The saga of Sallie Mae and Navient

Ronald Reagan famously said that the nine most terrifying words are: "I'm from the government and I’m here to help". The saga of Sallie Mae and Navient illustrate that quote to perfection. If you've been hearing news about Navient being sued you might not understand the tangled web unless you or someone you love has a loan serviced by them. A little history: Sallie Mae was originally a government agency that was set up to guarantee student loans and service them for the banks. Banks were understandably reluctant to loan money to young college students. Then, Sallie Mae became a private company with a government contract. Most recently, in 2014, Sallie Mae spun off the student loan part of its business to Navient who collects student loan payments on behalf of the Department of Education. A distinction without a difference to most of us. As of Feb. 2014 Navient was expected to service $300 billion in student loans. 6 months prior to Navient taking the lead, student loan interest rates for new loans doubled to 6.8%, a rate higher than car loans or home mortgages. Perhaps sweetening the pot? This from an administration that was promoting free community college for all. Bloomberg says, "The US government's $1.3 trillion student loan program has a dizzying array of repayment plans---." The suit alleges that Navient gave bad advice and information to borrowers. Did no one see this coming?