
Student Debt Giant Navient to Borrowers: You’re on Your Own - joshwa
https://www.bloomberg.com/news/articles/2017-04-03/student-debt-giant-navient-to-borrowers-you-re-on-your-own
======
techsupporter
> There is no expectation that the servicer will act in the interest of the
> consumer... Navient says its public statements encouraging borrowers to
> contact the company didn’t mean it would act in their best interest.

So, pardon in advance for the vulgar language, but why the fuck is this OK?
From _any_ company?

I'm getting real damn sick and tired of "what the big print gives, the spidery
print takes away" and how we're all just supposed to be OK with this, as if
this is how the world works or some crap.

If your public advertising--especially, but not limited to, when administering
a service on behalf of the government--explicitly says "call us and we will
help you," your company should not then be able to turn around and say "well,
caveat emptor for calling us, sucker." Meanwhile, the handful of agencies
devoted to trying to help the individual get any kind of a fair shake from the
company "provider" that _massively outguns_ any one individual customer, are
all under attack from all sides as being "too heavy handed." (I love the CFPB,
in case you can't tell.)

Oh, and this whole "consumer" crap? I'm not a "consumer," I'm a _customer_.
I'm not consuming anything from a financial services provider, I'm using their
services. Stop with the idea that all of us are just mindless drones, eating
our Pac Man-like dots on the way to a swift end, and maybe get back to the
idea that real people are on the other end of those faceless account numbers.

(FWIW, this applies to every company with mandatory, binding arbitration
clauses, including the oh-so-enlightened participants in Y Combinator. Don't
restrict my ability to hold you to your side of the agreement while reserving
all rights to pound me into the sand at your leisure.)

~~~
noonespecial
>I'm getting real damn sick and tired of "what the big print gives, the
spidery print takes away"

I propose "the bigger the print, the stronger the statement". Therefore, if
you make one claim in 24 point and then attempt to rescind or modify it in 8
point, the 24 is legally binding because it was larger and so nullified the
smaller. This also means that if you want to place limitations (like 'one per
customer' etc) on an offer you make in print, those will have to be printed in
an equal font in order to be valid.

~~~
anigbrowl
I was thinking about this the other day looking at a billboard, talking about
how Alive/Bob/Carol wasa winner! at the local casino, with a tiny 'play
responsibly' box huddled in the corner. I don't have a strong opinion about
gambling but I do care about externalities, and I was amused by the idea that
some percentage of billboards (reflective of the incidence of problematic
gambling) should feature Alive, Bob and Carol losing everything to their great
despair, but with the same logo and typesetting choices as the positive
advertising.

More seriously, I think first amendment protections for commercial speech are
too generous. Game theory tells us that perverse incentives will often win
out, and while it's tempting to fall back on _caveat emptor_ it's also a cop
out. The reality is that the huge and increasing information asymmetry between
organizations and individuals leads inevitably to inequitable outcomes;
further, it's _entirely predictable_ that by swamping the recipient of a
contract with reading material they'll just go ahead and agree to it because
it's not obvious that it will be worth the effort of analysis. I can't
remember the last time I read a EULA, and I _like_ reading contracts and legal
documents.

Free business idea: a fiduciary AI that parses contracts, simplifies
contractual terms for maximum clarity, and rates contracts on their adherence
to/deviation from industry norms.

~~~
ap3
For casinos make the odds of winning play a part in the adverts.

99.9% of the casino adds have to show people sad about losing - before we get
1 winning ad

~~~
danudey
Nah, just require them to disclose the odds for any games of chance.

"Visit Golden Palace _photo of a roulette wheel_ for a 46% chance of breaking
even!"

~~~
pmiller2
Wouldn't help. Lottery tickets have the odds of winning printed right on them,
and people still buy them.

~~~
adrianN
Spending ten bucks on a lottery ticket doesn't hurt most people while winning
the lottery can have a live-changing impact. Every action is rational for a
properly chosen value function.

~~~
malnourish
Yep. I'll spend 8-16 bucks a month on lottery tickets. It's what I use spare
cash left in my wallet for. It's not going to break the bank and I'm likely
not going to win, but it's a nice pipe dream and where I live a decent amount
of the money goes to the environment.

~~~
rarec
Playing the lottery is more paying for the fantasy of winning than actually
expecting to. It makes for some fun office chats, and worth a couple of extra
bucks.

