Warren demands answers from Navient about student loan "scam" reports
Sen. Elizabeth Warren (D-Mass.) raised concerns Tuesday that one of the nation's largest student loan services may be misleading borrowers.
Driving the news: Warren and Rep. Ayanna Pressley (D-Mass.) sent a letter to Navient demanding answers about "troubling reports" that it is "attempting to scam borrowers out of student debt relief" by providing "misleading information" that could make them ineligible for loan forgiveness.
- After the Biden administration announced its student loan relief plan last month, Naviant sent out notices to people who could be eligible for loan cancellation, encouraging them to refinance so that they would no longer be eligible, Warren said.
What they're saying: "If these reports are accurate, they reveal a particularly nefarious and harmful last-ditch tactic by Navient to profiteer off of the hardship of borrowers that finally are within grasping distance of obtaining relief from their abusive student loans," the two lawmakers said in the letter.
- "While families are breathing a sigh of relief, corporations that made billions of dollars 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 said during a Senate Banking, Housing and Urban Affairs Committee hearing Tuesday.
The other side: Navient said in a statement to The Hill that potential repercussions of refinancing are made clear to borrowers, including in its promotional emails, website and application.
For the record: Earlier this year, Navient reached a $1.85 billion settlement with a coalition of 39 state attorneys general to resolve allegations of predatory student loan servicing practices.
- Navient was accused of steering struggling student loan borrowers into costly long-term forbearances.
- Navient did not immediately respond to Axios' request for comment.