SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
U.S. Sen. Elizabeth Warren (D-Mass.) speaks on student debt at the AFL-CIO on June 22, 2022 in Washington, D.C. to address "the importance of student debt cancellation for American workers." (Photo: Alex Wong/Getty Images)
Warren Condemns Deceptive and 'Outrageous Behavior' by Student Loan Giant Navient
"While families breathe a sigh of relief, corporations that made billions off a broken student loan system are now busily laying new traps in a shameless, last-ditch effort to try to line their pockets," said the Massachusetts Democrat.
Sep 14, 2022
Sen. Elizabeth Warren castigated student loan servicing companies like Navient on Tuesday over what she characterized as deceptive "traps" being laid for federal student loan borrowers in the wake of President Joe Biden's recent announcement to cancel up to $20,000 in such debt.
"While families breathe a sigh of relief, corporations that made billions off a broken student loan system are now busily laying new traps in a shameless, last-ditch effort to try to line their pockets," Warren (D-Mass.) said during a hearing of the Senate Banking, Housing, and Urban Affairs Committee.
In an exchange with Rachel Gittleman, the financial services outreach manager for the Consumer Federation of America, Warren detailed that some borrowers who are customers of Navient--who the senator referred to as "one of the world's largest and worst loan servicers"--had recently received offers from the company to refinance their federal loans into lower-interest loans with NaviRefi, the company's private loan arm, but only disclosed in the fine print of the agreement that this could lead to disqualifying from Biden's debt cancellation plan.
While noting that it remains unclear which borrowers and how many received these notifications, Warren said that "instead of sending borrowers information to help them get the cancellation that they be entitled to, Navient pushed borrowers towards loans that could, at best, complicate their ability to get cancellation."
Warren then asked Gittleman if companies like Navient make more or less money if student borrowers who use their services receive debt cancellation.
"The future of Navient's lending business depends on its ability to take the most credit-worthy people with federal student loans and refinance them into private loans," responded Gittleman. "Every borrower who is debt-free as a result of President Biden's action is one fewer prospective customer for Navient."
"More broadly," she continued, "the better the deal the federal government offers borrowers with federal student loans, the less opportunity Navient has to sell people its private loans."
Warren said this was "outrageous behavior" by Navient, which is why she has asked the company and other student loan servicers in the industry "what steps they're taking to ensure that consumers receive timely and accurate information about their loans and their eligibility for cancellation."
Earlier this week, Warren joined Rep. Ayanna Pressley (D-Mass.) in a letter to Navient CEO John Remondi asking him to explain reporting about the company's recent conduct and alleged attempts "to scam borrowers out of student debt relief by encouraging them to refinance their loans" with NaviRefi.
The two lawmakers called on Remondi to provide answers to a list of key questions about the issue with a detailed and full response no later than September 26.
"We're putting the servicers on notice," said Pressley in a statement on Monday. "It's imperative that servicers provide borrowers with accurate and up-to-date information on their student loans."
"Thanks to President Biden's plan to cancel student debt," she continued, "millions are now eligible for meaningful student loan debt cancellation and we need to ensure it is administered efficiently and felt by as many people as possible. Senator Warren and I want answers."
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Sen. Elizabeth Warren castigated student loan servicing companies like Navient on Tuesday over what she characterized as deceptive "traps" being laid for federal student loan borrowers in the wake of President Joe Biden's recent announcement to cancel up to $20,000 in such debt.
"While families breathe a sigh of relief, corporations that made billions off a broken student loan system are now busily laying new traps in a shameless, last-ditch effort to try to line their pockets," Warren (D-Mass.) said during a hearing of the Senate Banking, Housing, and Urban Affairs Committee.
In an exchange with Rachel Gittleman, the financial services outreach manager for the Consumer Federation of America, Warren detailed that some borrowers who are customers of Navient--who the senator referred to as "one of the world's largest and worst loan servicers"--had recently received offers from the company to refinance their federal loans into lower-interest loans with NaviRefi, the company's private loan arm, but only disclosed in the fine print of the agreement that this could lead to disqualifying from Biden's debt cancellation plan.
