CFPB sues Navient (even the feds aren’t happy with their own student loan servicers)

The Consumer Finance Protection Bureau is a nonpartisan government agency that was created after the 2008 financial crisis to help protect us from evil banks, credit card companies, predatory lending practices, etc.

They announced this week that they’re suing Navient, the biggest federal (and private) student loan servicer for defrauding borrowers and being generally terrible.

You may or may not really know or care about loan servicers, but they’re the middlemen who send you emails about making payments and take your money. Even when you take federal loan money, most people end up shuttled to one of the several private servicing companies who manage the payments. It should come as no surprise that handling that money is profitable and that unsavory companies stand to profit more if people send more money their way.

In short:

The Bureau alleges that Navient has failed to provide the most basic functions of adequate student loan servicing at every stage of repayment for both private and federal loans. Navient provided bad information in writing and over the phone, processed payments incorrectly, and failed to act when borrowers complained about problems. Critically, it systematically made it harder for borrowers to obtain the important right to pay according to what they can afford. These illegal practices made paying back student loans more difficult and costly for certain borrowers.

When people talk about trying to do clever (or even sometimes simple) things with payment timing or distributing loan payments, this is exactly why I would be hesitant to encourage them. It makes great sense to try to have extra payments go toward loans with the highest interest rate (and it’s still worth it). It makes sense to try to “time” extra payments to occur after the application of a REPAYE interest subsidy to get the best of both worlds by getting free government money while also paying down your debt as aggressively as possible (and probably not worth trying, I’d argue). It makes sense to talk with your servicer to get information about your options and make sure everyone is on the same page.

The problem is that the servicers aren’t good at servicing your debt.

I’m concerned enough about the servicers doing the basics of applying IDR-based interest subsidies for borrowers in general, and they purposely make it difficult to confirm what’s happening on their end by poorly if ever demonstrating this information on loan statements, even while they promise “they’re there” when you call. I’m deeply suspicious of any plan that involves the servicers working in borrowers’ best interests.

I’ve spoken with multiple residents steered away from the REPAYE plan through misinformation into IBR or PAYE. I don’t know how much is malfeasance or just incompetence—the people on the phone are customer service reps, not experts—but it’s nonetheless one of the downsides of having a complex convoluted federal system that even the people charged with handling it are unclear as to how to implement its policies.

Incrementalism

Atul Gawande with another fun New Yorker feature on The Heroism of Incremental Care:

Rescue work delivers much more certainty. There is a beginning and an end to the effort. And you know what all the money and effort is (and is not) accomplishing. We don’t like to address problems until they are well upon us and unavoidable, and we don’t trust solutions that promise benefits only down the road.

Incrementalists nonetheless want us to take a longer view. They want us to believe that they can recognize problems before they happen, and that, with steady, iterative effort over years, they can reduce, delay, or eliminate them. Yet incrementalists also want us to accept that they will never be able to fully anticipate or prevent all problems. This makes for a hard sell. The incrementalists’ contribution is more cryptic than the rescuers’, and yet also more ambitious. They are claiming, in essence, to be able to predict and shape the future. They want us to put our money on it.

But our free-market insurance only wants to pay for 15 minutes of it, of course.

 

As an American surgeon, I have a battalion of people and millions of dollars of equipment on hand when I arrive in my operating room. Incrementalists are lucky if they can hire a nurse.

and

The difference between what’s made available to me as a surgeon and what’s made available to our internists or pediatricians or H.I.V. specialists is not just shortsighted—it’s immoral.

When people think about rationing care, they talk about rationing care to people. About grandma not getting a pacemaker or a new hip. They speak disparagingly about Canada or the UK. What people don’t realize is that we also ration care internally within medicine. We just do it based on RVUs.

Then, at the end, he finishes with some jabs at half-baked plans to repeal the ACA and a powerful somber note:

In this era of advancing information, it will become evident that, for everyone, life is a preexisting condition waiting to happen.

How to submit PSLF employment verification

The general approach for PSLF is succinctly summarized here. In order to qualify, you’ll need to prove you were gainfully employed at a qualifying institution for 120 payments. That means you’ll need to account for 10 years of working life. The Feds recommend you certify your employment every year, which sounds like a pretty good idea if you ask me (there’s a lot of money at stake here, after all). At the least, you should get a form filled out at the end of your tenure at any institution (preliminary/transitional intern year, residency, other jobs, etc.). You don’t want to be asking random people to look back at employment records buried in some offsite file cabinet from your intern year 9 years ago when it comes time to file for forgiveness. It’s asking for trouble.

