The government’s top official overseeing the $1.5 trillion student loan market resigned in protest on Monday. Seth Frotman will be stepping down as student loan ombudsman at the end of the week. According to his resignation letter which was obtained by The Associated Press. He held that position since 2016, but has been with Consumer Financial Protection Bureau since its inception in 2011.
Frotman is the latest high-level departure from the CFPB since Mick Mulvaney, President Donald Trump’s budget director, took over in late November. But Frotman’s departure is especially noteworthy, since his non-partisan office is one of the few parts of the U.S. government that was tasked with handling student loan issues.
The office was at the center of the lawsuits against for-profit colleges like Corinthian Colleges and is currently heading up a lawsuit between the CFPB and Navient, one of the nation’s largest student lenders. The Navient lawsuit has been mired in bureaucratic red tape as the Department of Education, headed by Betsy DeVos, has been unwilling to help the CFPB with their lawsuit . Since its creation, the student loan office has returned $750 million to harmed borrowers.
“You have used the bureau to serve the wishes of the most powerful financial companies in America,” Frotman wrote, addressing his letter to Mulvaney. “The damage you have done to the bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country.”
“Seth Frotman is a public servant who treated every student loan complaint with the seriousness it deserved,” said Debbie Goldstein, executive vice president at the Center for Responsible Lending. “His departure raises concerns about the priorities of Mulvaney and CFPB leadership and whether they are fulfilling the mission of the CFPB to focus on protecting consumers from financial abuse.”
In a statement, a CFPB spokesman said it does not “comment on specific personnel matters” but also said “we hope that all of our departing employees find fulfillment in other pursuits and we thank them for their service.”