Navient (formerly SallieMae) is responsible for a great deal of student loan debt. But was Navient making bad loans from the start? The Attorney Generals of and think so and have filed suit alleging the same:
In recent months, the student loan giant Navient, which was spun off from Sallie Mae in 2014 and retained nearly all of the company’s loan portfolio, has come under fire for aggressive and sloppy loan collection practices, which led to a set of government lawsuits filed in January. But those accusations have overshadowed broader claims, detailed in two state lawsuits filed by the attorneys general in Illinois and Washington, that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students like Ms. Hardin that never should have been made in the first place.
“These loans were designed to fail,” said Shannon Smith, chief of the consumer protection division at the Washington State attorney general’s office
I have seen a number of student loans that do not make financial sense. Graduates saddled with forty to sixty thousand dollars for an Associate’s degree and an extremely high interest rate to boot. It just doesn’t make sense.
What’s worse is often the student loan companies and their collectors fail to tell students about the rehabilitation plans that are in place. Student loans are designed to help people get an education and enter the workforce—not to simply line the pockets of Wall Street bankers.