Trump appoints student loan industry exec to watchdog job
New York – The Trump administration has hired a longtime student loan industry executive to be the federal government’s top watchdog for the $1.5 trillion student loan market.
Robert Cameron will serve as the Consumer Financial Protection Bureau’s new student loan ombudsman, the bureau said Friday.
It’s a job designed to protect student loan borrowers from poor practices in the student loan industry and one of the few positions explicitly named in the Dodd-Frank Act, the law passed after the 2008 financial crisis that created the bureau. It’s considered the go-to office for borrowers who have complaints about their loans.
Cameron most recently worked at the Pennsylvania Higher Education Assistance Agency, better known as FedLoan Servicing, as its head of compliance and risk mitigation. PHEAA has been cited for poor industry practices, most notably for how it has handled the troubled Public Service Loan Forgiveness program, a program designed to allow student loan borrowers who work in public service jobs to get part of their loan balances forgiven.
A report written by the Department of Education’s Inspector General’s Office released earlier this year found that FedLoan employees received a “fail” grade on interactions with borrowers 11% of the time, far more than the industry average of 4%.
The CFPB’s student loan ombudsman position has been vacant for nearly a year. Seth Frotman, an Obama administration appointee, quit in protest of the Trump administration’s handling the issue of student loans. Frotman now runs the Student Borrower Protection Center, trying to do what he was doing at the CFPB from outside the federal government.
“It is outrageous that an executive from the student loan company that has cheated students and taxpayers, and is at the center of every major industry scandal over the past decade, is now in charge of protecting borrowers’ rights,” Frotman said in a statement.
Mounting levels of student debt remains a hot political topic, with some 2020 Democratic presidential candidates calling for a national student loan forgiveness program. This while one in 10 student loan borrowers have fallen behind on repaying their loans.