The head of the Federal Student Aid office, which has faced criticism for the botched rollout of this year’s college financial aid form, will be stepping down.
According to a letter to staff obtained by CNN, Richard Cordray said Friday that he will not be continuing in his role for another three-year term. He has served as the chief operating officer of FSA in the Department of Education since May 4, 2021, and will stay on through June to help with the transition.
The announcement of Cordray’s departure comes as his office has been under fire for problems with a new version of the Free Application for Federal Student Aid, or FAFSA, released late last year. Delays and technical glitches have kept millions of students waiting to hear how much college will cost them this fall and have raised concerns that some low-income students won’t enroll at all.
Earlier this month, Cordray became a focus of a hearing held by the House Committee on Education and the Workforce about the FAFSA rollout.
“If there was a financial aid director, or even a college president, that delayed financial aid on their campus for up to six months, the professional price that would be paid for that would be pretty steep,” Justin Draeger, president of the National Association of Student Financial Aid Administrators, told lawmakers.
The committee, led by Republican Rep. Virginia Foxx of North Carolina, later posted to X that “It’s time for Richard Cordray to go.”
In a statement Friday, Education Secretary Miguel Cardona applauded Cordray’s work to make improvements to the student loan program, administering a record amount of student debt forgiveness and holding schools that defrauded students accountable —but did not mention the FAFSA overhaul.
“We are grateful for Rich Cordray’s three years of service, in which he accomplished more transformational changes to the student aid system than any of his predecessors,” Cardona said.
“It’s no exaggeration to say that Rich helped change millions of lives for the better,” he added.
Previously, Cordray was the first director of the Consumer Financial Protection Bureau, which launched during the Obama administration. Before that, he served as Ohio’s attorney general and was the Democratic nominee for governor of Ohio in 2018.
“Over my tenure, we provided student loan forgiveness to more than 4,000,000 borrowers and their families; made it easier for people to apply for and manage federal student aid; and took strong actions to hold schools accountable for defrauding students,” Cordray said in a statement sent to CNN.
The congressionally mandated overhaul of the FAFSA was authorized through two different pieces of legislation passed in 2019 and 2020. The changes were long overdue and are meant to simplify the form and to make more low-income students eligible for federal student aid such as Pell grants.
While the new version of the form is much shorter, the rollout has been plagued by problems that have created major delays for students planning to go to college this fall.
First, the form wasn’t available until the very end of December — about three months later than usual — and was offline for many hours of the day during the first week of January.
Since then, many families and students have experienced problems and glitches when submitting the form. FAFSA completions among high school seniors are currently down 36% compared with the prior class, according to the National College Attainment Network.
Further problems on the back end and a last-minute change to the aid calculation meant that colleges did not receive any FAFSA information until March, even if a student submitted the form back in January. Once colleges received the data from the Department of Education, there were errors with some of the information, and many forms must be reprocessed.
As a result, many financial aid applicants are still waiting to hear how much college will cost them next year, even as the typical May 1 college decision deadline approaches.
The Biden administration has said that the overhaul of the FAFSA was a huge undertaking — one that not only transformed the form itself, but also the calculations and back-end processing system — and that its requests for more funding from Congress were not met.
But Republicans have argued that the Department of Education was too focused on implementing Biden’s student loan forgiveness policies and let the FAFSA work fall to the wayside.
The Department of Education has been facing criticism from lawmakers on both sides of the aisle for the delays, and the Government Accountability Office has started an investigation into the new form’s implementation.
As the head of FSA, Cordray oversaw not only the FAFSA but also the entire $1.6 trillion federal student loan system.
During Cordray’s tenure, the Department of Education authorized the cancellation of about $153 billion in federal student loan debt for 4 million borrowers. FSA tackled a backlog of debt relief applications, which built up during the Trump administration, from borrowers who said they were defrauded by their for-profit colleges. The office also expanded the Public Service Loan Forgiveness program and streamlined debt cancellation for permanently disabled borrowers.
Last year, the FSA launched a new income-driven repayment plan, known as SAVE (Saving on a Valuable Education), which offers generous terms for low-income student loan borrowers.
Cordray also oversaw the unprecedented return to repayment after the three-plus-year pandemic pause ended last year.
When the Biden administration tapped Cordray to run FSA, it was viewed as a win for progressives.
During Cordray’s tenure at the Consumer Financial Protection Bureau — an agency spearheaded by Massachusetts Sen. Elizabeth Warren — he made it a priority to protect student loan borrowers. The agency secured more than $480 million in debt forgiveness for borrowers who had taken out loans to go to Corinthian Colleges, a now-defunct, for-profit school. It also sued Navient, one of the biggest federal student loan servicers, for allegedly processing payments incorrectly. Navient has denied the allegations, and the lawsuit is ongoing.
“I’m grateful to Rich for his commitment to building a country that doesn’t just work for the wealthy and well connected, but for all Americans,” Warren said in a statement sent to CNN on Friday.
