Debt, whether it comes from credit cards, auto loans, medical bills or other sources, continues to be a top cause of financial strain for people in Eugene and elsewhere. Student loan debt also falls into this category. In fact, student loans can be more difficult for consumers to deal with, since, unlike credit card debt, federal student loans cannot be discharged through bankruptcy in most cases.
Recently, the Illinois Attorney General sued banking giant Sallie Mae Bank and one of the nation’s largest student loan institutions, Navient Corporation, among several other firms. The lawsuit accused these lenders of repeated abuses against those borrowing for their educations, resulting in billions of dollars in consumer debt. The United States Consumer Financial Protection Bureau also filed a lawsuit against Navient, stating that the institution did not adequately handle complaints and made it difficult for borrowers to repay their loans.
Sallie Mae and Navient are alleged to have approved student loans that were “designed to fail,” and included exorbitant fees and interest rates. Additionally, the institutions were accused of failing to tell troubled borrowers about repayment options based on income and of increasing their overall loan burden when they sought help.
The result of these lawsuits remains to be seen. The fact remains, however, that those who are fresh out of college may have difficulty making enough money to cover their loans and other expenses. Borrowers and those who are considering applying for student loans may hope that procedures will be changed to prevent student loan abuse and assist consumers in being able to repay their debt.
Source: NBC Chicago, “Madigan Sues Sallie Mae, Navient for Alleged ‘Student Loan Abuses,’” Jan. 18, 2017