The federal government and Washington state allege that student loan servicer Navient has engaged in predatory business practices beyond its usual predatory business practices. Combining greed and ineptitude, the lawsuit argues, Navient misled consumers and cut corners to such a degree that the integrity of their system is called into question. The suit accuses Navient of telling customers to pay more than was required, discouraging the use of income-driven federal loan programs, and just putting the loans in the wrong goddamn places.
This would be a big story even without the conspicuous timing, but pursuing this action in the final hours of the Obama administration compounds the political elements at play. The lawsuit has been filed by the Consumer Protection Bureau, whose own existence is a serious partisan issue, and Navient dismisses the allegations as political theater. How this will play out under a Trump administration–and a Republican Congress–is uncertain.
For what it’s worth, Trump has laid out plans to ease student loans that are essentially just the REPAYE program of the Obama administration with some tweaked numbers, but would anyone be shocked if he abandoned this bit of populism too the moment he takes office? The confirmation hearings for Betsy DeVos could have clarified things, but since the hearings were so focused on bear attacks, we don’t have a clear answer.
Regardless, this is something to keep tabs on, because the implications could be significant, whether anything comes of it or not.