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Posted: 2018-12-04 14:38:16

November 28, 2018; Inquirer

The nation’s total student debt is now second only to its home mortgage debt at $1.53 trillion. Audits of the Student Loan Forgiveness Program and one of the largest loan servicers, Navient, have revealed widespread systemic problems, leaving borrowers with issues little recourse other than lawsuits. A new nonprofit has been created to put on a superhero cape and advocate for those students, to stand up to the massive nexus of student loan makers.

The Student Borrower Protection Center (SBPC), with a startup grant from the Sandler Foundation, will be encouraging lawmakers at the state and city level to strengthen enforcement against the companies that serve the loans, debt collectors, and the for-profit schools that encourage students to take the loans in the first place.

SBPC has a distinct advantage in that its founders are insiders—former Consumer Financial Protection Bureau (CFPB) employees who were in charge of student loan oversight. Seth Frotman was the ombudsman who resigned in August in a letter to acting director Mick Mulvaney, stating, “Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.” In his letter, Frotman added that, “American families need an independent consumer bureau to look out for them when lenders push products they know cannot be repaid, when banks and debt collectors conspire to abuse the courts and force families out of their homes, and when student loan companies are allowed to drive millions of Americans to financial ruin with impunity.”

Now, Frotman is leading the charge to form a nonprofit to achieve those objectives. Joining Frotman in the new nonprofit are Mike Pierce, a deputy assistant director, along with a policy analyst, Bonnie Latreille.

The director of the student borrower project at the National Consumer Law Center, Persis

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