Richard Cordray, Former Ohio AG, To Oversee Federal Student Loans
Richard Cordray is back in Washington. The Biden administration has tapped him to be Chief Operating Officer of Federal Student Aid, overseeing a $1.6 trillion portfolio of federally backed student loans and other financial aid.
Cordray previously served as Ohio’s attorney general and was the Democratic candidate for governor in 2018. Prior to that, he was the Director of the federal Consumer Financial Protection Bureau (CFPB) for six years.
In Ohio alone, nearly 1.8 million borrowers owe more than $63 billion in student loans. Think tank Policy Matters Ohio says the average student loan debt load is around $30,000. That debt is keeping many, especially low-income and minority Ohioans, from saving money or buying homes.
Cordray said one available but under-utilized option is a federal program that allows debtors to get relief by providing public service.
“It’s been on the books for more than a decade. It hasn’t been well administered and there’s a lot of people who maybe should have been eligible for debt forgiveness but haven’t gotten it and that’s one of the problem areas that people are expecting me to go in and help straighten out," Cordray said.
Piet van Lier, an education analyst with think tank Policy Matters Ohio, said the current student loan system is more about profit, feeding off itself “and helping people make a profit off of these loans” as opposed to helping students afford an education.
“And it's really become this system that really can be very punishing and very hard to get out of once you have a certain amount of debt,” he said.
Cordray is a “great pick” to lead head the federal student aid office, van Lier said, pointing to Cordray’s tenure at CFPB, where he collaborated with the U.S. Department of Education on student loan issues in the first year of the Trump administration.
“And you're really taking that role and making it the central role, protecting consumers and regular people, and they did so much to do that,” van Lier said. “I think he brings with him this desire and this experience in protecting consumers, in this case, people who have borrowed money for their education. I think it's a really good fit.”
Cordray could be instrumental in leading reforms that are “student centered, education focused,” van Lier said, especially as progressive politicians call on the Biden administration to get more aggressive on student loan debt elimination and reigning in for-profit colleges.
“They [for profit-colleges] really have a reputation as being sort of predatory, higher cost, exploitative,” van Lier said. “They take advantage of people who can get these grants and get these loans and then they leave them with false promises. They don't give them what they said they would give them in terms of their education and their career opportunities.”
Statehouse News Bureau Correspondent Jo Ingles contributed to this story.