Seven Reasons Borrowers Want Sec. DeVos to Fire, Not Hire Navient
Navient, which two states and the Consumer Financial Protection Bureau (CFPB) recently sued, holds loans for one in four student loan borrowers while maintaining a notorious record for cheating students at every stage of repayment. The Department of Education should act in the interest of borrowers and fire Navient. Their multi-million dollar contract deserves to go to servicers that believe they have an obligation to work in the best interest of borrowers.
- In January, 2017, the Consumer Financial Protection Bureau (CFPB) announced it was suing Navient for choosing “to shortcut and deceive consumers to save on operating costs” and for “illegally cheat[ing] many struggling borrowers out of their rights to lower repayments.” In essence, Navient is being sued for steering borrowers into forbearance and putting profits over their borrowers’ wellbeing.
- In response to the 2017 litigation, Navient CEO Jack Remondi stated: “There is no expectation that the servicer will act in the interest of the consumer.” This stands in stark contrast to his prior claims, like when he said: “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances.”
- In April, 2017, the CFPB released a monthly snapshot on student loan complaints that details more misbehavior by the company—the report found that Navient was both one of the top three overall companies that received the most complaints from November 2016 through January 2017, as well as one of the top three complained-about student loan-related companies in the same time period.
- Navient has been under fire for longer than this calendar year, however. In May, 2015 the U.S. Department of Justice announced that 77,795 service members would begin receiving $60 million in compensation for having been charged excess interest on their student loans by Navient.
- And in August, 2015, Navient revealed in a Securities and Exchange Commission (SEC) filing that the company’s wholly-owned subsidiary Navient Solutions Inc. (NSI) could be party to a CFPB lawsuit regarding its servicing practices.
- Additionally, in July, 2014, nine Democratic Senators announced they were looking into the Department of Education’s decision to extend a contract with Navient, which was under fire for allegedly overcharging borrowers.
- Navient’s record should be of great concern to student loan borrowers everywhere with Sec. Betsy DeVos wielding the power to select the Department of Education’s next sole servicer—Navient is one of three finalists for the contract, despite past performance. With DeVos’s known ties to a debt collection agency in business with the Department of Education, and her decisions to set predatory collectors loose on borrowers in her first few months in office, there’s cause for serious worry.
Posted on 25 May 2017