------
jordanmoconnor
It's mind-blowing how the majority of high school students are lied to each
year about the ROI of college. The internet has re-written the rules, and high
school educators don't know how to teach that.

I would have benefited so much more from a program that taught how to be self-
sufficient and the major, major benefits of living debt free.

Context: $150k in student loans - lucky enough to have an electrical
engineering corporate job to (minimally) pay the bills.

EDIT: More Context: I went to an engineering focused private university,
borrowed my way through the whole thing (housing, food, everything), parents
didn't pay a dime. Stupid? Yes.

~~~
rhino369
College degrees still mostly have a good ROI. The huge lie is the ROI on
pedigree, prestige, whatever you want to call it. Kids are still being told to
apply to expensive small private schools and to worry about the financial aid
process later. Kids are told to find the right fit.

None of that really matters. The big ROI is just getting a degree or the type
of degree. There are few elite schools that have a much better ROI but they
tend to be very generous with financial aid anyway.

Also, community colleges are a great resource. As long as community colleges
exist, we shouldn't even allow student loans for the freshman and junior year.
You can do your first two years while working part time to pay the very minor
tuition. Then you can transfer to another school. Every flagship state school
takes tons of transfers. My buddy transferred from a podunk community college
to Stanford.

And when you transfer you should go to a cheap school. Unless you get a great
college scholarship, it should be your state's flaghship public school.

Nortwestern is a great school, but not 150k better than UIUC (and for
engineering its not better period). If you get a nice financial aid award,
great, but otherwise don't go. My college counselor in high school was telling
people to pay full price for DePaul instead of UIUC just because they wanted a
"city experience." No, that's not worth it.

~~~
labster
Depends on the job. If you want to get on the US Supreme Court, you have to go
to Yale or Harvard.

But in general yes, it's a good idea to shop around. It also depends on the
field you want. CSU Northridge is a pretty marginal school, but it's great at
geology.

~~~
rhino369
Law is a big outlier in general. There the degree doesn't matter at all, only
the prestige. But I still wouldn't recommend paying 200k to go to Yale if
Northwestern offered you a full ride. There is one SCOTUS job every 4-5 years.

For law, I'd say get a scholarship or aid at a great school or don't go at
all.

In many ways grad school is an outlier in general. It's often just not worth
it to get a PhD from a less respected institution. The difference is that most
PhD programs pay you, not nice versa.

------
Arubis
"[Navient pointed out]...more than 40 percent of loan balances it services for
the Education Department are enrolled in income-based repayment plans."

 __Over 40% __of people with US Government-sponsored student loans--which were
presumably taken out in order to advance the career prospects of the borrower
--are not being paid sufficiently to repay their loans on the basis of their
original issuance, _and this is presented as a good thing_.

Unbelievable.

~~~
wyldfire
I don't think you understood the article.

Navient is a debt collector. They were sold loans owned by the US Dept of Ed
(or hired by the department of ed maybe?)

"more than 40 percent of loan balances it services...." means that out of the
loans that the US Dept of Ed decided it can't collect on anymore -- many of
those are using the option that would benefit them the most.

The article talks about Navient saying one thing: "we want to help all of the
borrowers because they are actually not just borrowers but
citizen/constituents"; while doing another: "thanks for calling Navient,
having trouble paying your loan? Just hit the loan-pause-button and we will
pause your loan for 24 months. No, we will not tell you this but you could
have asked for the 'smaller loan payments because you're not earning much'
button'."

~~~
LyndsySimon
> out of the loans that the US Dept of Ed decided it can't collect on anymore

Nope - Navient isn't a collector, it's a servicing company.

~~~
lr4444lr
It's both[0]. But what it's not doing is duping aspiring college graduates to
take out these loans in the first place. As detestable as their predation on
the delinquent may be, they're not pumping up the loan bubble.

[https://www.navient.com/about/who-we-
are/services/](https://www.navient.com/about/who-we-are/services/)

~~~
esrauch
On the other hand, my loan servicer was changed to some unbelievably poorly
managed servicing company years after I had graduated (not one of the big 3-4
companies): think login without ssl, mailing me paper with my SSN printed on
it, couldn't get a person on the phone after waiting on hold for hours.

I never choose to make any financial deal with that company and I never would
have given any choice. The net result was just that I made it my absolute top
priority to pay off the rest of my loans held by them (which was also a very
frustrating process, with several rounds of extra interest and surprise tiny
fees and more inability to get someone on the phone) but other people wouldn't
have that luxury.

