Recently, Navient Corp., the largest student loan servicer in the country, was sued for cheating its borrowers. Navient was found guilty of providing misinformation to student borrowers, ignoring complaints, incorrectly processing payments and using tactics that encouraged borrowers to take on higher-cost repayment options.
Navient’s unethical practices in collecting payments from students pursuing an education should be widely frowned upon, and are highly deserving of the punishment that will be dished out to them. Students should not be monetarily punished for simply trying to obtain a college education.
Pursuing higher education in America is a practice that is welcomed with open arms and is highly encouraged. Going into college, many students are already not fully aware of what precisely their borrowing entails. They should not be worried about federally affiliated loan servicing companies lying or providing misinformation to them throughout the process.
Education should be provided for the betterment of society, not for commercially capitalizing on those who are attempting to improve themselves. In the present day, completing a four-year degree without any student loans is considered an accomplishment. Understanding the fact that most students are not as fortunate to be placed into this situation, minimizing student loans and student loan debt becomes a priority. With balancing a full courseload, work and other obligations, thinking about loan service providers should be the least of students’ worries.
As an affiliate to the Department of Education (ED), using the compensation policies placed into practice for Navient employees should be highly frowned upon as well. Using sales-like tactics and misinformation indicates that Navient was running in ways similar to those of a private firm seeking revenue and profit margins. A bold line should be drawn between collecting loan debt in itself and collecting loan debt with additional amounts that were wrongfully accrued in the first place.
Additionally, as a student and parent loan servicer that distributes federal loans, the suing of Navient may result in borrowers’ mistrust of the government for not doing a better job of watching over those put in charge of issuing loans to students. Scandals involving government-backed companies that handle large sums of money do not assist in improving the government’s image.
Stricter guidelines should be implemented to prevent practices like these from being taught to employees in federal loan servicing companies. Upper level management should also face harsher punishment for encouraging these forms of unethical behavior because of the profound influence that these organizational employee’s have on the culture and structure of their company. The fact that the nation’s largest loan servicing company was caught for using these practices does not mean that similar companies do not use similar means, therefore calling for reviews over these companies as well.
With an existing $1.3 trillion of student loan debt in the United States already, there’s no reason for unjustified amounts to be added to this exorbitantly large sum. Perhaps the ED should implement more definitive standards for loan servicing companies in the United States, or maybe watch over these companies with a closer eye. Regardless of what the ED decides to do, it’s clear that changes need to be made to prevent unethical practices from further plunging students into debt and making borrowers skeptical of the federal government.