While noting that it remains unclear which borrowers and how many received these notifications, Warren said that "instead of sending borrowers information to help them get the cancellation that they be entitled to, Navient pushed borrowers towards loans that could, at best, complicate their ability to get cancellation."
Warren then asked Gittleman if companies like Navient make more or less money if student borrowers who use their services receive debt cancellation.
"The future of Navient's lending business depends on its ability to take the most credit-worthy people with federal student loans and refinance them into private loans," responded Gittleman. "Every borrower who is debt-free as a result of President Biden's action is one fewer prospective customer for Navient."
"More broadly," she continued, "the better the deal the federal government offers borrowers with federal student loans, the less opportunity Navient has to sell people its private loans."
Warren said this was "outrageous behavior" by Navient, which is why she has asked the company and other student loan servicers in the industry "what steps they're taking to ensure that consumers receive timely and accurate information about their loans and their eligibility for cancellation."
Earlier this week, Warren joined Rep. Ayanna Pressley (D-Mass.) in a letter to Navient CEO John Remondi asking him to explain reporting about the company's recent conduct and alleged attempts "to scam borrowers out of student debt relief by encouraging them to refinance their loans" with NaviRefi.
The two lawmakers called on Remondi to provide answers to a list of key questions about the issue with a detailed and full response no later than September 26.
"We're putting the servicers on notice," said Pressley in a statement on Monday. "It's imperative that servicers provide borrowers with accurate and up-to-date information on their student loans."
"Thanks to President Biden's plan to cancel student debt," she continued, "millions are now eligible for meaningful student loan debt cancellation and we need to ensure it is administered efficiently and felt by as many people as possible. Senator Warren and I want answers."
Sen. Elizabeth Warren castigated student loan servicing companies like Navient on Tuesday over what she characterized as deceptive "traps" being laid for federal student loan borrowers in the wake of President Joe Biden's recent announcement to cancel up to $20,000 in such debt.
"While families breathe a sigh of relief, corporations that made billions off a broken student loan system are now busily laying new traps in a shameless, last-ditch effort to try to line their pockets," Warren (D-Mass.) said during a hearing of the Senate Banking, Housing, and Urban Affairs Committee.
In an exchange with Rachel Gittleman, the financial services outreach manager for the Consumer Federation of America, Warren detailed that some borrowers who are customers of Navient--who the senator referred to as "one of the world's largest and worst loan servicers"--had recently received offers from the company to refinance their federal loans into lower-interest loans with NaviRefi, the company's private loan arm, but only disclosed in the fine print of the agreement that this could lead to disqualifying from Biden's debt cancellation plan.
While noting that it remains unclear which borrowers and how many received these notifications, Warren said that "instead of sending borrowers information to help them get the cancellation that they be entitled to, Navient pushed borrowers towards loans that could, at best, complicate their ability to get cancellation."
Warren then asked Gittleman if companies like Navient make more or less money if student borrowers who use their services receive debt cancellation.
"The future of Navient's lending business depends on its ability to take the most credit-worthy people with federal student loans and refinance them into private loans," responded Gittleman. "Every borrower who is debt-free as a result of President Biden's action is one fewer prospective customer for Navient."
"More broadly," she continued, "the better the deal the federal government offers borrowers with federal student loans, the less opportunity Navient has to sell people its private loans."
Warren said this was "outrageous behavior" by Navient, which is why she has asked the company and other student loan servicers in the industry "what steps they're taking to ensure that consumers receive timely and accurate information about their loans and their eligibility for cancellation."
Earlier this week, Warren joined Rep. Ayanna Pressley (D-Mass.) in a letter to Navient CEO John Remondi asking him to explain reporting about the company's recent conduct and alleged attempts "to scam borrowers out of student debt relief by encouraging them to refinance their loans" with NaviRefi.
The two lawmakers called on Remondi to provide answers to a list of key questions about the issue with a detailed and full response no later than September 26.
"We're putting the servicers on notice," said Pressley in a statement on Monday. "It's imperative that servicers provide borrowers with accurate and up-to-date information on their student loans."
"Thanks to President Biden's plan to cancel student debt," she continued, "millions are now eligible for meaningful student loan debt cancellation and we need to ensure it is administered efficiently and felt by as many people as possible. Senator Warren and I want answers."
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.