Navient will no longer service federal student loans
Navient announced Tuesday that it would no longer service federal student loans, leaving about 6 million borrowers waiting to be assigned to a new servicer.
Why it matters: The announcement comes after two other lenders ended their existing relationship with the Department of Education, and as prominent Democratic lawmakers continue to call on President Biden to relieve student debt.
- The company was one of the largest student loan servicers partnered with the department, per CNBC.
- If it receives government approval, Navient will transfer its student loan accounts to Maximus, another servicer employed by the federal government.
What they're saying: "Navient is pleased to work with the Department of Education and Maximus to provide a smooth transition to borrowers," said Jack Remond, Navient President and CEO, in a statement.
Sen. Elizabeth Warren (D-Mass.), who has repeatedly pushed for executive action on student debt, welcomed the move saying, "Navient has spent decades misleading, cheating, and abusing student borrowers," per Insider.
- "The world has changed for student-loan-debt servicers," Warren added. "They can't sign a contract, do a lousy job, cost borrowers tons of money, and still get their contracts renewed."