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The central problem I have with a loan like this is that it is tied to a socially encouraged activity that is central to most Americans' ideas of a successful p

The central problem I have with a loan like this is that it is tied to a socially encouraged activity that is central to most Americans' ideas of a successful path to adulthood. If we're going to socially encourage this, it needs to have some backstops to catch folks who fall. Whether the collections is outsourced or insourced, your average student borrower isn't planning on having their life's trajectory fall apart. They aren't expecting the hardships that lead them to need remediation. However many warnings you provide them on the front end, it's at the time of crisis that they need advice and guidance. Navient has been horribly negligent and predatory in this regard. Anyone taking on the job of preferred collector of gov't loans should be required to act in the interests of the borrowers - aka the American public.

lr4444lr 10y ago
I agree with your paragraph 1, not with paragraph 2. The US Dept. of Ed. could have come up with any number of solutions including outright forgiveness, work programs, access to cheap fee-based financial planners, more scholarships, changes to the tax code for the borrowers, or hiring incentives for employers. Instead, it chose to sell it off the debt in order to keep the accounting balanced under the desired time frame. Navient should pay what the court compels it to if outright deception is found, but let's not overstate their role in the general problem around the structural non-sustainability of federal education loans, and the short-sightedness executive decision to spin off the liabilities into private hands.
- OrwellianChild 10y ago
  I don't think we necessarily disagree - you think outsourcing the liabilities was a bad move, presumably because in private hands, collections will be ruthless... I'm complaining about the same point. I just see no reason why "private actor" must imply ruthlessness. The terms of the contract or laws governing the collection of gov't loans could be written to enforce a fiduciary-like expectation into the arrangement.

lr4444lr 10y ago

I agree with your paragraph 1, not with paragraph 2. The US Dept. of Ed. could have come up with any number of solutions including outright forgiveness, work programs, access to cheap fee-based financial planners, more scholarships, changes to the tax code for the borrowers, or hiring incentives for employers. Instead, it chose to sell it off the debt in order to keep the accounting balanced under the desired time frame. Navient should pay what the court compels it to if outright deception is found, but let's not overstate their role in the general problem around the structural non-sustainability of federal education loans, and the short-sightedness executive decision to spin off the liabilities into private hands.

OrwellianChild 10y ago
I don't think we necessarily disagree - you think outsourcing the liabilities was a bad move, presumably because in private hands, collections will be ruthless... I'm complaining about the same point. I just see no reason why "private actor" must imply ruthlessness. The terms of the contract or laws governing the collection of gov't loans could be written to enforce a fiduciary-like expectation into the arrangement.