Trump is gutting the few protections student borrowers have, even as the largest student loan servicer faces a major lawsuit.
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“The struggle between rich and poor has largely taken the form of conflicts between creditors and debtors.” — David Graeber
Zack’s Investment Research recently recommended that people buy stock for Navient (formerly Sallie Mae), the nation’s largest servicer of student loans. This may seem curious given that the company is facing a historic lawsuit filed on January 18 from the Consumer Financial Protection Bureau (CFPB), that alleges (in agreement with aggrieved student borrowers) that the company has “illegally cheated many struggling borrowers” for years through “shortcuts and deceptions.”
Organizers are cautiously optimistic the lawsuit may lead to relief and/or reform in the coming years. But this “heightened regulatory scrutiny over alleged anti-consumer practices” isn’t scaring investors, who remain bullish on student loan bullies. Navient’s shares outperformed expectations, benefiting from a 30 percent spike in its stock just as Donald Trump was elected president.
No one forces people to take out massive student loans.
Some people would be better off going to school part time and working to pay their tuition. That’s what many of us did in past years.
However, it is true that during the Bush and Obama years predatory practices became a normal part of the business.