The Consumer Financial Protection Bureau, in response to the Trump Administration’s goal to stop investigations of potential abuses, will close its student lending office. The office is responsible for getting back $750 million.
The Student Lending Office was handling the investigation into Navient, a troubled student loan lender the CFPB filed lawsuits against last year for its abusive practices. The office also looked into Corinthian Colleges.
While the move is being called a “modest reorganizational change,” this is not the first time the agency reorganized the bureau, making changes to the CFPB’s goals. A similar action took place in the Office of Fair Lending, which moved the department under the education department. That office was focused on discriminatory problems, especially the auto lending industry.
Mick Mulvaney, CFPB acting director, said he plans to restrict the operations to what he can by law. He’s a long-time bureau critic as a South Carolina congressman with him beseeching Congress to reduce its mandate and be subjected to more oversight by Congress.
Although the stock and housing market improved from the financial crisis in 2008, the student loan market’s problems have only increased. Nearly 4.6 million Americans have defaulted on their student loans – double than the numbers four years ago. This means over 10 percent of the 42.8 million Americans with a DoE-backed student loan in default.
Consumer advocates were quick to criticize the change, claiming the student loan industry needs tough oversight due to the sheer number of borrowers.
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