Warren demands student loan servicer Navient pay feds $22M
In 2009, Navient, then known as Sallie Mae, overcharged the federal government by $22.3 million by abusing a program intended for smaller lenders
Sen. Elizabeth Warren, in a letter to Secretary of Education Betsy DeVos, urged the federal government to collect $22.3 million that it’s owed by one of the biggest student loan servicers in the country.
In 2009, an Education Department investigation found that Navient, then known as Sallie Mae, overcharged the federal government by $22.3 million by abusing a program intended for smaller lenders. Warren, a leading Democratic presidential candidate, pressed DeVos to collect those funds.
“Navient has inexplicably continued to escape accountability for bilking taxpayers for years and still has not repaid this money,” Warren wrote in the letter. “Further delays or excuses are unacceptable.”
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Navient, the third-largest student loan lender in the U.S. managing about $300 billion in federal student loans for roughly 6 million borrowers, had improperly claimed special allowance payments on student loans that were not eligible for those rates, the investigation found. It was asked by the Office of the Inspector General (OIG) to return the money to the department. In 2013, the OIG issued a final determination, demanding that Navient pay the money back, but it has not.
For six years, Navient has “wasted more taxpayer dollars” by appealing the determination, Warren alleged.
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She also took a swipe at DeVos, who’s faced scrutiny for several policy stances that critics say favor the student loan industry, including requiring defrauded borrowers to repay a portion of their debts and restricting Consumer Financial Protection Bureau (CFPB) access to information on loan servicers.
“This matter now sits on your desk waiting for you to act,” Warren wrote. “Navient owes taxpayers $22.3 million; you have a responsibility to the American people to ensure the company pays back the money it improperly collected. Letting Navient off the hook for its debts, particularly as you relentlessly hound defrauded student borrowers, would be a blatant demonstration of your willingness to side with loan companies that fail students and taxpayers over students and taxpayers.”
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Warren wrote a similar letter to the Obama administration in 2016, though it ultimately produced no results.
It’s not the first time that Navient has come under the federal limelight. In 2017, the CFPB sued Navient, claiming it “systematically and illegally” failed borrowers at “every stage of repayment.”
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