadvantage to Wall Street mega banks, financial firms, and even their for-profit colleges if that’s where they enrolled. These industries knew students were in a constant struggle to pay for college, and lured them into financial products on-campus that cost far more than what can found off campus.
But the CFPB has helped student consumers get a fair shake when taking on loans and credit to pay for college. The agency has investigated predatory student lending practices, sued bad actors, and highlighted troubling trends in student financial products such as campus debit cards used by students to hold their financial aid. Most importantly, it has decreased student loan debts for millions of borrowers.
In 2015, the agency secured $480 million in student debt relief for former students at the Corinthian Colleges, a set of for-profit colleges that lured its students into taking on high cost, private student loans that the company knew they could not pay back.
In 2015, the agency secured $16 million in student debt relief to private student loan borrowers at Discover Bank, which collected higher interest payments and penalty fees than it should have from borrowers.
In 2016, the agency secured $24 million in student debt relief for former students at the campuses of Bridgepoint Education, another for-profit college chain, for forcing students to pay more for their loans than advertised.
Students aren’t the only group vulnerable to predatory lending practices. The agency’s mission is to ensure that all consumers are treated fairly, not paying more than necessary in the financial marketplace. In just a few short years, the CFPB has saved consumers $11.7 billion through supervisory and enforcement work, and collected over 1 million consumer complaints.
It’s not easy to stand up to the financial industry, but Mr. Cordray has been the bold leader that students, and all consumers, have needed. Now these same forces are seeking to convince President Trump to fire him before his five year term ends in 2018, without cause.
If you want to make sure that you get treated fairly as a loan borrower, then let your senators and representatives know that keeping Cordray as the head of the CFPB keeps the marketplace fair for students.
By Christine Lindstrom, PIRG’s director of Higher Education in Washington, DC. She can be reached at firstname.lastname@example.org.