Gretchen Morgenson is the New York Times' best columnist. Week after week, she writes with clarity and precision about the shady dealings of our nation's financial industry. In fact, in some issues, Morgenson's column is the only writer worth reading in the Sunday Times.
Thus, I was pleased when I opened the Business Section of yesterday's Sunday Times and saw Morgenson's column on the student-loan servicing industry. As she pointed out, the U.S. government pays 11 companies a total of $600 million a year to service millions of student loans. And these companies are doing a terrible job.
A recent report by the Consumer Financial Protection Bureau, which Morgenson summarized, analyzed numerous complaints by student-loan borrowers. The loan servicing companies are giving out misinformation, failing to record loan payments properly, and failing to tell borrowers about payment options that might help them stay out of default.
In short, it's a mess. I hope Ms. Morgenson digs deeper into the activities of the loan servicing companies. Here are some questions I have: Who are the senior executives of these companies: Navient, Discover Bank, Great Lakes, and the rest? What is the annual compensation of the fat cats who run the companies that are mishandling the loan-collection process? Are these companies making campaign contributions to key federal legislators? If so, which Congresspeople are getting the money, and how much?
And I would really like Ms. Morgenson to turn her attention to Educational Credit Management Corporation, the most prominent company that opposes bankruptcy relief for student-loan debtors. The Times recently published a story about ECMC's ruthless tactics in the bankruptcy courts, and it ran another story about ECMC's tactics in the Roth case, involving an elderly woman with chronic health problems who was living on Social Security checks of less than $800 a month.
How much does ECMC's CEO make? We know that former CEO Richard Boyle made $1.1 million in 2010. What is the current CEO's annual compensation to run a company that hounds oppressed student-loan debtors? And to whom is ECMC making campaign contributions?
A lot of good investigative reporting needs to be done about the student-loan industry. And Gretchen Morgenson is probably the best person to do it. Go for it, Gretchen!
Tara Siegel Bernard. Judges Rebuke Limits On Wiping Out Student Loan Debt. New York Times, July 17, 2015. http://www.nytimes.com/2015/07/18/your-money/student-loans/judges-rebuke-limits-on-wiping-out-student-loan-debt.html
Natalie Kitroeff. Loan Monitor Is Accused of Ruthless Tactics on Student Debt. New York Times, January 1, 2014. http://www.nytimes.com/2014/01/02/us/loan-monitor-is-accused-of-ruthless-tactics-on-student-debt.html
Gretchen Morgenson. A Student Loan System Stacked Against the Borrower. New York Times, October 9, 2015. Accessible at http://www.nytimes.com/2015/10/11/business/a-student-loan-system-stacked-against-the-borrower.html
John Hechinger. Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans. Bloomberg.com, May 15, 2013. Accessible at: http://www.bloomberg.com/news/2012-05-15/taxpayers-fund-454-000-pay-for-collector-chasing-student-loans.html