Trump Administration rolls back student loan protections

Under Mick Mulvaney the Consumer Financial Protection Bureau is stepping back from protecting students from predatory student loans and from for-profit colleges that took advantage of students and saddled them with large student loan debt while providing sub-par education. In May Mulvaney eliminated the "Office of Students and Young Consumers" within the CFPB and terminated enforcement actions against some of the most abusive For-profit colleges. Several senior CFPB officials have resigned in protest over Mulvaney roll-backs of consumer protections.

"Default and delinquency rates on student loans are higher than many observers realize, with new data showing 30% of borrowers struggle to manage their loans five years after repayment begins. The figures have been understated in official statistics because the government traditionally looks only at default rates over the first three years of repayment." (Retirement Security Smartbrief). 

"Federal laws attempting to keep schools accountable are not doing enough to stop loan problems. The law requires that all colleges participating in the student loan program keep their share of borrowers who default below 30 percent for three consecutive years or 40 percent in any single year." Above 30 percent is a “high” default rate. "That’s a low bar."

"Among the group who started repaying in 2012, just 93 of their colleges had high default rates after three years and 15 were at immediate risk of losing access to aid. Two years later, after the Department of Education stopped tracking results, 636 schools had high default rates."

For-profit institutions have excessively high default rates. 

source: The Student Debt Problem Is Worse Than We Imagined The New York Times

By Ben Miller

Mr. Miller is the senior director for postsecondary education at the Center for American Progress. 

So students are suffering while taxpayers lose out on unpaid debts.   

"Seth Frotman, student-loan ombudsman at the Consumer Financial Protection Bureau, has resigned, saying the CFPB is no longer protecting student borrowers. "Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America," he said in his resignation letter to acting Director Mick Mulvaney.