The possibility to gain education depends on several factors, and frequently, one’s knowledge is not the most decisive of them. Families of many young people in the US and other countries of the world cannot afford higher education for their children and need to take loans for which they have to pay many years after graduation. There are different programs designed for such purposes in the US. Companies offer students or their parents to sign a contract by which they pay off the debt later. However, there are cases when such loan organizations do not treat their clients justly. The paper will discuss a scandal surrounding one of the student loan giants, Navient. It is argued that students’ families that present one of the opposite sides of the dispute have more support to defend their position than Navient does.
Background of the Issue
A video presented by NBC Nightly News (2017) tells the story of Matt Portwood, a young man who took a loan from Navient (formerly known as Sallie Mae) to be able to afford his college education. However, after the death of his father, Matt could not return the debt due to the interest that “jumped” to 21% (NBC Nightly News, 2017). When he realized that he could not afford the new sum, Portwood addressed Navient, where he was advised to stop paying temporarily. They called the option “forbearance (NBC Nightly News, 2017). What they did not mention was that the interest would still be growing even during the forbearance stage. Thus, what was initially a loan of $41,000 turned into $127,000 (NBC Nightly News, 2017). The problem that occurred urged Matt to seek some legal advice since the man could not manage the situation by himself.
Arguments to Support the Chosen Side
It seems reasonable that Portwood filed a lawsuit against the company. Navient’s employees should have warned their borrowers about interest rates. The organization behaved unethically by not letting its clients know the real situation in which they would find themselves in case they agreed to cooperate with Navient. Portwood’s case is not exceptional. Recently, Navient has faced several lawsuits from alarmed and disappointed parents who had co-signed loans with it (Yerak, 2017). It is reported that the Consumer Financial Protection Bureau received more criticism of Navient over 2017 than about any other organization in any other industry (Yerak, 2017). Navient’s business practices started to be questioned not only by students’ parents but also by authorities and legal offices.
Although it seems logical to blame Navient, some students and their parents also feel guilty for not having asked more questions about interest rates (NBC Nightly News, 2017). However, there was no fault of theirs in the situation. Clients could not have predicted that Navient would increase interests without warning them. It was impossible to come up with a question like “Do you plan to increase interest rates at a scale different from what was stated in the contract?” Therefore, it was only the loan giver’s decision and accountability to inform its clients about the future changes.
Conclusion
Taking into consideration the number of complaints against Navient and the seriousness of their character, it seems obvious that students’ families have more support to defend their argument. Thus, the concluding statement is that Navient is to blame for the unhealthy situation with loans, and it should reimburse for the expenses of students’ families that suffered from the company’s unethical conduct.
References
NBC Nightly News. (2017). Student loan giant “Navient” facing lawsuits over lending and repayment practices [Video file].
Yerak, B. (2017). Student loan giant Navient under fire for mistreating borrowers. The Seattle Times.