Former govt. student loan official opens new firm

NEWYORK— A former top government official who oversaw the $1.5 trillion student loan market has decided to start a new private organization that he believes will do a better job protecting student borrowers than his current government counterparts.

Seth Frotman resigned from the Consumer Financial Protection Bureau in August. In a much publicized resignation letter, he alleged that the current administration was failing at its job of protecting student borrowers and impeding other people’s ability to do so. After a threemonth hiatus, Frotman is launching his own organization, called the Student Borrower Protection Center.

“The federal government hasn’t just walked away from the fight on behalf of borrowers, it is actually arming the other side,” Frotman said in a statement. “The Student Borrower Protection Center is here to fight back — in state capitals, in Congress, in court, and in communities across the country.”

Roughly 44 million Americans have some sort of student loan outstanding, with an average amount of debt around $30,000.

Frotman hopes his new organization will be able to step in and help state and local authorities where enforcement at the federal level has been scaled back under President Donald Trump. The organization is partnering with the University of California, Irvine to publish new research on the issue of student loans.

For example, five states are suing Navient, one of the nation’s largest student loan servicing companies, alleging the company steered borrowers into higher cost repayment plans. Navient denies those allegations, but an AP investigation found that the Department of Education had evidence that the states’ lawsuits against Navient may have merit and chose to withhold that report from authorities.