A group of Democratic lawmakers has rebuked Kathy Kraninger, director of the Consumer Financial Protection Bureau, in a letter.
Senators Bob Menendez (D-N.J.), Sherrod Brown (D-Ohio), Jack Reed (D-R.I.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Catherine Cortez Masto (D-Nev.), Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) criticized Kraninger over her handling of student loan servicers. The group told her that after two years of “widespread reports of mistakes and mismanagement by federal student loan servicers, it is time that you accept responsibility, stand up to Secretary DeVos, and do your job.”
Kraninger has drawn acute criticism after it was recently revealed that less than 1 percent of applicants to a federal student loan forgiveness program had been approved. Implemented in 2007, the Public Service Loan Forgiveness program promised loan forgiveness to certain student loans who made 10 years of on-time monthly payments while working in public service. Actual approval rates are miniscule.
More than 20 Democratic senators called for an investigation of PSLF in October after others asked for information on the CFPB’s monitoring of the student loan industry earlier this year.
“While you did not create this situation, you have allowed it to fester,” the senators wrote. “In the one year since you became director, you have failed to confront the Department, seek a court order, or take any other measure to ensure the bureau has access to the student loan information so that it can resume examinations of student loan servicers’ handling of federally owned loans.”
Kraninger should take “immediate action to resume examinations of student loan servicers’ handling of loans owned by the federal government,” the senators wrote.
Americans collectively owe $1.5 trillion in student loans, making it the second largest industry the CFPB regulates after mortgages.