Early in the summer of 2015 Rohit Chopra announced he would be stepping down from his role as Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB). In an email to the Washington Post, CFPB Director Cordray credited Chopra with “…shin[ing] a spotlight on the problems facing millions of student loan borrowers as well as the broader impact of their struggle on our economy. His work is respected among policymakers, advocates, and industry.”
At the time, he declined to say where he was going. While he has since been working at liberal think tank, the Center for American Progress, it seems Chopra has now landed on a much bigger student loan stage; on Monday he started a new job at the Department of Education.
During his tenure at the CFPB Chopra was critical of schools, banks, and servicers in their handling of loans and lack of transparency with borrowers.
Among other findings, his last report while at the Bureau found that companies rejected 90 percent of consumers who applied for co-signer release. The report was based on analysis of approximately 3,100 private student loan complaints and 1,100 debt collection complaints related to student loan debt received between October 1, 2014 and March 31, 2015.
In August the Huffington Post quoted Chopra as saying “When borrowers reach out for help, student loan servicers need to own up to borrowers and tell them the truth about their options, rather than steering them into a plan that gets them off the phone quickly,” adding that “most of these defaults could have been avoided if servicers enrolled borrowers in affordable repayment plans.”
In an email to employees Wednesday Under Secretary of Education Ted Mitchell announced that Chopra would be working on a range of issues related to “enhanced protections for students, improved borrowers’ service and strong accountability for institutions. Rohit’s experience in protecting borrowers and his expertise in financial services policy will advance and deepen that work.”
At the end of the day, Chopra’s role at the CFPB only allowed him to directly affect the realm of private student loans. While significant, this world represents only a fraction of the market when compared with the massive federal student loan portfolio managed by the Department of Education.
In a time of great upheaval surrounding the Department of Education private collection agency contract, it will be interesting to see what effect, if any, Chopra’s appointment will have.
His statement that “most of these defaults could have been avoided if servicers enrolled borrowers in affordable repayment plans” is interesting. Perhaps he will dig into the challenges of actually getting borrowers on the phone in the first place to discuss these repayment plans. And perhaps we will learn his position on the recently passed legislation that will allow those pursuing debts owed to the government to be able to call cell phones using an autodialer.