~~~
selimthegrim
This sounds like ACS

------
jknoepfler
While I appreciate that people are sour about student debt, I don't think
Navient, qua big business, should behave in any other way.

I personally think public universities should be free and highly selective,
rather than the opposite. But I also think taking out loans with no plan to
repay them is criminally stupid. If the education product being sold is
fraudulent, go after the fraudulent institution (as has been done). But the
bank? They're just a bank. And no, I don't think it's good that we have banks
financing student debt, but I sure as hell don't blame banks for doing it.

This is a fabulous example of why privatizing what should be a public service
is a terrible idea, yes, and this is the ridiculous game we get to play as a
result... blaming the bank for playing hardball over money. Really?

~~~
white-flame
_> privatizing_

The core of the issue is still the university tuition rates, and universities
involved are usually not privatized. These public institutions have become
profit centers, benefiting from the captive audience of young career seekers,
and cranking up administration overhead costs in their budgets to absorb the
increased amounts of loan money available to prospective students.

Loans are always hardball business, and student loans are no different
(although this case is clearly false advertising). The fact that the
government sought to get more university degrees into the hands of citizens by
increasing loan availability and size is the short-sighted idiocy that helped
bootstrap this mess.

~~~
jknoepfler
It's a vicious cycle imo. (cheap money -> higher tuition -> political pressure
for more cheaper money -> ...)

------
VonGuard
My wife and I have dealt with these goons before. Their favorite trick is
missing a payment, leaving it on a desk and then despoiting it weeks later,
after charging fees. Or, if you have 2 loans, they are sure you never pay any
of them down, even if you literally tell them (pay loan #1 all of this months
payments, ending it). They purposefully screw up...

All roads lead to money in politics allowing them to do whatever they want and
not have repercussions.

------
kchoudhu
Why is a student loan servicer any different from a mortgage servicer? I don't
go to my mortgage servicer for leniency or charity; why should my student loan
servicer be any different?

If we want student loan servicer behavior to change, we need to legislate it.
Just like we did (or didn't, depending on your point of view) for mortgage
servicers.

~~~
jimktrains2
Not to actually argue for or against, but mortgage holders don't hand 5 or 6
figures of unsecured debt to an 18 year old without any due diligence on if
the loan has a chance of being repaid.

~~~
kchoudhu
Student loan servicers are guaranteed repayment by statute. They are in a much
easier business than mortgage lenders.

That said, Navient is in the business of collecting on debts, and they have
every right to do so within the bounds of the law. They don't owe borrowers
anything.

~~~
jimktrains2
And those statues are the only reason student loans exist. It's a laughable
idea, at the scale they are now anyway, otherwise.

I don't personally expect Navient to do anything better than follow the law; I
don't expect any help or counseling from them. In fact, I'd be suspect of any
such counsellings.

------
jnagro
when they took over my loans from salliemae they told us (in writing) that
auto-pay would transition.... then it didn't transition, and they tried to
ding me for a missed payment. what a nightmare. ultimately my issue was
resolved, but only after i filed a complaint with a team at the federal
student aid office that handles disputes that cannot be resolved through the
lender:

[https://studentaid.ed.gov/sa/repay-
loans/disputes/prepare/co...](https://studentaid.ed.gov/sa/repay-
loans/disputes/prepare/contact-ombudsman)

then a navient person in that department reached out to me almost immediately.

Edit:

You can also file complaints for general consumer financial help here:

[https://www.consumerfinance.gov/complaint/](https://www.consumerfinance.gov/complaint/)

------
givinguflac
Navient is consistently the worst company I've ever dealt with, including
Comcast.

