Navient & Student Loan News

Navient, formerly Sallie Mae, still on a 

navientSTUDENTloan
Student Loan value?

losing streak.

Navient

Shahien Nasiripour writes frequently for

Bloomberg on student loan issues.

So there is lots of material.

Navient Corp. lost out on a lucrative government contract to collect on defaulted federal student loans late last week, disappointing previously optimistic investors. The company has collected on such debt for nearly two decades, raking in tens of millions of dollars in annual revenue. 

Navient used to be Sallie Mae, but messed up like a restaurant that gives 50 people food poisoning so has to change its name to stay in business.

But, for that to work, you have to stop poisoning the clientelle.

The Consumer Financial Protection Bureau has been investigating the company for about two years, and the Education Department last year declined to extend Pioneer’s expiring debt collection contract after determining that the company’s employees had misled borrowers at “unacceptably high rates.” Navient sued the Education Department in federal court to overturn its decision. The case is still pending, and the company has denied any wrongdoing.

Trouble Paying Student Loans?

Well, one of my themes, and I am not alone on this, is that the student loan bubble pumped up tuition costs, as colleges did not want to miss the gravy train, so created more programs (that would not lead to jobs) and lowered admission standards to make more money.

Gee, sounds like the mortgage crisis/real estate bubble.

Because it is.

So, for the first (?) time, the Department of Education released stats on whether folks with student loans have degrees that will enable them to earn enough income to, repay the student loans.

gainful employment regulations, which attempt to measure whether graduates of career-training programs end up earning enough to afford their student debt. The Obama administration defined affordability as annual loan payments of no more than 20 percent of discretionary income, or 8 percent of total earnings.

Somehow, the Obama administration seems to always find that private, for profit colleges are the problem.

More than 800 career-training programs across 296 schools produced graduates who recently left school with loan payments exceeding either 30 percent of their annual discretionary income or 12 percent of earnings, government data show. The schools range from the defunct ITT Technical Institute to Harvard University. (A graduate certificate in drama from the Ivy League school leaves the typical student with debt that’s 44 percent of discretionary earnings). Unless they challenge the data, schools must warn prospective students that they’re at risk of losing access to federal student loans within a few years.

Of course, there is a problem.  And Harvard is a private school.

I wonder how many law schools are in there?

Law school seems to be the most expensive degree with the worst results.  More in student loans, way more, and fewer and fewer good paying jobs.

Watch for what the Trump administration does on this issue.

Student Loans And Politics

Bernie Sanders wanted free college for everyone. Well, somebody would be paying, just, not the students. The Obama administration does not like for profit colleges, among other for-profit entities it dislikes. New rules are supposed to make it easier to get rid of student loans incurred to attend fraudulent colleges/programs. President elect Trump, a big… Continue Reading

What Is Undue Hardship?

Most courts apply the Brunner test to determine whether student loan debts are dischargeable in bankruptcy. The bankruptcy code provides that student loan debt is NOT dischargeable in bankruptcy unless the debtor can prove it would be an undue hardship for the debtor to have to repay the student loan debt. So, it would be an undue… Continue Reading

Where Do Student Loans Get You?

Couple of student loan stories out today that caught my eye. College Cost Too Much Uh, yeah.  Lots have written about how the flood of student loans from the government the last decade plus has pushed college costs up way higher then the inflation rate. We spent 3% of our national output on, which is… Continue Reading

Student Loan Stuff

Well, let’s start with another measure about how bad the Student Loan situation is. Credit Sesame, a credit and loan management company, took a look at the places where the median annual income for those with a bachelor’s degree or higher is less than the average student loan balance. In short, places where graduates owe more than… Continue Reading

Student Loans In Chapter 13 Bankruptcy

Chapter 13 bankruptcy  is a payment plan bankruptcy for individuals. Not necessarily a 100% payment plan. Student Loans In Chapter 13 Bankruptcy In Chapter 13, creditors in the same class must be treated, that is, paid, the same percentage of its claim. Although, just as in Chapter 7 bankruptcy, student loan debt is NOT dischargeable unless… Continue Reading

Student Loan News

Well, I wrote something good about a student loan servicer last week, but, Student Loan News this week reverts to form. Student Loan News:  Wells Fargo fesses up Sort of. As part of a deal announced Monday, the San Francisco banking giant did not admit or deny wrongdoing but agreed to pay a $3.6-million penalty to the Consumer… Continue Reading