The Trump administration has appointed a longtime student loan industry leader to be the federal government’s primary watchdog for the $ 1.5 trillion student loan market.
Robert Cameron will be the Consumer Financial Protection Bureau’s new student loan ombudsperson, the office said on Friday. The work was designed to protect student loan borrowers from bad practices in the student loan industry. It’s one of the few jobs explicitly named in the Dodd-Frank Act, the law passed after the 2008 financial crisis that created the CFPB. It is considered the reference office for borrowers who complain about their loans.
Cameron most recently worked at the Pennsylvania Higher Education Assistance Agency, better known as Fed Loan Servicing, as a Compliance and Risk Mitigation Officer. This agency has been cited for bad industry practices, including the way it has handled Distressed Public Service Loan Forgiveness Program, designed to allow student loan borrowers who work in the public service to have part of their loan balances canceled.
A report from the Office of the Inspector General of the Department of Education released this year found that Fed Loan employees received a “fail” rating on interactions with borrowers 11% of the time, far more than the industry average of 4%.
The post of CFPB’s student loan ombudsman has been vacant for almost a year. Seth Frotman, a person appointed by the Obama administration, resign in protest of the Trump administration’s handling of the student loan issue. Frotman said at the time that the White House was hostile to borrower protection and used the Consumer Financial Protection Bureau to serve the interests of powerful corporations.
Frotman now runs the Student Borrower Protection Center, trying to do outside of the federal government what he used to do in the office.
“It is scandalous that an executive at the student loan company who has deceived students and taxpayers, and who is at the center of all the big industry scandals over the past decade, is now charged with protecting rights of borrowers, “Frotman said in a statement Friday. declaration.
Rising levels of student debt remain a hot political topic, with some Democratic 2020 presidential candidates calling for a nationwide student loan cancellation program. One in ten student borrowers are behind on their loan repayments.