Sen. Jon Tester this week criticized the Trump Administration’s decision to tuck the student branch of the Consumer Financial Protection Bureau into a separate office – a change some say will limit the agency’s ability to defend student loan borrowers from predatory lenders.
In a May 29 letter, Tester urged Mick Mulvaney, acting director of the bureau, to reverse the directive, saying it would harm “millions of student loan borrowers,” including thousands in Montana who rely on loans to pay for college.
“Student loan debt across this country is hampering the middle class and placing undue stress on students and families alike,” Tester told Mulvaney. “We should be doing everything we can to make folks more informed about student loan debt and the rights they have under the law, not less.”
Mulvaney said the reorganization will roll the Office of Students and Young Consumers into the bureau’s larger Office of Financial Education. Mulvaney gave no explicit reason for the change, according to the Washington Post.
But student advocacy groups and several lawmakers, including Tester, see the directive as an intentional effort to handcuff the only branch of federal government focused on protecting student borrowers from “predatory lenders and debt collectors.”
Since 2011, Tester said, the Office for Students and Young Consumers has investigated more than 50,000 student loan-related complaints, leading to high-profile settlements with for-profit colleges and legal action against student loan providers.
As a result, Tester said, the office has collected more than $750 million for students who have been harmed by bad actors.
“In the last year alone, student loan debt grew by $29 billion and stood at nearly $1.5 trillion overall,” Tester wrote. “These stats show us all that students across this country need help navigating the student loan space, which is exactly the kind of work the Office of Students and Young Consumers was doing until earlier this month.”
The Montana University System couldn’t be immediately reached Friday for comment.