Naked Capitalism has the story Student Loan Servicer Corruption Rewarded, Covered For in New Round of Obama Executive Actions.
You literally have the Administration going around the servicers to do their job for them, while also paying the servicers more to encourage better performance. And the servicers have already proven themselves to be criminals! Why are they even still in the equation? Why are the same servicers getting the contracts?
(FYI, the last part of the executive memorandum is about stronger financial literacy for borrowers before they take out the loans, and we all know that simply doesn’t work well.)
This is another example of this White House working to prop up a broken, corrupt existing system rather than working to overhaul it. The student loan debate is a sideshow compared to actually reducing the cost of higher ed, as organizer Melissa Byrne so compellingly points out. But trusting the same fraudulent actors in the servicing arena to better serve the customers they bilked, and then covering for them with all these add-on efforts, inspires no confidence that we’ll ever get to the meaningful solutions on the other side.
Well that surely put a quick end to the euphoria of my previous posts Obama Sidesteps Congress to Expand Student Loan Repayment Program and Elizabeth Warren On President Obama’s Relief on Student Loans.
Maybe the refrain from the fraudsters is, “Don’t take it personally. Trying to cheat you was just business. This time you can trust us to not look for sneaky ways to make more money.”