By DANIEL SONNINSHINE
Recently, the Federal Reserve announced that nationwide student loan debt has hit the $1.5 trillion mark. It is agreed all around that something must be done about debt that is spiraling out of control, forcing recent (and not-so-recent) college graduates to pay back far more than they borrowed to begin with. In an attempt to understand and possibly combat this growing debt, student loan servicing companies have faced recent scrutiny, and at least one servicing company has been found to use deceptive practices.
Navient, one of the largest student loan servicing companies in the United States, was audited by the U.S. Department of Education in 2017. The audit results only recently have been made public, and they show evidence that Navient employees may have pushed borrowers into costly repayment programs, when cheaper options were available to them. They failed to provide borrowers with information on all options available to them, and likely forced thousands of borrowers to repay more than they should have. According to the Consumer Financial Protection Bureau, Navient’s deceptive practices have caused borrowers to owe nearly $4 billion in additional interest on their debts.
Sen. Elizabeth Warren (D – Mass.) has criticized Navient for these apparently deceptive business practices. In a letter to Navient, she wrote, “This finding is both tragic and infuriating, and the findings appear to validate the allegations that Navient boosted its profits by unfairly steering student borrowers into forbearance when that was often the worst financial option for them.”
Navient is facing trouble on all sides. Besides the audit findings coming to light, the company is currently facing lawsuits in Pennsylvania, California, Mississippi, Illinois and Washington, as well as a lawsuit from the Consumer Financial Protection Bureau. And this past week, shares of Navient stock sank by more than ten percent.
If Navient really did deceive its customers and increase debt for thousands of students, then maybe (hopefully) karma is now at work. What goes around comes around…
Daniel Sonninshine is an Empire State News staff writer, who is in search of greatness. A 20-something smart fellow, he is now lifting weights in an effort to obtain more power. If that doesn’t work, he will ask to write more editorials for Empire State News and less fact articles.
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