Image by iStock

The federal official in charge of protecting loan-seeking students from predatory lending practices has stepped down, NPR reported.

Seth Frotman resigned from his position as the the student loan ombudsman at the Consumer Financial Protection Bureau in a harsh resignation letter, which was obtained by NPR. He wrote that the current leadership “has turned its back on young people and their financial futures.” The letter was addressed to Mick Mulvaney, the bureau’s director.

In the letter, Frotman accuses Mulvaney and the Trump administration of sabotaging the CFPB and its ability to protect student borrowers.

Forwarding the News

Thoughtful, balanced reporting from the Forward and around the web, bringing you updated news and analysis each day.

Terms(Required)

I agree to the Forward's Terms of Service and Privacy Policy

Email(Required)

“Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” it read. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”

Frotman also claimed that CFPB’s leadership withheld a report, revealing new evidence that some of the nation’s largest banks were “saddling [students] with legally dubious account fees.”

This leads to questions over the federal government’s willingness to oversee the $1.5 trillion student loan industry, according to NPR.

Congress created the position of student loan ombudsman in 2010, in the wake of the financial crisis, NPR reported. Frotman, who held the role for the past three years, oversaw the Office for Students and Young Consumers. He was charged with reviewing thousands of complaints from student borrowers about the questionable practices of private lenders, loan servicers and debt collectors.

Alyssa Fisher is a news writer at the Forward. Email her at [email protected], or follow her on Twitter at @alyssalfisher

The Forward is free to read, but it isn’t free to produce

I hope you appreciated this article. Before you go, I’d like to ask you to please support the Forward.

Now more than ever, American Jews need independent news they can trust, with reporting driven by truth, not ideology. We serve you, not any ideological agenda.

At a time when other newsrooms are closing or cutting back, the Forward has removed its paywall and invested additional resources to report on the ground from Israel and around the U.S. on the impact of the war, rising antisemitism and polarized discourse.

Readers like you make it all possible. Support our work by becoming a Forward Member and connect with our journalism and your community.

This is a great time to support independent Jewish journalism you rely on. Make a gift today!

—  Rachel Fishman Feddersen, Publisher and CEO

Support our mission to tell the Jewish story fully and fairly.

$90 $180

$360

Other amount