You can’t make money and pay your employees if there are no payments to process. Expect chaos if you have student loans.
Major student loan servicer Navient (NAVI) is quitting the federal servicing business, the company announced Tuesday, handing off its 5.5 million borrowers holding about $280 billion in federal student loans to Maximus, another servicer.
Advocates and progressive lawmakers led by Senator Elizabeth Warren (D-MA) heralded the move, in light of Navient’s troubled relationship with the federal government’s consumer protection bodies.
But the departure adds another challenge when the Education Department (ED) looks to end the student loan payment pause in January — especially after four other servicers quit in the past year.
With Navient’s announcement, roughly 16.3 million student loan borrowers will be getting a new loan servicer in 2022.
The Pennsylvania Higher Education Assistance Agency — which services around 8.5 million student loan borrowers — and Granite State — which services around 1.3 million borrowers — both called it quits in July. Utah Higher Education Assistance Authority, which pulled out in October 2020, serviced around 1 million student loan borrowers.
The departures come as the majority of the 43 million student loan borrowers across the U.S must start paying their loans again. The payments have been paused, without interest, since March 13, 2020, with the Biden administration recently extending the pause through January 31, 2022.
“Navient has spent decades misleading, cheating, and abusing student borrowers. The Federal student loan program will be far better off without them,” Senator Elizabeth Warren (D-MA) said in a statement.
“Ultimately, the student loan system is broken,” she continued. “The only way to guarantee that borrowers do not face the same predatory behavior from Navient’s replacement is to cancel student debt, so that no borrower’s future is held hostage by corporations profiting off their financial distress.”
So…. the federal government took over the student loan program, effed it all up, and now the solution is for the taxpayers to just give the money to college kids? Joe Plumber who never went to college has to pay for the lawyer’s student debt because the government is incompetent?
Maybe some politicians who voted to federalize and screw up the student loan system should have to foot the bill.