Navient announced that they are giving up on servicing student loans and transferring all accounts to another servicer “Maximus” by early October. The request to give up their servicing accounts must be approved by the government. Student loans have been a source of trouble since covid-19 started and with the rolling forbearances still in the market until 2022 servicers aren't excited for the future. Many consumer advocates also believe that once full payments start again there will be many problems in the marketplace as people simply will not start paying. Paid consultants on behalf of servicers believe there will be a “psychological” barrier to begin payments again, but the reality is that the major barriers will be financial. Simply stated, people were struggling with student loan payments before covid-19, so things will probably be worse for most consumers when repayments begin.  

Consumer advocates warn of coming harm to borrowers who will experience numerous disruptions and account issues as files get transferred over. Moreover, new policies from new servicers, new due dates, new payment platforms will inevitably cause major problems that will likely result in damaged credit and other negative consequences.

It is well past time for all outstanding student debt to be cancelled and to give consumers relief that will result in numerous benefits to the individual and family budgets but also to the economy in general. Student loans have been a drag on the economy for everyday consumers for decades. The average student loan is the equivalent of borrowing $500,000 to buy a $100,000 house and wiping out student debt for everyone would give the economy a boost unseen in decades. But the stimulus of wiping out debt would go to the consumers holding the student debt and not to the companies making money off the interest payments. This is not a complicated issue.