WASHINGTON–A familiar name has been selected as the new head of federal student aid in the Biden administration, a post that will put him at the center of the debate over forgiving student debt.
The Biden administration has selected Richard Cordray, the first director of the Consumer Financial Protection Bureau who exited for a failed run at the governorship of his native Ohio, to the position within the Education Department.
“The issue is a tricky one for President Biden,” noted the New York Times. “Though he has endorsed canceling up to $10,000 per borrower through legislation, Biden has been pressured by some Democrats to forgive much more, and to sign an executive order making it happen if Congress fails to act.
Relieving the Burden?
“But with his new position within the Education Department, the primary lender for higher education, Mr. Cordray might be able to relieve the president of that burden by canceling student debt administratively,” the report continued. “Democratic leaders are pushing for up to $50,000 per borrower in debt relief.”
Cordray, who made a name for his aggressive investigation of mortgage foreclosure practices, leading the CFPB from 2012-17, also has close ties to Sen. Elizabeth Warren (D-MA), who led the charge to create the CFPB. That close relationship raises “questions about how closely their views align on the question of canceling student debt. Ms. Warren has argued that it is a crushing burden for young people, and that relieving it would reduce economic inequality,” the Times reported.
‘Just a Giveaway’
The Times noted that some critics say that a large percentage of that debt is held by people who spent the money to get an elite education and advanced degrees that pay off very well.
“Forgiving $50,000 in student debt for millions of people ‘is just a giveaway to the people who are not the people who suffered the most from the pandemic, who are not the people who need it the most in society and the economy, and we should be looking for better-targeted solutions,’” Sandy Baum, a senior fellow at the Urban Institute, told the Times.
Baum nonetheless welcomed Mr. Cordray’s appointment, saying she expected him to approach the problem by changing the way the system treats people and preventing them from being exploited, the Times added.