Seth Frotman, student loan watchdog resigned, accuses Trump of serving financial companies

Seth Frotman, student loan watchdog resigned, accuses Trump Administration of serving powerful financial companies. 

Seth Frotman, who oversaw protecting student borrowers from predatory lending practices has resigned. In a scornful resignation letter addressed to Mick Mulvaney, acting director of the Consumer Financial Protection Bureau(CFPB), Frotman said, current leadership "has turned its back on young people and their financial futures."

Frotman also added, "Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America."

As watchdog and assistant director, Frotman oversaw the CFPB's Office for Students and Young Consumers and reviewed thousands of complaints from student borrowers about the questionable practices of private lenders, debt collectors, and loan servicers. Congress created the position in 2010, in the wake of the financial crisis, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since 2011, the CFPB has handled more than 60,000 student loan complaints and, through its investigations and enforcement actions, returned more than $750 million to aggrieved borrowers.

Student loan debt weighs more heavily on students of color than on their white counterparts. An estimated 86.8% of black students borrow federal student loans to attend a four-year public college, as opposed to 59.9% of white students, according to the National Center for Education Statistics (NCES). With rising tuition costs outpacing inflation and wage growth, many students are struggling to afford college. In fact, about 44 million Americans owe over $1.48 trillion in student loan debt. Data from Demos and NCES show that black and Hispanic students are paying more in student loans than white students.

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