~~~
popopobobobo
I always pay the minimum due balance on time. Haven't explored any other
features. Right now it seems ok to me.

~~~
givinguflac
I meant specifically in dealing with their customer service being
knowledgeable and honest. Of course their online payment tools work properly,
that's how they make money :). Suggestion- depending on your loan details, you
may be able to pay down debt faster by paying the 1/2 the minimum twice a
month. You're spending the same amount, but cutting down some of the interest
every time which will reduce the principle faster over time and hence also
reduce future interest accrued.

------
onmobiletemp
Maybe this is tangential but this is a theme that seems to have infected
schools themselves as well. I was recently swindled (yes, straight up
swindled) by my university. I go to a uc (not riverside or merced) and the
student health and wellness center literally swindled me out of almost a
hundred dollars by using fine print. To protect my anonyminity i wont go into
details but rest assured a called every authority i could and nothing was
done. Consider that and then look at the swelling administration, lack of
class availability, the sheer cost of attending and finally and most
importantly the lack of meaningful learning. Its all a huge scam. But you need
a degree if you want to have a high quality of life (unless youre exceptional
in some way which the average dude is of course not) so nobody can do a damn
thing about it. Fuck this shitty sytem.

------
ikeboy
>“What this means for the Education Department is that it needs to fire
Navient,” Bergeron said. “Damn the costs.”

This is literally how costs go up. "OMG we need this, damn the costs" "OMG why
does everything cost so much, why is the debt so high?"

------
jorblumesea
Everyone, if you are with any major big loan lender, please consider
refinancing under So-Fi or others.

~~~
thoughtpalette
I've heard you lose a lot of rights refinancing that way.

~~~
jorblumesea
Really? Any links/citations/posts? Curious about this.

Also debatable as to whether you had those rights in the first place (see:
this thread)

~~~
rhino369
You lose the ability to use the (very generous) income based repayment plans.

~~~
jorblumesea
Ah interesting. Didn't know that. Thanks!

------
jm__87
Honestly, this is a private corp acting in its own best interests under the
law. Everyone here complaining that Navient is horrible... this is what
capitalism is. If you don't like the law, talk to your congressman/senators
and get the law changed.

IMHO the schools are the bad guys here.. they are taking advantage of a
situation where the government will just hand loans to everyone and there is
no way they can lose. Why not just make an undergraduate degree a public good
at this point. Taxpayers are already paying to bail all these people out, it
is partially a public good already except the students who hold all the debt
have to go through hell and Navient gets a cut of the taxpayer money in the
process.

~~~
lr4444lr
Exactly. This is blaming the vultures who pick at the carcasses for the
predators who set the traps.

------
necessity
Government launches a mass amount of federal student loans, demand skyrockets,
offer does not, prices skyrocket. Basic economical interference.

------
ryanalam
So does anyone know where to find stats on student debt amounts outstanding,
the maturity schedules, and the proportion of variable rate to fixed rate
debt? I'm curious to see how vulnerable the country is to default risk should
interest rates move upward or some other shock to the economy take place.

------
loblollyboy
Anyone here know if this whole mess is going to end badly?This is something I
google a lot as I kind of don't want to pay, but I suffer from selection bias
and HN usually has good insight on things.

~~~
Neliquat
Why not focus on prospering instead of avoiding dues?

------
koga-ninja
The way I see it, maybe there is a misunderstanding going on, Or maybe
Navient's publicity materials are too touchy-feely.

According to the article, Navient is a private company, So shouldn't they have
an expectation of return on Investment. This is not the U.S. government, which
may Forgive debt.

Another point is why the hunger for expensive education, Which may be a
Marxist critique, but since when did A credential make you a better software
designer.

People are dying all over the globe, and we are worried About the top 20
percent wage earners of the superpower USA.

------
kevmo
Institutionalized debt slavery.

------
elastic_church
When public agencies push for more than kickback money, they always run the
risk of being declared unconstitutional in a costly court battle that at best
case undermines the agencies' budget.

The CFPB is young and they might have bat higher than they should have.

Take a page out of the SEC playback and settle for kickbacks.

------
gorbachev
Calling Anonymous. Retrain your targets.

------
fapjacks
So we shouldn't believe something an enormous corporation says? Shocking.

~~~
blimblam
I take it you have no student debt?

~~~
fapjacks
No, I don't. But why would that matter? This is yet another story about yet
another enormous business lying about putting the interests of their
"customers" first.

------
alistproducer2
Student loan money is awesome. Go to a state school, pay for school with PELL
grants and working. Take the loan money and bank/invest/refinance stuff with
it. The interest doesn't start accruing until after graduation so until then
it's free money. The worst thing you can do with it is actually pay for school
with it, especially an expensive private school for a degree with uncertain
job prospects.

~~~
djrogers
Investing with borrowed money that you legally cannot default on is not a good
plan...

