Seth Frotman, who has served as the student loan ombudsman at the Consumer Financial Protection Bureau (CFPB) for the past three years, resigned from his position on Monday, Aug. 27. The top student loan watchdog resigned with a letter that blamed the Trump administration and current leadership of turning its back on the financial futures of students. Frotman led the CFPB’s Office for Students and Young Consumers, overseeing thousands of complaints from students who had received loans while he was in his role.
Frotman says that the current leadership “has turned its back on young people and their financial futures.”
“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” the resignation letter read, via The Hill. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
The letter was addressed to CFPB acting director Mick Mulvaney.
NPR had more detail on Frotman’s role at the CFPB.
Frotman has served as Student Loan Ombudsman for the past three years. 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. As Ombudsman 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, loan servicers and debt collectors.
Since 2011, the bureau has handled more than 60,000 student loan complaints and has returned more than $750 million to borrowers.
Unfortunately, the Trump administration announced last August through the U.S. Department of Education that it would stop sharing information with the bureau about the oversight of student loans and claimed the CFPB was “overreaching and unaccountable.”
The CFPB has not responded to the news at this time.
