Trying to generate more millennial appeal, Hillary Clinton has become critical of a student loan servicing company.
Clinton said that Navient Corporation, a major contractor to the Department of Education, has been “doing some really terrible things” and called its behavior “outrageous,” according to The Huffington Post.
Like most Clinton positions, that is tested ground. Navient has been under scrutiny from the Justice Department and the Consumer Finance Protection Bureau for various allegations of overcharging and misleading borrowers.
Sympathy for student loan servicing companies is in short supply, and they tend to get exempt, via the Department of Education, from rules about annoying practices such as robocalling. What they do tends to be authorized through the department until outside scrutiny adds pressure to their debt collection.
Clinton is signaling to student loan debtors that she’ll be tough on those sorts of practices. While she won’t go as far as Bernie Sanders will in promising free college for all, she wants to make clear that she’ll make college affordable, and protect borrowers against vulture-like debt servicing companies.
The Department of Education pays about $800 million annually to those companies through contracting, defending the practice as an efficient way to collect student loan payments and help students avoid default. Otherwise, the department would have to expand to collect the debt.
Other prominent Democrats, such as Senator Elizabeth Warren, have demanded the Justice Department to investigate charges against Navient. In the face of her critics saying that she’s friendly toward Wall Street and corporations, Clinton has emphasized her progressive bona fides.
