Navient Changes Course, Denies Accountability to Borrowers

For years, Navient’s chief executive John Remondi has stressed the company’s commitment to assisting student loan borrowers. “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances,” he said as recently as March 20th of this year.However, amid widespread accusations of unlawful conduct and a massive lawsuit from the federal government, Navient has switched its mantra to denial of accountability, claiming that borrowers cannot reasonably rely upon it for counseling about their options since the company is only responsible for collecting debt. “There is no expectation that the servicer will act in the interest of the consumer,” Navient said following the lawsuit from the Consumer Financial Protection Bureau (CFPB).In court, Navient asserted that it is only responsible for securing cash for creditors such as the Department of Education and that it “did not agree to pay” for the extent of customer service that the CFPB wants it to provide. “This ranks among the most appalling statements I have heard in my career,” says David Bergeron, who has worked with the Department for over three decades and served as the head of postsecondary education before retiring. “If that’s all they are doing [collecting], the Treasury Department and the Internal Revenue Service would do it better.”Among the charges against Navient are steering borrowers into costly forbearance plans when they would have fared better in income-based repayment (IBR) plans, resulting in Navient earning over $4 billion in unnecessary interest. The CFPB, in its lawsuit, seeks restitution to victimized students, changes to the existing payment agreements, and an injunction to more strictly prohibit this conduct in the future.“The Education Department ultimately is asking loan servicers act on its behalf to fulfill its fiduciary responsibility to borrowers,” says Bergeron, and the government “expects its servicers to make sure that borrowers gain access to income-based repayment plans.”