David Bergeron is a career official who is working with the U.S. Department of Education. He has appreciated the move when it would be possible for the government to save money on providing loans to the students. Besides, it needs to help the distressed student borrowers too.
Once this step was actually taken by the government, in 2010, his agency became the biggest lender of loans to the college students in the US. He has over a decade of experience in federal service. But he also realized at that time that the government will take maximum advantage of these student loans.
Now seven years later, there are nearly 1 million former students who are defaulting on their government-backed student loans each year. His former agency has now pulled the plug on this partnership with consumer bureau that has the task to protect them.
Now the Education Department led by Betsy DeVos has informed this Consumer Financial Protection Bureau that it will not be sharing any more critical information about these loans. It needs to be noted that this refers to $1.3 trillion of the total in case of federal student loans. This marks an end to a partnership that allowed the CFPB to sue the loan companies. It had also forced several others to change the practices being followed by them in this household debt market.
This move is being backed by Betsy DeVos. Many of the former high-ranking federal officials are fearful that this is a directive that is promising high leniency to those loan companies that are trying to collect on debts. In addition, it also indicates that it is an effort by the Trump administration for undermining the enforcement authority of the bureau.
David says that this system will be against the interest of the borrowers and rather toward the government’s interest. He says that the CFPB was a necessary check on this.
Earlier, the Republican members of the Congress had been trying to restrict its authority. They had even asked to fire its director, Richard Cordray. This is the latest move that is coming in from Education Secretary Betsy DeVos.
It was in 2010 that the Obama administration had created the CFPB after the financial crisis. The aim was to crack down on any shady student loan companies. This would have also supervised businesses that were operating earlier with little oversight.
Even though few Americans are aware of CFPB, they have filed already over 15,000 complaints with it about the federal student loans since 2013. In this way, the consumer bureau has curbed loan practices which it feels are hurting the borrowers. This would also include actions that can be carried out on behalf of the government.
Visit http://www.betsydevos.com/ to learn more about Betsy DeVos.