Washington, D.C. – Today, President Obama is taking a bold step to protect student consumers from financial tricks and traps by announcing a recess appointment of his well-qualified nominee, Richard Cordray, to head the new Consumer Financial Protection Bureau. The CFPB can improve private student loans as well as credit cards and debit cards issued on campus.
“Every year, students graduate owing tens of thousands of dollars before they've even earned their first paycheck. The Consumer Financial Protection Bureau can set rules of the game to rein in the worst abuses in the campus marketplace, and ultimately to drive down the cost of college,” said Rich Williams, Higher Education Advocate for WISPIRG Students. “We applaud President Obama for standing up to Wall Street and its backers on Capitol Hill on behalf of students in need of protection from unfair financial practices.”
The average student now graduates with over $25,000 in federal student loan debt. Hundreds of thousands of students also assume expensive private student loans before exhausting more consumer friendly college financing options. Private student loans pile more debt on students because they provide the worst rates and terms to students with the greatest financial need. In addition, students are targets for high interest, high fee credit cards and debit cards on campus. The appointment bypasses Senate opponents who pledged to block any director unless the bureau was first weakened in a manner approved by Wall Street. The confirmation of a director also grants the bureau all of its new powers under law to act to protect students.
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