The steps are simple:

  1. Download the Public Service Loan Forgiveness Employment Certification Form.
  2. Fill it out. It’s extremely straightforward. Mail, email, or fax it to your former or current employer.
  3. Wait to get it back.
  4. Get it back.
  5. Send it to FedLoans, the official servicer of the federal government (address is on the form).
  6. Fedloan processes the form. If you are not currently serviced by Fedloan, your loans will be transferred from your current servicer. If you already consolidated, you’re probably with Fedloan already. Whether a new development or not, Fedloan will process your forms and update the “qualifying monthly payment” count based on the months of qualifying payments matched to months of verified employment.
  7. Rinse and repeat. Again, it may be beneficial to resubmit annually, but at the least, it’s a good idea to submit an employment verification form after moving on from each qualifying job. A) Paperwork only gets harder over time and B) You want to make sure everything is on track and Kosher before making any more financial decisions that might be based a misunderstanding of where you stand currently on the PSLF track.
  8. After you make that 120th payment, send in the final form. Unless the government has swindled you in a truly magnificent way, get ready to see something magical.

The Calm Company

Amidst desires for simultaneous growth, quality, profit, and patient satisfaction, the delivery of healthcare has gotten more…complicated. But the disconnect between the powers that be and the providers who actually work on the ground has turned work for big hospitals and institutions into something increasingly more like working for a big widget factory.

Spurred by rising costs, healthcare in the US has felt the need to “catch up” with the “best” business practices. Have more meetings. Look at more processes. More management. More managers for the managers we just hired.

A few bits from the intro to the forthcoming book, The Calm Company, on Signal v. Noisethe blog from 37Signals (the company behind the team management software Basecamp):

Work claws away at life. Life has become work’s leftovers. The doggy bag. The remnants. The scraps.

You’d think with all the hours people are putting in, and all the promises of tech’s flavor of the month, the load would be lessening. It’s not. It’s getting heavier.

Technology has been used to add capacity, not to improve workflow. As an example, MyChart is a great tool that allows patients to communicate with clinics and providers without calling repeatedly or making an appointment just for a routine refill or to answer a simple question. But you don’t get paid to answer MyChart messages. They’re added on to your workload. The more you’re willing to meet patients where they are and do things on MyChart, the more unpaid work you do and the more time and energy you lose. That’s a system flaw. This is part of why the average physician spends 1-2 hours at home charting daily. More uncompensated time.

Crazy companies all tend to be especially great at one thing: wasting. Wasting time, attention, money, energy.

The answer isn’t more hours, it’s less bullshit. Less waste, not more production. And far fewer things that induce distraction, always-on anxiety, and stress.

I am routinely impressed at how good healthcare systems are at wasting dollars to save cents. Skimping on cheap patient transporters so that highly paid specialists sit around waiting for the next case to start and then run overtime. Understaffing clinic nurses and MAs, leaving the physicians to deal with more phone triage and data entry. The money in some cases comes from different pots, which sometimes allows departments to seem more profitable or efficient than they really are.

Hospitals make changes like real enterprises do but mostly without the critical reflection to see if process improvements are actually improvements. We tokenize quality through small projects to avoid dealing with foundational infrastructural failures—because those are actually hard.

On-demand is for movies, TV shows, and podcasts, not for you. Your time isn’t an episode recalled when someone wants it at 10pm on a Saturday night, or every few minutes in the collection of conveyor belt chat room conversations you’re supposed to be following all day long.

Employer verification: the lynchpin of PSLF

The week of Christmas, the NYTimes published a story about people who anticipated their loans being forgiven this year with PSLF and are now in the midst of a legal battle instead.

The suit, filed in United States District Court for the District of Columbia, says some borrowers received approval on their certification forms, then, years later, the entity servicing their loans reversed course, effectively ousting them from the program.

It did so retroactively, meaning that none of the previous loan payments counted toward the 120 payments needed to qualify for forgiveness. So if the borrowers took a job that qualified, they would have to start again with accumulating the payments.

The silver lining is that—though not 100% clear from the article—it appears these denials were all for jobs that were not 501(c)(3) non-profits. They were for other non-501(c)(3) non-profit jobs, which only count toward PSLF when they provide certain types of qualifying public services and are approved on a case by case basis. I have no doubt there are doctors who are planning on PSLF that will find themselves shocked and disappointed by technicalities, but so far there’s no evidence that the usual employment catchalls (government or 501(c)(3) organizations) for PSLF will be spontaneously denied.

These are eligibility criteria for PSLF-eligible employers:

  • Government organizations at any level (federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Other types of not-for-profit organizations that provide certain types of qualifying public services and must not be a business organized for profit, a labor union, a partisan political organization, or an organization engaged in religious activities.

Qualifying public services include:

  • Emergency management
  • Military service
  • Public safety
  • Law enforcement
  • Public interest law services
  • Early childhood education (including licensed or regulated health care, Head Start, and State-funded pre-kindergarten)
  • Public service for individuals with disabilities and the elderly
  • Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics)
  • Public education
  • Public library services
  • School library or other school-based services

So, it is the private nonprofits offering “qualifying” services that are the category at greatest risk for being denied. If your job isn’t a 501(c)(3) but “should” qualify, submit your employment verification forms annually to prevent wasting your time and money planning for forgiveness that may forever remain out of reach.