Richard Cordray, chief operating officer of the Office of Federal Student Aid and top student loan official in the Biden administration, is resigning.
Cordray has faced fierce criticism from congressional Republicans and the higher education community over his institution's rollout of the new Free Application for Federal Student Aid (FASFA). It hinders underprivileged students from going to college.
“Mr. Cordray, make sure you don’t hit the door on your way out.” Rep. Virginia Foxx, a North Carolina Republican who chairs the House Education and Workforce Committee, said in a statement.
Cordray's three-year term ends in early May and he has decided not to continue in office, according to department officials. The ministry said in a news release late Friday morning that it would retain leadership until June “to oversee the completion of key priorities within the organization.”
“This is a clear action and a strong signal from the department that they know there are problems with the FAFSA and they are taking it seriously,” said Brett Schrader, managing director of financial aid at education consulting firm EAB and an early critic of the FAFSA. FAFSA released.
But for those hoping to end a difficult fiscal year on a stable footing, the timing of Cordray's resignation could not be worse.
Wednesday, May 1, is the traditional pledge deadline for most colleges, but many have postponed the deadline to accommodate FAFSA delays. Students are still having trouble filling out forms due to general confusion and numerous technical glitches, and universities are still waiting for hundreds of thousands of institutional student information records to package their application offers due to a series of processing errors.
“I was surprised, and I think many people were as well by this time. We are not out of the woods yet,” said Jon Fansmith, senior vice president for government relations and state engagement at the American Council on Education. “Even if you feel very disappointed with the performance of the department or the FSA; [Federal Student Aid]“I don’t know if a lot of people are looking at a leadership transition as a way to smooth things out right now.”
In addition to FAFSA, Cordray's agency is tasked with implementing the Biden administration's so-called Plan B for debt relief, which has been in the works since last summer when the Supreme Court struck down a previous plan for student loan forgiveness. This latest plan, which could benefit 26 million Americans, is expected to launch this fall. That means the administration must work quickly to find Cordray's replacement, advocates for student loan forgiveness say.
“The president relies on people doing this job from day one,” said Mike Pierce, executive director of the Student Borrower Protection Center. “Plan B is coming fast and furious.”
Cordray's departure also adds to years of leadership churn at the FSA. He is the third person to serve as COO of the agency in seven years.
In the memo announcing his resignation, Cordray highlighted several of the successes he had as head of the FSA, including canceling student loans for more than 4 million borrowers and holding the agency accountable for student exploitation and fraud.
He also noted that it “makes it easier for people to apply for and manage federal student aid,” an apparent reference to the new FAFSA. While the form itself will be simpler and the new Financial Aid Index calculation will certainly expand eligibility for federal aid, many will take issue with the rough first-year nature of the new form. FAFSA completion rates were down 29% as of April. 19, according to data from the National College Achievement Network.
Education Secretary Miguel Cardona praised Cordray's leadership of the agency as “consequential” in a statement.
Cordray “has made more transformative changes to the student support system than any of his predecessors,” Cardona said. He credited Cordray with overhauling the Public Service Loan Forgiveness and Income-Based Repayment programs, resuming student loan payments for millions of borrowers, and revitalizing the FSA's enforcement division to hold the agency accountable.
“It is no exaggeration to say that Rich has helped change the lives of millions of people for the better,” Cardona wrote.
Neither Cardona nor Cordray's statements mentioned FAFSA by name.
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The Department of Education has been criticized for months for its confusing FAFSA implementation. Congressional Republicans have pledged to hold the department accountable for delays and mistakes, and the Government Accountability Office (GAO) has launched multiple investigations into the project. Recently, some Senate Republicans have called on the department's inspector general to take a closer look at the planning and staffing decisions related to the overhaul and whether the resources needed for the FAFSA have been allocated to the debt relief program. As Cordray's defenders point out, Congress ordered the form change but did not provide additional funding to make it happen.
At a hearing on the Hill earlier this month, Cordray emerged as the main target of Republican lawmakers' anger over the misfire. Student support advocates who testified at the hearing also did not hesitate to criticize.
“If a financial aid director or college president delays financial aid on campus for six months, there will be professional consequences,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “It is,” he said. member of Congress.
NASFAA declined to comment on Cordray's resignation, as did Virginia Rep. Bobby Scott, the top Democrat on the House Education and Labor Committee. Foxx, Scott's Republican on the committee, was even more eager to get involved.
“Cordray will be remembered for his ineffective leadership, blatant partisanship, and failures in the FAFSA rollout and reimbursement,” Foxx said in a statement. “The Department of Education’s Office of Federal Student Aid needs leaders who students, families, and institutions can rely on. So that we can put politics aside and faithfully enforce the law.”
But criticism of Cordray is not defined by partisan divides.
“This is not just about demanding accountability from Congress. It’s about accountability and timeframe,” Fansmith said. “When it comes to problems of this scale, those responsible will ultimately be held accountable.”
Pierce said Cordray inherited a broken student loan system. Having been dealt such a bad hand, Cordray said he made a good play.
“It’s hard work.” Pierce said. “He has completed his term. I don’t know if he was ever in trouble for another term.”
Tainted Legacy
Cordray has had a long career in Democratic politics. He served in the Ohio House of Representatives in the early 1990s and later served as the state's attorney general. He served as the first director of the Consumer Financial Protection Bureau when it was created during the Obama administration. He left the position in 2017 to run as the Democratic candidate for Ohio governor after tangling with Republican lawmakers who wanted to shut down the agency.
When he was appointed FSA commissioner in 2021, debt relief advocates welcomed the news with enthusiasm. But it's certain that Cordray's legacy will be deeply colored by the FAFSA fiasco.
“It's probably unfair of him that this would be the defining act of his term… Loan forgiveness would have been something that people were talking about and that would have been huge and important,” Fansmith said. “But this is probably the biggest financial aid disaster in decades, if not all of time. It’s very difficult to not be associated with it forever and to break away from it.”
As the dust settles, Cordray may not be the only player facing the FAFSA heat. A contractor working with the department, namely General Dynamic Information Technologies, which received a $121 million contract to help overhaul technology systems, could be held liable.
Pierce said Cordray was failed by its contractor and is now paying for their mistake. Mark Kantrowitz, a financial aid expert and consultant who has worked on past FAFSA overhauls, agreed that General Dynamic and other contractors bear responsibility for delays and errors that prevented the rollout.
“Everyone is pointing fingers. But from what I’ve heard, contractors often miss deadlines and make mistakes along the way,” Kantrowitz said. “There should be some kind of punishment for them too.”
But while Kantrowitz said it was clear Cordray was a “sacrifice” to the embattled department, she believes his political priorities and lack of experience supporting students have hindered the new format.
“If the FSA had completed the actual inspection seven months ago, we wouldn’t be in this mess now,” he said. “But they denied how big of a deal this was. “Once it became clear that there was a problem, we continued to paint everything with rose-colored glasses.”
Cordray's successor will have to lead the institution through the difficult task of preparing the FAFSA for its planned October relaunch this fall and help colleges that have typically already begun preparing to catch up with the next applicant cycle.
“I want someone who is operationally good and politically savvy to come into that position,” Schraeder said. Because I don’t think this will end in June,” Schraeder said. “I think everyone is waiting with bated breath for the next step.”
This story has been updated.