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No More Excuses: Sen. Warren Lambastes DOE on Student Loans

Democrat from Massachusetts says US Department of Education goes to 'extraordinary lengths' to protect student loan companies—at borrowers' expense

In January, Elizabeth Warren was among a group of Senate Democrats who unveiled a legislative package to address college affordability. (Photo: Senate Democrats/flickr/cc)

Can the U.S. Department of Education be trusted to protect the millions of Americans with federal student loans?

U.S. Sen. Elizabeth Warren (D-Mass.), who has tussled with the federal agency before, isn't so sure.

She said as much in a letter (pdf) sent Thursday to acting Education Secretary John King Jr., in which she describes an independent audit published this week as "a stunning indictment of the Department of Education's [DOE] oversight of student loan servicers, exposing the extraordinary lengths to which the Department will go to protect those companies when they break the law."

Warren's letter was in response to a DOE inspector general's report (pdf), which found that the agency conducted a deeply flawed investigation of its student loan servicers—companies like Navient, which collect borrowers' monthly payments—and knowingly misled the public about the findings.

In fact, she said, the review released Tuesday raises "serious questions about whether the Department and its Office of Federal Student Aid can be trusted to protect the millions of borrowers under its care."

There's something in the air...

As the Huffington Post explained, the latest controversy "was prompted by a 2014 Justice Department lawsuit accusing Navient of violating the Servicemembers Civil Relief Act by intentionally and systematically overcharging troops on student loans for nearly a decade." To have done so would have constituted a violation of their contract.

At the time, then-Education Secretary Arne Duncan said a DOE probe would help determine whether Navient got to keep its contract.

Instead, HuffPo writes,

the department renewed the contract before it completed its investigation. Last year, after the Education Department gave Navient a new contract and a pay increase, it cleared Navient and its other major loan contractors of wrongdoing in what its inspector general described this week as a bogus investigation marred by errors and other anomalies.

"To date, the department has done nothing but generate excuses for why it will not act to hold Navient accountable, and has put no serious effort into trying to remedy—or even identify—this problem to the extent it occurred," Warren said in her letter.

A press statement from Warren's office notes that King was recently nominated to serve as Education Secretary and his nomination is being considered by the Senate Health, Education, Labor and Pensions (HELP) Committee, on which she sits.

To that end, her letter includes more than two dozen "Questions for the Record," directed toward King.

Question Number 25 is deceptively simple: "What's the Department's full explanation for how this happened," it reads, "and how will the Department ensure that this never happens again?"

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