This Business
Sucks
July 2024 - Navient | 2nd Runner Up
Our second runner-up no longer does what it did to earn placement on our list of winner this quarter. That’s because Navient has been barred from managing federal student loans because they did it for its own benefit, not the students.
Higher education has long been held as essential to a successful career and improved social standing. That may be why each year more than two million students head off to U.S. colleges and universities.
But it comes with a significant price. Students at a four-year college can expect to pay anywhere from $25,000-to-$60,000 each year for the privilege. Go to a university like Harvard and the cost it closer to $75,000 each September. Each year, 30 to 40 percent of all undergraduate students take on federal student loans; 70 percent of students who receive a bachelor’s degree have education debt by the time they graduate.
No wonder there is a student loan program. And no wonder borrowers are often subject to abuse of the sort found at Navient.
According to the New York Times, the regulators were pretty mad about the scheme.
“For years, Navient’s top executives profited handsomely by exploiting students and taxpayers,’ said Rohit Chopra, the director of the consumer agency. ‘By banning the notorious student loan giant from federal student loan servicing and ensuring the wind down of these operations, the C.F.P.B. will finally put an end to the years of abuse.”
It was just in 2022 that the company settled another suit for similar bad behavior. That one required the company to pay $95 million in restitution and cancel an additional $1.7 billion in loans. Whew.
That’s why it is surprising to us that the domain name, www.navient.sucks, is still available.
But we can’t just point a finger at Navient. At the beginning of Q3 ’24, student loan servicing agency MOHELA, the Higher Education Loan Authority of the State of Missouri, was named in a lawsuit alleging illegal overcharges, failure to timely process paperwork, and misleading borrowers about their student loan accounts. Sounds familiar, eh?
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