The Elizabeth Warren ally just picked to oversee US student loans could help make her debt-cancelation dream come true

Elizabeth Warren
Sen. Elizabeth Warren (D-MA).

  • Former CFPB head Richard Cordray will lead the Federal Student Aid office, which oversees student debt.
  • Elizabeth Warren helped create the CFPB and was key in nominating Cordray when she couldn’t helm the agency.
  • Warren wants to cancel $50,000 in student debt per person and Cordray has shared her agenda for much of his political career.
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Since she was elected to the Senate almost a decade ago, Elizabeth Warren has been fighting to cancel student debt and hold loan servicers accountable. Now one of her closest allies is in charge of the federal student debt pile, and that could be a big deal.

Richard Cordray, the former head of the Consumer Financial Protection Bureau (CFPB), was selected to head the Education Department’s Office of Federal Student Aid (FSA) on Monday. Few people in Washington DC are better placed to carry out Warren’s vision of mass student-debt relief. That’s because Cordray took the job Democrats wanted Warren to have.

When Warren was a Harvard professor (and occasional blogger), she frequently cited problems within the student-loan system and the need to create something like the CFPB, which would protect consumers financially and ensures they are being treated fairly. That turned into a new federal agency created under President Barack Obama, who wanted Warren to lead it, but in 2011, Senate Republicans blocked her appointment. She ran for Senate instead, becoming a national figure, while Cordray became a close ally as the first head of the CFPB.

During her time in the Senate, Warren worked with Cordray’s bureau to conduct investigations into predatory lending practices. Now as head of the FSA, Cordray will be tasked with overseeing the government’s $1.5 trillion student loan portfolio through disbursing loans and grants, along with monitoring student-loan servicers and implementing relief and repayment programs.

@RichCordray was a fearless @CFPB leader who forced big financial institutions to return $12 billion to people they cheated,” Warren wrote on Twitter on Monday. “I’m very glad he’ll be protecting student borrowers and bringing much-needed accountability to the federal student loan program.”

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Richard Cordray.

What Cordray could do on student debt

In a statement after his appointment was announced, Cordray said he was looking forward to creating “more pathways for students to graduate and get ahead, not be burdened by insurmountable debt.”

He will be tasked with sorting through claims from thousands of defrauded borrowers who filed for debt relief, along with ensuring the smooth implementation of loan collections once the pause on student loan payments through September is lifted – although Cardona said on Monday that extending the payment pause is “not out of the question.

While Cordray has not yet commented on wiping out $50,000 in student debt for each borrower, which Democrats continue to call for, he told MarketWatch last year that under the Biden administration, he expected the CFPB and the Education Department to work more closely on student-loan issues.

At the CFPB during the Obama years, Cordray made oversight of student loan servicers his priority. The agency has returned more than $75o million to student loan borrowers since 2011 over debt collection complaints, and in early 2017, the bureau sued Navient, the largest student loan servicer in the US, in a lawsuit that is still ongoing, arguing that Navient misled students into taking on loans they cannot pay off.

At a late April hearing, Warren called for the government to fire Navient, and for Navient to fire its chief executive officer, after accusing Navient for over a decade of abusing the student loan system.

In 2019, Cordray wrote a guest essay in The Plain Dealer, an Ohio newspaper, speaking out against for-profit colleges. “I hate how these hollowed-out businesses and subpar colleges are cheating consumers, employees and whole communities,” Cordray wrote.

Education Secretary Miguel Cardona has already canceled some debt for borrowers defrauded by for-profit schools, and Warren has conducted numerous investigations into the failures of the for-profits Corinthian Colleges and ITT Technical Institutes.

The FSA head’s seat has been vacant since March, when Mark Brown, former head of the office appointed by Education Secretary Betsy DeVos in 2019, resigned amid pressure from labor groups and lawmakers. Warren wrote in a tweet that his resignation was “good for student borrowers.”

Cordray told Marketwatch in November that, as CFPB head, his approach with the Education Department had been one of “close cooperation” but “that was all nixed when Betsy DeVos came into office.” Speaking of the outlook for a Biden administration, he said he thought the CFPB and Education Department would likely go back to working closely together.

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Senate Republicans to discuss repealing ban on earmarks, key tactic for passing difficult legislation

Mitt Romney
Sen. Mitt Romney (R-UT).

  • The Senate GOP will meet next week to decide on bringing earmarks, funding members can use for their districts, back.
  • This follows House Republicans approving the restoration of earmarks in March.
  • Some GOP Senators opposed bringing earmarks back because of past abuses with the funding measure.
  • See more stories on Insider’s business page.

Almost a month after House Republicans voted to approve the restoration of earmarks, Senate Republicans are expected to meet next week to discuss bringing back the so-called community funding measures.

A decade ago, Republicans banned earmarks, which allow members to put funding for their districts in a larger bill, following a series of scandals related to earmark abuses. But now, both House Democrats and House Republicans have voted to bring them back, and Senate Republicans are set to meet next Wednesday to ratify their rules and discuss earmark usage, according to Bloomberg.

