I agree with your paragraph 1, not with paragraph 2. The US Dept. of Ed. could have come up with any number of solutions including outright forgiveness, work programs, access to cheap fee-based financial planners, more scholarships, changes to the tax code for the borrowers, or hiring incentives for employers. Instead, it chose to sell it off the debt in order to keep the accounting balanced under the desired time frame.
Navient should pay what the court compels it to if outright deception is found, but let's not overstate their role in the general problem around the structural non-sustainability of federal education loans, and the short-sightedness executive decision to spin off the liabilities into private hands.
I don't think we necessarily disagree - you think outsourcing the liabilities was a bad move, presumably because in private hands, collections will be ruthless... I'm complaining about the same point. I just see no reason why "private actor" must imply ruthlessness. The terms of the contract or laws governing the collection of gov't loans could be written to enforce a fiduciary-like expectation into the arrangement.
Navient should pay what the court compels it to if outright deception is found, but let's not overstate their role in the general problem around the structural non-sustainability of federal education loans, and the short-sightedness executive decision to spin off the liabilities into private hands.