Sallie Mae acquired such a bad reputation that
it changed its name to Navient.
But the service has not improved, as
Navient is at the center of the Student Loan Servicers Mess.
What Do Student Loan Servicers Do?
A l(student) oan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.
How has that worked out for our friends at Navient?
According to the Consumer Protection Finance Bureau (CPFB)
Navient failed to apply borrower repayments accurately, the bureau said, and the company did not make clear what its customers needed to do to keep their payments low. Worst of all, though, it accused Navient of hurting disabled military veterans, who can seek loan forgiveness under a federal program. Navient, the lawsuit said, inaccurately told credit reporting companies that veterans taking advantage of this program had defaulted on their loans.
Who Could Have Seen This Coming?
Well, readers of this blog for one.
More of a blow by blow account from the article linked to above:
In 2014, the company paid $60 million to settle an investigation by the Justice Department and the Federal Deposit Insurance Corporation, alleging that the company had been illegally overcharging military families as far back as 2005. The complaint described Navient’s conduct as “intentional, willful, and taken in disregard for the rights of service members.” According to the F.D.I.C., service members were erroneously told they must be deployed to obtain certain loan benefits.
Then there was a 2009 Education Department investigation that determined Navient predecessor Sallie Mae had overcharged the government by $22.3 million by abusing a program meant for smaller lenders. Ms. Christel said Navient appealed this finding and was awaiting a ruling on it.
In 2008, the F.D.I.C. and the Utah Department of Financial Institutions issued a cease-and-desist order against Sallie Mae Bank, a subsidiary. The regulators said the bank had violated laws banning unfair and deceptive practices as well as those protecting borrowers from discrimination.
And one year earlier, Sallie Mae struck a settlement with Andrew M. Cuomo, then the New York attorney general, over conflicts of interest in the company’s practices. Among them were Sallie Mae’s practice of paying entertainment and travel expenses for officials of schools it did business with.
To settle that matter, Sallie Mae paid $2 million into an education fund.
I could go on, but, you get the picture.
Why? Why does our government keep giving these people contracts?