Student debt and loan issues have been the most debated topic in the US with Democrats and Republicans accusing each other of poor policies, inefficient education department, and the plummeting enrollment issues in higher education. In the latest news, Senator Elizabeth Warren, one of the presidential candidates from the Democratic Party, has targetted student loan company ‘Navient’.
Recently, the US Education Department is planning on a contract extension for Navient. But according to the letter sent by Warren to the Education Secretary Betsy DeVos, Warren has described how Navient’s attitude has been towards the students with debt. Warren also alleged that the company has been involved in so many cases of abusive behavior in the past decade.
The letter sent to DeVos was also sent to the Chief Operating Officer (COO) of the Office of Federal Student Aid, M A Brown, hoping for his intervention.
CFPB vs. Navient Corporation, 2017
In 2017, a lawsuit was filed by the Consumer Financial Protection Bureau (CFPB) which claimed that instead of providing better services to the borrowers, Navient misdirected the students into other services. A final verdict is yet to be announced.
The mention of the CFPB lawsuit in Warren’s letter has received mixed reactions from the bureaucrats. Persis Yu serves as an attorney at the National Consumer Law Centre feels that the case against the extension of the contract might be just strong enough, especially with the discoveries in the CFPB case.
However, others claim that the judge is yet to give his verdict so Navient is ‘innocent until proven guilty’. Individually targetting one corporation is not the solution to the student loan problem. There are other contractors who are as much guilty as Navient.
In a report released on March 2019, it was found that Navient’s services and handling of borrowers’ calls while the Pennsylvania Higher Education Assistance Agency (PHEAA) has performed the worst.
Navient’s portfolio currently manages the record of more than 6.5 million students. In this case, it becomes difficult to reward the contract to some other contractor. As per a spokesperson for the company, the allegations in the letter are totally false, ‘unfounded’, and made up by the democrats.
