As college graduates have their commencement celebrations, they hope their hard work will pay off. After all, the booming Trump economy has record low unemployment. There are countless opportunities for entrepreneurship and success.

There is one reason why those dreams may never get off the ground: crushing school debt. There are more than 44 million borrowers in America who collectively owe $1.5 trillion. Because of these loans, young adults are putting off essential milestones in life. They’re putting off buying a home and getting married. They’re also not accumulating savings.

They have been saddled with debt by a higher education industrial complex. We can thank the Federal Government. Now, thanks to some Obama Administration decisions, the problem might become even worse!

The NCMSLT Trusts

Before his campaign for Governor of Ohio, Richard Cordray was an Obama administration holdover. He was running the Consumer Financial Protection Bureau (CFPB). What we are now learning is Cordray likely exceeded the scope of his authority with a proposed “consent judgment” in September 2017. This was against the National Collegiate Master Student Loan Trusts (NCMSLT). This decision deserves more attention. It threatens the Trump economic boom by potentially hurting America’s financial marketplace. It could also freeze the credit industry.

The NCMSLT Trusts are passive investors who own $12 billion of student loan assets. These assets originated in several banks — such as Bank of America and JPMorgan Chase — more than a decade ago. Pension plans in insurance companies subsequently financed them through securitization capital markets transactions. Securitization helps the economy because it helps investors to fund consumer and student loans. It also lowers interest rates for borrowers.

A Classic D.C. Swamp Move

The CFPB made allegations about debt collection servicers on past due student loan balances. This happened under Cordray’s direction. But instead of going after those debt collectors, they decided to also go after the NCMSLT itself, without any statutory authority to do so.

Cordray’s decision was a classic D.C. swamp move. Cordray presenting a facade of being tough on debt collectors. Yet he put major Obama donor Donald Uderitz in a unique position to shut out other investors and take control over them. Uderitz is the founder of a hedge fund with equity ownership of the NCMSLT. CFPB turned over access and control of the student loan debt services to Uderitz. They allowed him to make a hefty income from something that would have otherwise not have been profitable. Cordray’s actions are what real cronyism and collusion look like.

Obama-Era Consent Judgment

As Breitbart’s Sean Moran reported, House Republicans are speaking out against CFPB’s alarming actions against the NCMSLT. Reps. Sean Duffy (R-WI), Lee Zeldin (R-NY), and Ted Budd (R-SC) sent a letter to CFPB Director Kathy Kraninger. They urged her to withdraw the Obama-era consent judgment. They noted the actions would “penalize innocent actors, including pensions plans, retirement plans, and by extension the consumers that have entrusted their savings to them, for a third party’s alleged misconduct.”

Director Kraninger is a capable and experienced leader. She has demonstrated a commitment to efficient and limited government. She should keep working to return the CFPB is an institution that abides by our Constitution.

Strong and stable credit markets are essential to economic growth. It’s time for Director Kraninger to withdraw the consent judgment. This will help prevent rising student loan interest rates. It will also protect the structural integrity of our capital markets before it’s too late. 

Ken Blackwell served as the mayor of Cincinnati, Ohio, the Ohio State Treasurer, and Ohio Secretary of State. He currently serves on the board of directors for Club for Growth and National Taxpayer Union.