Obama’s CPFB director allegedly sold out student borrowers

Exactly. The student debt system we have in this country feeds the universities and their bloated administrations (in many cases) while students who fear missing out on a college degree go deeper and deeper into debt to meet increased tuitions. Then as more money flows into the universities the universities then again raise tuitions. The students must then take on more debt. Rinse and repeat.

But it’s not just universities that are cashing in.

(From RealClearEducation)

Obama’s Consumer Financial Protection Bureau (CFPB) has long been criticized as unaccountable and unconstitutional — not just by conservative pundits but also by federal judges. One of CFPB’s most questionable overreaches is a corrupt bargain regarding student debt with National Collegiate Student Loan Trusts (NCSLT).

Before he left CFPB, Director Richard Cordray made a “consent agreement” with Vantage Capital Group’s Donald Uderitz to make him the de facto administrator of NCSLT’s massive student debt assets. In the name of stopping “unjust” collection practices, this consent agreement made Uderitz the judge, jury, and executioner. He now has the power to collect on loans as he sees fit.

Giving a guy like Uderitz this kind of blank check is basically handing him … a blank check…

…The term “extra-judicial” may sound nice and formal, but actually it just means, “We don’t have to follow any rules.” Uderitz now has the power to collect however he wants, for instance by saddling students with servicing and collection fees while reducing his fund’s own tax liability exposures. Uderitz and his VCG will make a ton of money on the backs of already indebted students.(Avoiding this kind of thing is precisely why some people use debt consolidation services.)

The student loan system stinks. Obama made it worse. And the CFPB, sold as a protector of consumers, yet again shows its crony face.