Student loans and the rampant profiteering off of the dreams of our youth is quickly becoming one of the biggest travesties to ever afflict American society. For far too long, Wall Street and the predatory, exploitative practices of lending agencies have been reaping millions off of the sweat and tears of college graduates. It’s about time someone started to hit back; the Consumer Financial Protection Bureau have just set their sights on Navient, a federal contractor which has been extorting money out of students for years:
“The Consumer Financial Protection Bureau, which had been investigating the company for nearly two years, sent Navient a letter on Aug. 19 telling its executives that the agency’s enforcement staff had found enough evidence to indicate the company violated consumer protection laws, Navient disclosed Monday in a filing with the Securities and Exchange Commission.”
However, the real issue highlighted here is the corporate tendency to abuse their position and the violation of fiduciary responsibility to which private corporations held to when the government contracts its business to industry – and how the bureau is working an uphill battle to combat abuses.
The Consumer Financial Protection Agency (CFPB) is Elizabeth Warren’s brainchild and one of President Obama’s most undervalued achievements, which was created in 2011 over vociferous objections from the GOP. Since then the agency has fined several major banks and had hundreds of millions of dollars returned to consumers for deceptive credit card schemes, as well mortgage lenders for similar abuse, and last year the CFPB announced it would begin overseeing non-bank student loan providers- the biggest of which is Navient. “Consumers have filed thousands of complaints with the CFPB against Navient and its predecessor company, Sallie Mae…No company had paid out more money in refunds to aggrieved borrowers with private student loans than Navient.”
Sallie Mae, the original government entity that serviced federal student loans, was formed in the early 1970’s. But it was fully privatized under Bush in 2004, when Sallie Mae spun off its loan portfolio into a publicly traded company called Navient Corporation 2014, under the guise of adding “efficiency” and making student loans less expensive. It is very clear now that this did not happen.
American graduates now hold $1.2 trillion in student loan debt. Forbes reported that “two-thirds of students graduating from American colleges and universities are graduating with some level of debt. How much? According to The Institute for College Access and Success (TICAS) Project on Student Debt, the average borrower will graduate $26,600 in the red.”
As with any company that has to answer to the demands for quarterly reports from stockholders and Wall Street, it apparently makes no difference to Navient Corporation that they were entrusted with the administration of college loans for students and active-duty troops – as it makes no difference to private prison corps that they are entrusted with the rehabilitation of people. The idea that they were responsible for doing something other than making as much profit as legally possible is apparently lost to them. It is a welcome sight to see somebody sticking up for the consumer and dealing with the rampant thievery and extortion that has become par for the course on Wall Street these days.
Opinion columnist and former editor-in-chief of Occupy Democrats. He graduated from Bennington College with a Bachelor's degree in history and political science. He now focuses on advancing the cause of social justice and equality in America.