Democratic presidential candidate U.S. Sen. Elizabeth Warren (D-MA) photo credit: Getty Images
(Photo by Justin Sullivan/Getty Images)
Elizabeth Warren is not happy with the next choice to protect your student loans.
Here’s what you need to know.
Student Loans: Borrower Protections
Warren is unhappy that the next student loan watchdog appointee is a former student loan industry executive, which she says may hurt student loan borrowers. According to a new letter, Warren disagrees with the decision to appoint Robert Cameron as Student Loan Ombudsman of the Consumer Financial Protection Bureau (CFPB). Cameron is a Colonel and a staff judge advocate for the Pennsylvania Army National Guard, and he has served in the U.S. Army for 29 years.
What is Warren’s objection? Warren objects to Cameron’s previous position with the Pennsylvania Higher Education Assistance Agency (PHEAA), where he was responsible for litigation, compliance and risk mitigation efforts. Warren says that this creates a conflict of interest, since PHEAA is a major student loan servicer and Cameron’s job may require him to work with student loan borrowers to resolve issues against his former employer. Warren says in her letter that PHEAA also has been frequently cited for “failure to comply with federal rules and state consumer protection laws,” and generated 1,500 consumer complaints in one year. Warren says she wants a consumer advocate, not an “industry insider.”
What Is A Student Loan Ombudsman?
Think of a student loan ombudsman as a student loan watchdog who works on your behalf to protect you against unfair and deceptive financial practices. The student loan ombudsman is responsible for “receiving, reviewing and attempting to resolve complaints from private student loan borrowers” and for “compiling and analyzing complaint data on private education loans and making appropriate recommendations.”
Seth Frotman resigned as the CFPB student loan ombudsman last year, ending a three-year tenure in that role and seven years of service at the CFPB. In his resignation letter, Frotman wrote that “it has become clear that consumers no longer have a strong, independent Consumer Bureau on their side.” As ombudsman, Frotman provided assistance to student loan borrowers and potential borrowers, answered student loan questions and resolved issues with student loans. He also reviewed thousands of student loan complaints regarding private lenders, student loan servicers and student loan debt collectors.
Frotman worked with the CFPB’s Office of Students, which works to “empower students, young people, and their families to make more informed financial decisions about saving and paying for college, accessing safer and more affordable financial products, and repaying student loan debt.” The Office of Students has helped return over $750 million to student loan borrowers who have been harmed by improper student loan practices.
What To Do Next
So, given this latest student loan update, is there any action you need to take regarding your student loans? Here are some potential options.
1. Do nothing
The appointment in itself doesn’t need to change your normal course for student loan borrowing or student loan repayment.
If you have a student loan issue or student loan complaint, you can still contact:
2. Have a student loan repayment game plan
Here are 30 ways to repay student loans.
3. Focus on these four strategies to manage your student loans:
Determine your financial, personal and life goals and match the best financial options:
Student Loan Refinancing: lower interest rate
Student Loan Consolidation: organize student loans; doesn’t lower interest rate
Income-Driven Repayment: lower monthly payment, but not lower interest rate
Student Loan Forgiveness: tax-free and potentially taxable options; must meet requirements
This student loan quiz takes less than one minute to complete and provides you with a free, customized student loan repayment plan.
