Cordray taps CFPB alum to run student aid enforcement unit

The Biden administration has selected the Consumer Financial Protection Bureau’s former enforcement director to oversee a revamped unit at the Education Department aimed at combating fraud and other misconduct by colleges and universities.

Rich Cordray, the head of the department’s Office of Federal Student Aid, on Friday named Kristen Donoghue as the agency’s new chief enforcement officer.

Donoghue background: Donoghue previously served as the enforcement director at the CFPB, including during Cordray’s tenure as the bureau’s director. She most recently worked at Capital One before joining the Office of Federal Student Aid as a senior adviser in July.

Donoghue will oversee a dedicated enforcement office that was first created by the Obama administration in 2016 but significantly scaled back by the Trump administration.

Key context: In 2017, the Education Department, under then-Secretary Betsy DeVos, was pilloried by Democrats for appointing a former DeVry University official to lead the enforcement unit. The Trump administration said at the time that it wanted to bring more “balance” to how it approached enforcement actions against colleges and universities.

The Education Department said the enforcement unit would collaborate with state and federal regulators — work that was largely put on hold during the Trump administration — as part of its oversight of colleges. In its statement, the department singled out the Federal Trade Commission as a partner agency, which announced earlier this week a new crackdown on for-profit colleges.