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Meet the Man Now at the Center of the Debate Over Student Debt

Mr. Cordray made student loan oversight one of the bureau’s priorities, and in early 2017 — two days before Mr. Trump took office — the agency sued Navient, one of the Education Department’s largest student loan servicers, for errors and omissions that Mr. Cordray said improperly added billions of dollars to borrowers’ tabs.

The lawsuit is ongoing, and six state attorneys general have filed similar cases. A spokesman for Navient, Paul Hartwick, described the allegations as “unfounded” and said the company assisted students by helping them navigate the complex student loan program.

Mr. Cordray has described the country’s soaring student loan debt — which eclipses all consumer debt other than mortgages — and the often slipshod way it is managed as a problem ripe for government intervention. “The domino effects of student debt burdens and loan servicing problems are holding back the upcoming generation and hampering the economy,” Mr. Cordray wrote in his 2020 book, “Watchdog.”

The Education Department is the primary lender for Americans who borrow to pay for higher education. It directly owns loans made to nearly 43 million people, totaling $1.4 trillion.

In one of the government’s most sweeping relief measures of the coronavirus pandemic, the department decided in March 2020 to allow borrowers to stop making payments on their federal student loans, temporarily setting the interest rate to zero percent. That pause is scheduled to continue through September.

Because of that freeze, fewer than 1 percent of borrowers with federal loans are currently making payments on them. Restarting loan collections will be one of the biggest challenges facing the Education Department this year.

But Mr. Cordray will inherit a plethora of other problems, including extensive errors and obstacles in the department’s Public Service Loan Forgiveness program, which is intended to forgive the debts of teachers, military members, nonprofit workers and others in public-service careers.

The department is also grappling with claims from hundreds of thousands of borrowers seeking relief through a program intended to eliminate the debts of people who were defrauded by schools that broke consumer protection laws.

Susan C. Beachy contributed research.

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