Your former student loan watchdog resigned in September.
Now, he’s back in a new role. Here’s what you need to know and how it can affect you.
The Student Borrower Protection Center
Seth Frotman resigned from the Consumer Financial Protection Bureau (CFPB) in September, ending his three-year tenure as student loan ombudsman and seven years of service at the CFPB.
The former student loan watchdog returned yesterday with the launch of the Student Borrower Protection Center (SBTC), a national nonprofit organization focused solely on alleviating the burden of student debt across America.
SBTC’s goal is to lead a nationwide effort to protect student loan borrowers and end the student debt crisis through aggressive advocacy and “innovative litigation strategy.”
“Tens of millions of American families are trapped in a broken student loan system, squeezed by rising debt and widespread abuses by a predatory industry,” said Frotman, who serves as SPBC’s Executive Director. “The federal government hasn’t just walked away from the fight on behalf of borrowers, it is actually arming the other side. The Student Borrower Protection Center is here to fight back—in state capitals, in Congress, in court, and in communities across the country.”
SBTC also announced a partnership with University of California, Irvine School of Law to build a foundation of research to support this work, support borrower rights and advocate for policy changes.
As the student loan 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.
The Office of Students within the CFPB has helped return over $750 million to student loan borrowers who have been harmed by improper student loan practices.
In his resignation letter to Acting CFPB Director Mick Mulvaney, Frotman wrote that “it has become clear that consumers no longer have a strong, independent Consumer Bureau on their side.”
“Unfortunately…, the Bureau has abandoned the very consumers it is tasked by Congress with protecting,” Frotman’s resignation letter read. “Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
Over the past year, within the administration, some changes and proposed changes that impact student loans include, among others:
What To Do Next: Action Steps
Given the recent resignation of the student loan ombudsman, is there any action you need to take regarding your student loans?
1. Do nothing
The resignation 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 21 ways for student loan repayment.
3. Pay off your student loans faster
Here are some simple strategies to pay off your student loans faster.
4. Focus on these four strategies to manage your student loans:
According to Make Lemonade, there are more than 44 million borrowers with $1.5 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt. The average student in the Class of 2017 has almost $40,000 in student loan debt. Approximately 11.0% of student loan debt is in default or over 90 days delinquent.