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Richard Cordray speaks into a microphone

Richard Cordray has led the Office of Federal Student Aid since May 2021. His three-year appointment is up this week.

Photo by Ricky Carioti/The Washington Post via Getty Images

Richard Cordray, the chief operating officer of the Office of Federal Student Aid and top student loan official in the Biden administration, is stepping down.

Cordray has faced mounting criticism from Congressional Republicans and the higher education community over his agency’s rollout of the new Free Application for Federal Student Aid (FASFA), which has been beset by a raft of delays and technical errors that have frustrated college financial aid offices and hampered college access for underserved students.

“Mr. Cordray, don’t let the door hit you on the way out,” Representative Virginia Foxx, the North Carolina Republican who chairs the House Education and Workforce Committee, said in a statement.

Cordray’s three-year appointment ends in early May, and he decided not to continue for another term, according to a department official. He will remain in leadership until June “in order to oversee the completion of key priorities within the organization,” the Education Department said in a news release late Friday morning.

“This is an obvious step and a strong signal from the department that they know things went wrong with the FAFSA and are taking it seriously,” said Brett Schraeder, managing director of financial aid at the education consulting firm EAB and an early critic of the FAFSA rollout.

But for those hoping to close out a difficult financial aid year on stable footing, the timing of Cordray’s resignation couldn’t be worse.

Wednesday is May 1, the traditional commitment deadline for most colleges—though many have pushed back their deadlines to adjust for the FAFSA delays. Students are still struggling to fill out the form thanks to general confusion and a slew of technical glitches, and colleges are still waiting for hundreds of thousands of Institutional Student Information Records to package their aid offers, thanks to a series of processing errors.

“I was surprised, and I think many people were, by the timing of this. We’re not out of the woods yet,” said Jon Fansmith, senior vice president of government relations and national engagement at the American Council on Education. “Even if you're very frustrated with the performance of the department or FSA [Federal Student Aid], I don’t know that a lot of people see a leadership transition right now as the way to smooth things out.”

In addition to FAFSA, Cordray's agency is charged with executing 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 an earlier plan for student loan forgiveness. This latest plan, which could benefit 26 million Americans, is slated to roll out this fall. That means the administration will have to work quickly to find a replacement for Cordray, advocates for student loan forgiveness say.

“The president depends on the person in this job to do it on 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 FSA. He is the third person in seven years to serve as the agency’s COO.

In a note announcing his resignation, Cordray highlighted some of his successes as FSA chief, including granting student loan forgiveness to more than 4 million borrowers and holding institutions accountable for exploiting and defrauding students.

He also mentioned making it “easier for people to apply for and manage federal student aid,” an apparent reference to the new FAFSA. Though the form itself is meant to be simpler and its new Student Aid Index calculations will surely expand eligibility for federal aid, many would take issue with that characterization of the new form’s rocky first year: FAFSA completion rates are down by 29 percent as of April 19, according to data from the National College Attainment Network.

Education Secretary Miguel Cardona praised Cordray’s leadership of the agency as “consequential” in a statement.

Cordray “accomplished more transformational changes to the student aid system than any of his predecessors,” Cardona said. He credited Cordray for overhauling the Public Service Loan Forgiveness and income-driven repayment programs, restarting student loan payments for millions of borrowers, and revitalizing the FSA Enforcement Unit to hold institutions accountable.

“It’s no exaggeration to say that Rich helped change millions of lives for the better,” Cardona wrote.

Neither Cardona nor Cordray’s statements mentioned the FAFSA by name.

The Fall Guy

The Education Department has been under fire for months over the chaotic FAFSA rollout. Congressional Republicans have promised to hold the department accountable for delays and missteps, and the Government Accountability Office has opened multiple investigations into the project. Recently, some Senate Republicans urged the department’s inspector general to take a closer look at the planning and staffing decisions involved with the overhaul—and whether resources needed for FAFSA were routed toward debt relief programs. As Cordray’s defenders have noted, Congress mandated the changes to the form but didn’t provide additional funding to make it happen.

In hearings on the Hill earlier this month, Cordray emerged as the primary target of congressional Republicans’ ire over the bungled launch. Student aid advocates who testified at those hearings did not shy away from casting blame, either.

“If there was a financial aid director or college president who delayed financial aid for six months on their campus, the professional price that would be paid would be pretty steep,” Justin Draeger, president of the National Association of Student Financial Aid Administrators, told lawmakers.

NASFAA declined to comment on Cordray’s departure as did Virginia representative Bobby Scott, the top Democrat on the House Education and Workforce Committee. Foxx, Scott’s Republican counterpart on the committee, was more eager to weigh in.

“Cordray will be remembered for his ineffective leadership, blatant partisanship, and his failures regarding FAFSA rollout and return to repayment,” Foxx said in her statement. “The Department of Education’s Office of Federal Student Aid needs a leader that students, families, and institutions can rely on to put politics aside and faithfully administer the law.”

But criticism of Cordray is not defined by partisan divides.

“This is not just about congressional calls for accountability; it is about accountability, period,” Fansmith said. “With a problem of this magnitude, the person in charge ultimately is going to be held responsible.”’

Pierce said that Cordray inherited a broken student loan system. For being dealt such a bad hand, he said, Cordray played it well.

“It’s a hard job,” Pierce said. “He served his term. I don’t know if he was ever on the hook for another term.”

A Tainted Legacy

Cordray has had a long career in Democratic politics. He served in the Ohio state house in the early 1990s and later as the state’s attorney general. He was the first director of the Consumer Finance Protection Bureau when it was formed under the Obama administration. After tangling with congressional Republicans who wanted to shut down the agency, he left the post in 2017 to run, unsuccessfully, as the Democratic nominee for Ohio governor.

When he was appointed FSA chief in 2021, the news was greeted with enthusiasm from debt-relief advocates. But Cordray’s legacy is sure to be colored largely by the FAFSA fiasco.

“It’s probably not fair to him that this will be the defining act of his tenure … loan forgiveness would have been the thing people talked about, which would have been huge and significant,” Fansmith said. “But this is probably the biggest financial aid disaster in decades, if not of all time. It’s very hard to walk away from that without forever being associated with it.”

Cordray may not be the only player to face the heat over FAFSA as the dust settles. Contractors working with the department—namely General Dynamic Information Technologies, which received a $121 million contract to help with the technical system overhaul—could be next on the hook for accountability.

Pierce said Cordray was failed by those contractors, and is now paying the price for their mistakes. Mark Kantrowitz, a financial aid expert and consultant who has worked on FAFSA overhauls in the past, agreed that General Dynamic and other contractors bear responsibility for the delays and errors that disrupted the rollout.

“Everyone is pointing fingers. But what I’ve been hearing is, the contractor missed deadlines and frequently made mistakes all along the way,” Kantrowitz said. “There should be some sort of penalty for them, too.”

But while Kantrowitz said Cordray was obviously a “sacrifice” for the embattled department, he believes his political priorities and lack of student-aid experience waylaid the new form.

“If FSA had gotten the actual overhaul done seven months earlier, we wouldn’t be in this mess right now,” he said. “But they were in denial about how big a deal this was. They kept on painting everything with rose-colored glasses when it was clear there was a problem.”

Cordray’s replacement will have to lead the agency through the difficult task of readying the FAFSA for its planned October relaunch this fall—and help colleges that normally would have already begun preparing for the next applicant cycle play catch-up.

“I hope they get someone who is operationally good and politically savvy in the role, because I don’t think this is over in June,” Schraeder said. “I think everyone’s waiting with bated breath for the next steps.”

This story has been updated.

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