JP Morgan office building located in Houston.
Borrowers with a student loan through JPMorgan Chase & Co., take note: the company is selling a $6.9 billion portfolio of student loans to Navient according to a Navient press release.
In 2013, JPMorgan decided to stop dealing with student loans. And just last week, it told its shareholders that it wanted to unload the holdings which includes around $3.7 billion in federally guaranteed student loans and about $3.2 billion in whole private education loans.
The largest student loan servicing company in the country, Navient, is currently embroiled in a federal lawsuit with the Consumer Financial Protection Bureau (CFPB) alleging that the company "systematically and illegally" failed borrowers. In its response, Navient claims there is no expectation that the servicer will act in the best interest of the consumer, and Navient continued to assert that borrowers simply shouldn’t rely on it to counsel them about their options because its main role is to collect payments.
Yet a survey by The Student Loan Report finds that borrowers don’t seem to have issues with the company—although 75 percent say they haven’t heard about its legal troubles. With that in mind, 66 percent don’t feel that Navient has deceived them. And respondents scored their overall relationship with Navient at 5.72 out of 10. Though not stellar, it could be worse.
Currently, 44 million Americans are carrying student loan debt, and roughly one in four of them are either in default or struggling to stay current. Though it may not be Navient, it seems obvious that borrowers need companies to guide them through the repayment process.
At any rate, the issues with Navient point to a much bigger issue that sits behind the scenes on student debt. Financial literacy is a significant driving factor in the student loan issue. Some lawmakers are already taking this into consideration; for instance, state politicians from Indiana supported a bill that would educate student borrowers on their loans and obligations in the future.
Image Copyright © Chris O'Brien