NAVIENT, the former Sallie Mae, is in the news again??? This is our nation’s LARGEST private loan servicer, working with over 12 million borrowers and whose motto is “Solutions for your Success.” Taking advantage of us. Again. This is the student loan giant that everyone knows, and everyone owes.
It is extremely concerning to read the latest headlines about Navient.
Discriminating against active duty service members?
Investigations found loan violations dating back to 2005! Our country is in serious trouble, with a national loan debt of 1.3 trillion dollars, resulting in slowing economic growth and struggling borrowers. We are talking about one of the largest companies in this country that is digging us deeper into debt with fraudulent loan repayment plans and overcharging the millions of borrowers who are already drowning in debt.
Following a May investigation, the Consumer Financial Protection Bureau, Federal Deposit Insurance Corp, the US Justice Department, and the Department of Education demanded that Navient face the most serious penalties that have ever been handed out to a contractor of the DOE.
- Sixty million dollars were to be returned to the 60,000 active duty service members that were overcharged, along with a $55,000 government penalty.
- For overcharging borrowers late fees on loans, the settlement called for Navient to reimburse 30 million dollars to customers and pay a 3.3 million dollar government fee.
But is that enough?
The Consumer Financial Protection Bureau doesn’t think so. As of yesterday the CFPB has decided to consinder suing the student loan giant for the company’s shady ethics. As it turns out, almost every consumer protection in place to protect borrowers from predatory collectors has been removed. The Department of Education can garnish wages, social security, and disability checks if a borrower defaults. More and more it is starting to look like the DOE had betrayed the public and chose to side with lenders. The truth of the matter is that both private lenders like Sallie Mae and government-backed federal lenders are making more money from defaults than loans that are in good standing. Between 2007 and 2012, the Department of Education made $66 billion in profit from loans in default. The former Sallie Mae has shelled out close to $3 million every year since 2007 backing politicians. Building this relationship with the federal government allows for both parties to make a profit from struggling borrowers.
It is absolutely time for someone to step up and shut this down.
Last month Discover was penalized for allegedly cheating student loan borrowers, overcharging, denying tax benefits, and engaging in illegal debt-collection tactics. Student loan forgiveness scam companies have popped up everywhere, making promises they can’t keep and won’t deliver. If we don’t regulate this now, we are in big trouble. The country is currently overrun with debt; student loan debt is the second largest source of American debt after mortgages! At Student Debt USA our goal is to educate the 40 million student loan borrowers about the programs that are available to them and the people they can trust. The Secretary of Education Arne Duncan said, “Every student should have peace of mind that they can get the benefits they’re entitled to.”