The top government official, Seth Frotman overseeing the $1.5trillion student loan on Monday, August the 27th resigned citing he says is the White House’s open hostility toward protecting nation’s millions of student loan borrowers.
Seth Frotman who has been the student loan official since 2016 will be stepping down from his position at the end of the week, according to his resignation letter which was obtained by The Associated Press.
Frotman is the latest high-level departure from the Consumer Financial Protection Bureau since Mick Mulvaney, President Donald Trump’s budget director who has been also acting director of the bureau, took over in late November.
Under Mulvaney, the bureau has scaled back its enforcement work and has proposed revising or rescinding all of the rules and regulations it put into place under the Obama administration. Mulvaney downgraded the mission of Frotman’s student loan office and moved it the umbrella of consumer education instead of enforcement.
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Frotman said;
“The damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country”
Congress specifically created the student loan ombudsman office when it created the CFPB. A previous occupant of that position is Rohit Chopra, who is now a commissioner at the Federal Trade Commission.
The position is quite powerful, able to work with the bureau’s enforcement staff to specifically target bad behavior in the student loan market. The office has returned $750 million to harmed student loan borrowers since its creation.
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