November 20, 2018

American Banker: Warren lays into Navient CEO over Education Dept. Audit

Sen. Elizabeth Warren, D-Mass., has accused Navient's chief executive of false statements related to allegations of improper practices facing the student loan servicer.

In a letter to Navient CEO Jack Remondi, Warren claims that he denied the merits of a lawsuit by the Consumer Financial Protection Bureau alleging that Navient had steered struggling borrowers into expensive loan forbearance programs. But at the time, Warren said, Navient was being audited by the Department of Education.

The Department of Education audit, performed in 2017, was disclosed Tuesday in reporting by The Associated Press.

"It appears that, while the company was publicly stating that there was no truth to the allegations about Navient's misbehavior by CFPB, the company had received an official Education Department audit that revealed your company was not meeting federal standards or adequately servicing student loan borrowers," Warren said in the letter, dated Nov. 13. "You made these same denials to me privately — compounding the problem by denying the existence of any third party audit that identified Navient's failures."

Warren said the audit has "bolstered the allegations" against Navient and "found the company was not adequately servicing student borrowers.”

“Navient needs to explain the appalling findings of this audit and why the company denied that it existed,” she wrote.

Read more on the American Banker's website here.

By:  Neil Haggerty
Source: American Banker