Elizabeth Warren Thinks Trump’s Pick for Student Loan Watchdog is Corrupt

Written by adminAugust 27, 2019
Uncategorized

There’s clearly no love between Elizabeth Warren and Pres. Trump as they differ in just about every issue. The president recently did something that Warren wasn’t too happy about: hiring Robert Cameron as the newest student loan ombudsman. In fact, the move angered her so much that she sent three letters to the Consumer Financial Protection Bureau, Treasury Secretary Steve Mnuchin, and the newest ombudsman himself.

Warren claims that Cameron is scandal-plagued, corrupt, and should never be the newest student loan watchdog. This position was created solely for the purpose of protecting students who take out student loans. There’s a lot of predatory behavior in the student loan game is minds Americans have been suckered in by false ads and scammed by their lender.

It’s the job of the ombudsman to gather together all the complaints and help settle any disputes that have occurred. But according to Warren, Trump chose the wrong person for the job as he himself has a history of corruption within the industry. It’s also Cameron’s job offer advice to Congress, the Treasury Secretary, and even the CFPB on how to improve how the student loans are done.

The Burden of Debt is Crushing

Currently in the United States, 44 million Americans owe $1.6 trillion in student loan debt. This is a major burden and a crisis that is hurting our economy as crushing our young adults who are attempting to get started in life. The last thing they need to do is to graduate tens of thousands of dollars in debt.

Studies have come out revealing that many young Americans are putting off major life decisions such as getting married, buying healthcare, starting a business, saving for retirement, and even having children. Many are choosing to move back in with their parents because they simply cannot afford to pay their student loans and live on their own.

Chairman of the Federal Reserve, Jerome Powell, testified in a hearing that the student loan crisis could cause long-term ramifications and even drag on the US economy in the future. Student loan debt has become a major talking point among 2020 presidential candidates. Warren is one of the candidates who wants to eliminate almost all of the student loan debt out there, mostly for lower income borrowers.

In Warren’s mind, appointing Cameron to the position is “mind-boggling.”

“A former PHEAA executive’s appointment to the role represents the worst form of revolving-door corruption and conflict of interest, and it epitomizes industry capture of our government. Given Mr. Cameron’s responsibility for PHEAA’s compliance with federal law, regulations, and programs, and PHEAA’s record of compliance failures, it is clear that student-loan borrowers cannot count on Mr. Cameron to uphold their interests,” she writes.

Warren then called on Secretary Mnuchin to deny Cameron’s appointment. Whether he will listen is probably doubtful.

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New Partial Student Loan Forgiveness Tiered Program Being Worked Out

Written by adminSeptember 11, 2018
Student Loan Consolidation

At the start of September, the student loan watchdog abruptly resigned his post. He cited in his resignation that the Trump administration was doing little to protect students. His job is to take on legitimate fraud cases to keep the process fair for students. This type of fraud used to result in the student receiving full student loan forgiveness benefits. Not any longer.

In recent years, for-profit schools have developed a reputation for using aggressive marketing tactics. Likewise, these tactics include promising ultra-high job placement rates. They even offer to help the student connect with employers. These promises ultimately proved fruitless. Students continue to rack up massive amounts of student loan debt.

Student Loan Forgiveness Under Trump

President Trump and Education Secretary Betsy DeVos aren’t real fans of student loan forgiveness. Their attempt to wipe out the program instituted by the Obama administration wasn’t successful. At one time, if a student was swindled or defrauded by their school they could have their student loan debt forgiven. Reluctantly, the Trump administration agreed to keep the program intact for the 2018 budget season.

DeVos is in favor of a different type of program. She appears to be in favor of a new tiered relief policy based upon income.

There were 16,000 claims of fraud against for-profit colleges. Only 1,000 of those cases received full student loan forgiveness. The rest received varying degrees of forgiveness. It was all based around their income after they graduated. In total, only 48,000 claims of fraud and abuse were approved out of the 165,000 filed since Obama started the program.

A Balanced Approach?

On average, DeVos’s education department has only forgiven around 30% of a student’s loan. They compare the earnings after graduation to other students who have graduated from the same program at other schools. Still, while the Obama administration never denied a fraud request, the Trump administration has dismissed over 9,000 cases.

Because of this, critics of DeVos and this new tiered program say she’s in the pocket of for-profit schools. They say she brought in officials from these schools to help serve within the agency. They appear to be serving the interests of the schools by easing regulations and making it tougher for students. However, according to DeVos, this is just a more balanced approach.

http://financialhelpers.com/student-loan-watchdog-has-abruptly-resigned/

“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly. (This new process) will allow claims to be adjudicated quickly” and “also protects taxpayers from being forced to shoulder massive costs that may be unjustified,” said DeVos.

Along with President Trump, she believes it’s unfair for taxpayers to bear the brunt of paying for full student loan forgiveness. With this new program, she feels that it’s a more balanced approach to helping students. Yet, while fraud happens, students still receive a degree and find meaningful work after graduation.

The Crisis Rages On

The Obama administration appeared to take the situation much more seriously. They went after the significant for-profit schools that were using deceptive processes. ITT Tech and Corinthian College are shut down. Many thousands of students had their debt erased at a total of $550 million.

Student loan debt rose to over $1.5 trillion and continues to climb. It’s a crisis likely to continue. Now that the economy is doing better, students won’t be as desperate to seek a degree for meaningful work. They’ll have the tools they need to understand their student loans. It won’t be easy. Life can be difficult with the burden of loan debt. In fact, many students will suffer for decades. Still, the government will continue to debate this for decades to come.

Before starting college, educate yourself. Financial Helpers is here to get you through the process. If you have any questions, don’t hesitate to call us at the number below:

Call Now 844-332-2079

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