As some moderate Democrats, notably Sen. Joe Manchin of West Virginia, stress the importance of bipartisan legislation, earmarks could be an important tactic for easing difficult legislation through congress on bipartisan lines.

Republican Sen. Richard Shelby of Alabama told The Hill on Tuesday that Democrats are already going forward with restoring earmarks, so he thinks “the decision is headed toward letting every member decide if they want to participate in the earmark process.”

On March 2, House Democrats introduced new guidelines for earmarks to bring them back while increasing transparency and requiring members to verify they have no financial interest in the funding requests, among other things.

On March 17, House Republicans voted by secret ballot to bring earmarks back as well. House Minority Leader Kevin McCarthy said after the vote that there was “real concern” about solely the Biden administration directing where money goes.

“This doesn’t add one more dollar,” McCarthy said. “I think members here know what’s most important about what’s going on in their district, not Biden.”

However, some Senate Republicans did not feel the same. Sen. Mitt Romney of Utah told reporters after the vote that earmarks “are not the right way to go.”

“They have been associated with excess, and it would represent a turn to the worst,” he said.

The ban on earmarks once had bipartisan support, as a series of scandals led to former President Barack Obama saying in 2011 that he would veto any bill containing earmarks.

A defining earmark scandal occurred in 2005, when Alaska Rep. Don Young secured $233 million for a bridge that would connect two small cities, which became known as the “bridge to nowhere,” as critics said the bridge would not significantly benefit Young’s community. The same year, former California Rep. Duke Cunningham landed himself eight years in prison for accepting $2.4 million in bribes in return for promising earmarks to defense contractors.

As recently as March 1, a group of 10 Republican senators, led by Sens. Marco Rubio of Florida and Steve Daines of Montana, introduced a bill to permanently ban earmarks. Rubio said in a statement that earmarks had led to “corruption and waste, and bought votes in Congress for unpopular legislation.”

Although Republican lawmakers have largely opposed President Joe Biden’s infrastructure plan thus far, bringing earmarks back could help pass difficult legislation as it allows lawmakers to include funding for their specific districts in bills.

The House is already using earmarks again, and the Transportation and Infrastructure Committee is accepting member requests for community funding through April 23 .

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Biden says his inauguration will be a ‘more imaginative’ virtual event, in contrast to Trump’s emphasis on large crowds

Biden transition
President-elect Joe Biden speaks to the media after receiving a briefing from the transition COVID-19 advisory board.

  • President-elect Joe Biden said Friday he expects his January 20 inauguration to be a “more imaginative” virtual event, much like the 2020 DNC. 
  • “It is highly unlikely that there will be a million people on the mall, going all the way down to the [Lincoln] Memorial,” Biden said.
  • Biden is taking a starkly different approach to President Trump, who began his term in 2017 by arguing about the number of spectators at his inauguration.

President-elect Joe Biden on Friday said he expects his inauguration to be mostly virtual, although he’ll still plan to take the oath of office on the steps of the US Capitol. 

Although Biden said plans for the January 20 ceremony aren’t complete, he expects it to be a “more imaginative” event than previous inaugurations. He said it may be similar to the 2020 Democratic National Convention, an all-online event that broadcast lawmakers and citizens from around the country due to the COVID-19 pandemic.

“It is highly unlikely that there will be a million people on the mall, going all the way down to the [Lincoln] Memorial,” Biden said on Friday. “My guess is that there will not be a gigantic inaugural parade down Pennsylvania Avenue, but my guess is you’ll see a lot of virtual activity in states all across America, engaging even more people than before.”

Asking crowds to stay home instead of flooding the National Mall would separate Biden from his predecessor, President Donald Trump, who began his term by arguing about the size of his crowds. He said about 1.5 million well-wishers had come to cheer him on, but the media reported far fewer.

Trump inauguration
President Donald Trump delivering his inaugural address.

In non-pandemic years, crowds typically gather along the grassy stretch of parkland between the US Capitol and the Lincoln Memorial. In the days after Trump’s 2017 ceremony, his office argued about the size of his crowd, which most estimates put at smaller than former President Barack Obama’s 2009 crowd.

“This was the largest audience to ever witness an inauguration, period, both in-person and around the globe,” former press secretary Sean Spicer said at the time, although photos taken of the National Mall appeared to tell a different story.

During his re-election campaign, Trump repeatedly criticized Biden for not drawing big enough crowds at his rallies. In November, Obama tore into Trump at a Biden campaign event, saying Trump had an “obsession” with crowd size.

“What is his obsession, by the way, with crowd size?” Obama said. “This is the one measure he has of success. He’s still worrying about his inauguration crowd being smaller than mine.”

Trump also has not said whether he plans to participate in the 2021 inauguration ceremony. Outgoing presidents typically great incoming ones at the White House on inauguration day. 

Biden said on Friday that his team hadn’t finalized plans for January 20. “But the key is keeping people safe,” he said.

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