The federal government accuses the company of defrauding, stealing from millions of student loan borrowers.
The federal government accuses the company of defrauding, stealing from millions of student loan borrowers.
Most people think 2016 was the worst year ever for black folks, but frequently left out of the narrative was the awful press generated by data on student loan debt in black communities. Two significant research reports should’ve put black folks on high alert about the rising costs of education, and how it disparately impacts our long-term capacity to build wealth.
First, the Brookings Institute released a study revealing that the total student loan debt owed by African American college graduates more than triples the debt owned by white graduates, and nearly half of black grads default on repayment compared to just 18 percent of white grads.
Black-white disparity in student loan debt more than triples after graduation | Brookings…
The moment they earn their bachelor’s degrees, black college graduates owe $7,400 more on average than their white…www.brookings.edu
Two months later, the United Negro College Fund released a report showing that HBCU graduates specifically borrowed more money for college more often in comparison to non-HBCU students.
Infographic: Fewer Resources, More Debt: Loan Debt Burdens Students at HBCUS | UNCF
UNCF is the nation’s largest and most effective minority education organization.www.uncf.org
In summary: black folks face a hard time finding a bottom line for social mobility which doesn’t actually cost more than we can earn in the first seven years after graduating from college. And then you find out that even the bottom line can collapse beneath you, as one of the nation’s largest student loan servicers is being sued by the federal government for allegedly stealing from borrowers, prohibiting chances to negotiate lower payments, and falsifying information about certain students’ repayment status.
Student Loan Collector Cheated Millions, Lawsuits Say
The lawsuits describe routine mistakes and lapses in oversight that over time added up to systematic failures, eerily…www.nytimes.com
Some of the greatest hits from the Consumer Financial Protection Bureau’s announcement of the lawsuit:
Navient repeatedly misapplies or misallocates payments — often making the same error multiple times over many months. The company all too often fails to correct its errors unless a consumer discovers the problem and contacts the company.
From January 2010 to March 2015, the company added up to $4 billion in interest charges to the principal balances of borrowers who were enrolled in multiple, consecutive forbearances. The Bureau believes that a large portion of these charges could have been avoided had Navient followed the law.
Navient’s emails and annual renewal notice sent to borrowers failed to adequately inform them of critical deadlines or the consequences if they failed to act. Navient also obscured its renewal notices in emails sent to borrowers that did not adequately alert them about the need to renew. Many borrowers did not renew their enrollment on time and they lost their affordable monthly payments, which could have caused their monthly payments to jump by hundreds or even thousands of dollars.
Navient told borrowers that they could apply for co-signer release if they made a certain number of consecutive, on-time payments. Even though it permits borrowers to prepay monthly installments in advance and tells customers who do prepay that they can skip upcoming payments, when borrowers did so, Navient reset the counter on the number of consecutive payments they made to zero. So borrowers who tried to get ahead of their loans and prepay would have been denied co-signer release and had to start over.
Severely and permanently disabled borrowers with federal student loans, including veterans whose disability is connected to their military service, have a right to seek loan forgiveness under the federal Total and Permanent Disability discharge program. Navient misreported to the credit reporting companies that borrowers who had their loans discharged under this program had defaulted on their loans when they had not. This potentially caused damage to their credit reports.
If true, it is disgraceful for Americans working hard to get ahead in a lean economy with few dollars to spare. For black graduates, the results can be outright disastrous.
Harmed by Navient? What student loan borrowers need to know
The U.S. Consumer Financial Protection Bureau is suing Navient Corp., the nation’s largest student loan servicer…www.usatoday.com
The irony is that with all of its guidance and rule making to catch and hold accountable schools which do not meet metrics of graduation rates and alumni getting jobs and successfully paying back loans, the federal government had little oversight of a company with which it contracted to collect loans on its behalf, to prevent them from defrauding and stealing from graduates trying to do the right thing by repaying.
And now, thousands of HBCU grads who finished school in the last six years have the fun task of dedicating spare time to finding out if the money they owe three times more of than white students may have been tied up in a national scheme to steal even more money from them.
And the best news? Tomorrow, Donald Trump takes office.
Donald Trump’s higher ed ‘plan’ will explode the student debt crisis
Trump is disguising a giveaway to Wall Street banks as a solution to the student debt crisis.thinkprogress.org
