The new guidance is a reversal of the government’s approach to regulating student loan companies, after the Education Department under then-Secretary Betsy DeVos argued that the federal government should be monitoring the system since the loans are federal assets and fought to curtail states’ involvement in oversight.
The FSA’s new approach, Cordray said, will be to review data requests from state and local agencies and financial regulators “quickly and approve them whenever it is possible to do so.”
“It’s time for us to be a partner, not a roadblock,” he added.
The top Republican on the House Education and Labor Committee argued that the new guidance from Cordray “bows to the whims of state-based Democrat politicians who are more interested in putting companies out of business than helping struggling student loan borrowers.”
“Congress charges FSA with the duty of running the federal student loan program for a reason. Federal programs need federal leadership. Yet COO Cordray’s first order of business is to pass his responsibilities onto others,” GOP Rep. Virginia Foxx of North Carolina said in a statement.
The Biden administration, however, is still facing pressure by some congressional Democrats to forgive $50,000 in federal student loan debt per borrower. Advocacy groups are also calling for a complete overhaul of the current borrower defense process.
Source: CNNPolitics – Breaking News