It is widely understood that making a good solid living these days often – but not always – requires getting a college education. Doing so should not mean accumulating debt that will cripple graduates’ futures.
But that is exactly what happens to millions of Americans who find themselves part of a growing nationwide crisis. This country’s student loan debt is $1.4 trillion – and growing.
The situation is only worsened when roadblocks to repayment are built. The Obama administration attempted to rein in spiraling student debt. Solving the problem will take an even greater effort by the Trump administration.
One of the first steps should include going after bad actors that take advantage of desperate people struggling to repay college loans. Along those lines, the Trump administration will have to decide whether to support the Consumer Financial Protection Bureau’s pursuit of loan servicer Navient, which stands accused of cheating borrowers on their college loans.
The bureau was created under the 2010 financial reform laws that toughened regulation of the financial industry. Republicans have long had the bureau in their sights. If the new administration does what Navient hopes and eases the pressure, people with loan debt might find themselves in ever-deepening debt.
A New York Times article published in The News detailed the stories of customers who could find no remedy through Navient. State and federal lawsuits accused the largest collector of student loan payments in the nation of shoddy practices – “sloppiness and misleading tactics.” The company is fighting the lawsuits and has denied wrongdoing.
Navient is the former Sallie Mae, which was privatized in 2004. Navient services the loans of about 12 million current and former students and is responsible for keeping track of monthly payments on more than $300 billion in loans. Yet, the company has been accused of failing to help struggling borrowers through the process of “either capping their monthly payments based on income or finding other ways of reducing those payments.” Instead the company took the easy route for itself, according to the lawsuits.
The Consumer Financial Protection Bureau claims that half of Navient’s borrowers who were struggling financially and were eligible for income-based repayment plans would actually qualify for a zero-dollar monthly payment. Navient has instead enrolled 1.5 million borrowers in forbearance plans that maintained their punishing debt, according to the Times.
The company could settle or allow the lawsuits to wend their way through the courts, possibly for years, while customers continue to suffer.
The Trump administration has inherited the task of addressing the crisis in student loan debt. Continuing the pressure on Navient will be a start.