Biden administration taps Warren ally to lead Office of Federal Student Aid, a promising sign for efforts to wipe out student debt

  • Richard Cordray, former head of the CFPB, is set to become the head of the Office of Federal Student Aid.
  • Cordray will be tasked with figuring out how to address the $1.6 trillion of student debt owed by at least 42 million Americans.
  • Cordray is a longtime political ally of Sen. Elizabeth Warren.
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The US Department of Education announced that Richard Cordray, the former director of the Consumer Financial Protection Bureau, was selected to head the Office of Federal Student Aid.

“It is critical that students and student loan borrowers can depend on the Department of Education for help paying for college, support in repaying loans, and strong oversight of postsecondary institutions,” US Secretary of Education Miguel Cardona said in a statement. “Cordray has a strong track record as a dedicated public servant who can tackle big challenges and get results.”

The move signals a shift in federal student loan policy, and a potential embrace of loan cancellation policies, Politico points out, as Cordray is a longtime political ally of Sen. Elizabeth Warren. Cordray also served as attorney general of Ohio and unsuccessfully ran for governor of Ohio in 2018.

Of Cordray’s appointment, which she pushed for, Warren said: “I’m very glad he will get to apply his fearlessness and expertise to protecting student loan borrowers and bringing much needed accountability to the federal student loan program.”

The Republican response to the appointment was mixed, Politico pointed out, with some embracing him as a good pick. Others, like Rep. Virginia Foxx of North Carolina, the ranking member on the House Education and Labor Committee, expressed skepticism, in a statement to CNN, that he “has the capability and serious character required to carry out the duties of COO of FSA.”

Cordray, who starts on Tuesday, fills the position after Mark Brown, a pick from the Trump administration with a year left to serve, resigned earlier this year after pressure from progressives.

As the head of the Office of Federal Student Aid, Cordray would be tasked with figuring out how to address the $1.6 trillion of student debt owed by more than 42 million Americans. He would also be charged with figuring out what happens after student debt repayment and interest accrual has been paused for over a year during the pandemic – set to resume in September.

In prior positions, Cordray has pushed the Education Department to reform its student lending systems and has called for more oversight on student loan servicing companies.

The announcement lines up with continued progressive pressure on the Biden administration to cancel student debt.

Cordray is primed to push for regulation of the student loan servicing industry as well as the for-profit university system under Cardona.

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NYSE president Stacey Cunningham says the stock market is not a casino – and exchange officials have not been asked to testify at the upcoming GameStop hearing

Stacey Cunningham, First Female President of the NYSE
Stacey Cunningham.

  • The NYSE’s president told Axios stock markets are not a casino, and they are highly regulated.
  • NYSE officials have not been called to testify at GameStop’s House hearing, Stacey Cunningham said.
  • Rules on transparency around short positions held by hedge funds should be reviewed, she said.
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NYSE president Stacey Cunningham told Axios in a recent interview that investing in the stock market does not resemble gambling. 

“The markets are not a casino,” she told Axios’ Dan Primack. “They are highly regulated and they’re highly overseen. We are running a market that provides opportunities for investors to come in, invest in the companies they believe in, they believe that are gonna grow, and then share in that wealth creation.”

Senator Elizabeth Warren last month slammed hedge funds and investors who criticized traders driving up GameStop for treating the stock market like a casino.

Cunningham disagreed with the sentiment, and said that what makes America so great is that “dreamers and entrepreneurs” with an idea can grow their business by getting others to invest via the stock market and share in the success.

Read More: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

The CEOs of Robinhood, Reddit, hedge fund Citadel, and investment-management firm Melvin Capital are expected to testify as part of a House hearing on the GameStop saga this Thursday, along with YouTube streamer Roaring Kitty.

Cunningham said NYSE officials have not been summoned to testify at the hearing, even though GameStop, AMC and other so-called “meme-stocks” trade on the exchange. “This is not really so much a New York Stock Exchange issue,” she said.

However, she believes regulators should review transparency requirements around short positions held by hedge funds. 

Read More: Canadian regulators just approved the world’s first Bitcoin ETF. Here are the 5 things investors need to know about the outlook for a US version

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