The new direction is a reversal of the government’s approach to regulating student loan companies, after then-secretary Betsy DeVos’ Department of Education argued that the federal government should monitor the system since loans are federal assets and fought to reduce state involvement in surveillance.
The FSA’s new approach, Cordray said, will be to review data requests from state and local agencies and financial regulators “promptly and approve them whenever possible.”
“It is time for us to be a partner, not a roadblock,” he added.
The senior Republican on the House Education and Labor Committee argued that Cordray’s new guidelines “bend to the whims of state-based Democratic politicians who are more interested in bankrupting companies than ‘help troubled student loan borrowers.’
“Congress charges the FSA with the duty of managing the federal student loan program for a reason. Federal programs need federal leadership. Yet COO Cordray’s first order of business is to shift its responsibilities to others. “said GOP Representative Virginia Foxx of North Carolina. A declaration.
The Biden administration, however, still faces pressure from some Congressional Democrats to write off $ 50,000 in federal student loan debt per borrower. Advocacy groups are also calling for a complete overhaul of the current borrower advocacy process.