Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, in November. (Jacquelyn Martin/AP)

A federal consumer watchdog Thursday played down controversial plans to fold the student arm of the agency into another office, following the leak of a memo outlining the move.

“Contrary to malicious rumors and misinformation being spread elsewhere, the Bureau of Consumer Financial Protection is not shutting down its efforts to protect and inform students,” agency spokesman John Czwartacki said in a statement.

He added: “The office in question is not being shuttered, its work continues, personnel are all on the job and working on the same material as they were before. There is a very modest organizational chart change to keep the Bureau in line with the statute but the office is still operating within the same division. The bottom line is there is no functional or even practical change.”

Czwartacki’s comments are a rebuke of mounting criticism from advocacy groups and liberal lawmakers who have accused Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, of undermining the work of the office for students and young consumers. The office is the only unit in the federal government solely dedicated to protecting student loan borrowers from predatory actors in the financial sector.

“Call it what you want: shutting down, reorganizing, downsizing, rightsizing. Coming from Mr. Mulvaney’s office, it’s of little comfort to students and families who know the Trump Administration is not on their side,” Sen. Richard J. Durbin (D-Ill.) said in an email to The Washington Post.

Mulvaney sent a memo Wednesday informing staffers of a reorganization that will tuck the student office into the bureau’s office of financial education. Though the memo, obtained by The Washington Post, provided no details on how the consolidation will affect employees or their duties, the backlash against the move was swift.

Dozens of Democratic lawmakers, including Sens. Elizabeth Warren (Mass.), Patty Murray (Wash.) and Durbin, denounced the consolidation as a thinly veiled attempt by the Trump administration to curry favor with the student loan industry at the expense of consumers.

On Thursday, protesters gathered in front of CFPB headquarters to oppose the reorganization and urge the agency to continue to fight for student loan borrowers.

“We know that this is a step in exactly the wrong direction,” Marceline White, executive director of the Maryland Consumer Rights Coalition, said at Thursday’s protest. “This shows the intent of the agency to roll back protections of consumers, while instead protecting debt collectors and predatory student loan servicers.”

The office for students combs through complaints from consumers, interfaces with state attorneys general and talks to consumer rights organizations to identify problems in education lending and servicing. Staffers then come up with policy recommendations, including new regulations or guidance, to solve those problems. When they identify violations of the law, they recommend the bureau pursue legal action.

The unit is credited with bringing about some of the most significant student lending cases in recent years, including lawsuits against Corinthian Colleges, ITT Educational Services and student-loan servicer Navient. It has helped return more than $750 million to student loan borrowers across the country, according to the bureau. Student advocates worry that moving the unit into the financial education arm of the bureau will result in a shift in priorities.

“Financial education is useless against a lender, servicer or debt collector who engages in predatory and abusive practices,” said Persis Yu, a staff attorney at the National Consumer Law Center, an advocacy group. “This move sends borrowers a message that they are on their own when it comes to standing up to large student lenders.”

The reorganization comes as the agency abandons plans to impose tougher borrower protections against unscrupulous student loan servicing. The consumer watchdog removed the plan from its long-term regulatory agenda announced Wednesday by the White House Office of Management and Budget.

According to the bureau, Mulvaney simply reclassified the plan as “inactive” in the expectation that decisions on whether to proceed will be made by the CFPB’s next permanent director.

“This change in designation is not intended to signal a substantive decision on the merits of the project,” Kelly Thompson Cochran, assistant director for regulations at the CFPB, said in a blog post Thursday.

The elimination of the measure, conceived during the Obama administration, has disappointed student advocates who consider the bureau one of the last lines of defense in protecting the rights of student loan borrowers. Many have given up on the Education Department since Secretary Betsy DeVos withdrew Obama-era policy memos meant to strengthen consumer protections for borrowers.

Those memos were an outgrowth of a collaboration with the bureau, which at times butted heads with the Education Department but still teamed up with it on student loan policy. That relationship has soured since the Trump administration ended an information-sharing agreement between the agencies and insisted the consumer watchdog has no jurisdiction over federal student loans.