DeVos appointee who oversaw America’s student loans resigns — Biden education secretary pledges to ease student-debt burden

Mark Brown, the head of the office overseeing the government’s student loan portfolio, resigned Friday after urging the Biden administration to remove Brown, who was appointed by former Education Secretary Betsy DeVos.

Education Secretary Miguel Cardona said in a statement Friday morning that he had accepted Brown’s resignation from the position of chief operating officer of the Office of Federal Student Aid. In the statement, Cardona also pointed out his priorities for the office and higher education, as well as student debt more broadly.

“Under my leadership, the Department of Education will work to strengthen the college as a reliable pathway to the middle class while protecting students and borrowers,” Cardona said in the statement. “Serving our nation’s students, the Department of Student Grants will once again focus on improving access to and management of federal grants, reducing student debt, and carefully managing taxpayers’ money.”

$ 1.5 trillion in federal student loans

Though unknown, the federal student grant office is critical to the student loan experience of borrowers. The office oversees the government’s $ 1.5 trillion student loan portfolio and is responsible for disbursing the loans and grants given to schools on behalf of students, overseeing the companies that collect student loan payments from borrowers, for the implementation of aid and repayment programs and more.

MarketWatch reported in January Senator Elizabeth Warren, a Massachusetts Democrat, called for a new head of office. Have borrower stakeholders said Brown too should be replaced.

In a statement released Friday, Warren said Brown’s resignation was “good for American borrowers” and she looks forward to “working with Secretary Cardona to reform the FSA to work for student borrowers rather than large corporations,” who offer student loans. ”

Brown was appointed by DeVos in 2019 and had some time left in his five-year tenure. The head of the FSA will not necessarily be overthrown by a change in administration, but Brown’s tenure, coupled with the crucial role the head of the FSA will play in changes to student loan policy, had critics shy of an ongoing DeVos executive officer that Office under the administration of Biden.

Under the leadership of Mark Brown, the FSA had been plagued by challenges encountered in performing its required duties.

Under Brown’s leadership, the FSA had been plagued by challenges in performing its assigned tasks, which are often operationally complex and also represent high demands on borrowers. Months after the CARES Act shut down student loan payments and collections, the agency sought to shut down the wage garnishment system.

The National Student Legal Defense Network and National Consumer Law Center sued the Department of Education over the problem, and even in August – several months after the coronavirus-era payment hiatus – Thousands of borrowers their paychecks continued to be confiscated.

Although the pandemic and the economic relief efforts required to stop it came as a surprise, several months before COVID-19 became a national emergency, FSA officials knew they were struggling to control the unwieldy student loan system.

DeVos held in contempt of the court

In October 2019, a federal judge became held DeVos in contempt for the court After student loan service providers hired by the department continued to bill and seize wages and tax refunds from borrowers who were victims of fraud, despite a court order to hire them. In one Video statement published the day Brown said the agency took “full responsibility” for the problem.

The FSA faced management challenges even before Brown took over. Brown became the third person to head the office since 2017. In May of that year, James Runcie, appointed during the Obama administration to the position of resigned three years earlierIn a letter to Washington Post staff, he wrote that he was “incredibly concerned that our ability to allocate and prioritize resources, make decisions, and carry out the organization’s mission is being severely limited.”

DeVos replaced Runcie with A. Wayne Johnson, a former private student loan and credit card manager who was replaced by Brown in March 2019 and finally left the agency in October of that year, calling for the student loan to be terminated on the way out.

With Brown’s resignation, Robin Minor, the assistant chief operating officer for partner involvement and oversight, will serve as acting chief operating officer, Cardona said in the statement.

Stakeholders are distributing the names of at least two candidates to replace Mark Brown.

The advocacy groups are distributing the names of at least two candidates to permanently replace Brown, HuffPost reported Thursday. The Department of Education had no information to divulge beyond Cardona’s testimony of the new leadership of the office on Friday.

One is Mark Kaufman, the chief executive officer of the Neighborhood Impact Investment Fund, a nonprofit that works with the City of Baltimore and private partners to fund housing, commercial and other developments in historically deprived neighborhoods.

Kaufman previously served as an advisor to Assistant Secretary of the Treasury Sarah Bloom Raskin during the Obama administration and as Maryland’s Commissioner of Financial Regulation. Borrower advocates have praised Bloom Raskin’s approach to the student loan problem. during their tenure, She highlighted the challenges in the student loan market, including with service providers who are the main point of contact for borrowers for the repayment of their student loans and are overseen by the FSA.

The other, Abigail Seldinis the managing director of the Seldin / Haring Smith Foundation. Since it was founded in 2019, the organization has financed and organized projects related to student parents, Students struggling with basic needs, and others. The organization started last year Fast student, a free tool that students can use to fill out letters they send to their schools requesting changes to their grant packages. These appeals became particularly important during the pandemic as student finances changed as a result of the downturn.

Before starting the foundation, Seldin created a tool called College Abacus This enabled users to compare the real price they would pay for college – information that can be hard to come by – based on financial and other information they had entered into the tool.

In 2014, College Abacus was bought by Education Credit Management Corporation, an organization that was examined carefully about its student debt collection practices. After the sale, Seldin was Vice President, Innovation and Product Development at ECMC for approximately two years.

The daunting task lies ahead

Regardless of who becomes head of the FSA, they face a daunting task. Student loan payments and collections are to be resumed In October, the head of the FSA will play a vital role in ensuring that the payment system is back to working properly and that borrowers do not fall into arrears. The Department of Education is also in the process of revising the FSA-overseen student loan management system.

In addition, if the Biden government is to keep many of its election promises to optimize the student loan system, it needs the help of the FSA and its leadership to deliver on them successfully.

For example administrative officials have said They want to reform the PSLF and expand income-based repayment so that borrowers can repay their debts as a percentage of their income.

Borrower advocates have also urged the administration to improve enforcement of nonprofit colleges and streamline debt relief for borrowers with disabilities and those whose schools have unexpectedly closed – tasks that also require the cooperation of the FSA.

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