The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Pigs at the Trough:
Student Loan Servicers

Feb 18, 2019

An audit found that companies hired by the U.S. Department of Education to service student loans made too many “mistakes,” and that the Education Department routinely “overlooked” them.

It’s nothing new. Last year, for example, the Government Accountability Office (GAO) reported that companies servicing student loans had rejected MORE THAN 99 PERCENT of the people who had applied for a loan forgiveness program for government workers. And, sure enough, the GAO at the time also called the companies’ outrageous behavior “mistakes.”

Who would call something that happens 99 percent of the time a mistake? Certainly not the people whose student loans turn into a mortgage on their life!

But the Education Department not only turned a blind eye to the companies’ “mistakes”; it apparently tried to cover it up too. The inspector general’s audit found that the department generally did not even keep a record of servicers’ mistakes, so no one even knows how many times servicers have made the same “mistakes”!

Well-connected companies, and government officials at their service, have turned the servicing of student loans into a multi-million-dollar racket – at the expense of student-loan recipients. Is it any surprise that so many people in this country are never done paying off their student loans?