Consumer Financial Protection Bureau sued on behalf of student loan borrowers News
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Consumer Financial Protection Bureau sued on behalf of student loan borrowers

Student Debt Crisis, a nonprofit organization, initiated a lawsuit against US Secretary of Education Betsy DeVos and Kathy Kraninger, the director of the Consumer Financial Protection Bureau (CFPB) Monday. The complaint states that DeVos and Kraninger manipulated federal policy requiring the supervision of loan services by the federal government. The CFPB also claimed to only have responsibility over private student loan supervision, displacing their authority of 80 percent of the country’s student loan debt.

According to the complaint, “In September 2018, then-Acting CFPB Director Mick Mulvaney announced the New Supervision Rule and stated publicly that Dodd-Frank limited the CFPB’s supervisory authority to private student loans and that the CFPB would not be responsible for issues related to servicing federal student loans.”

The lack of supervision has led to multiple allegations of student loan abuses from various companies. This specifically impacts those who work within public service, and have relied upon the federal student loan forgiveness program.