In a recent letter addressed to Secretary of Education Betsy DeVos, Sen. Elizabeth Warren called for the Education Secretary to hold the student loan corporation, Navient, accountable for overcharging the U.S. Department of Education by $22.3 million more than a decade ago. After ripping off the federal government for years, Navient has yet to repay the money and continues to escape accountability for fleecing taxpayers.
In her letter to Secretary DeVos, Sen. Warren wrote on Wednesday, “I write today to urge you to collect the $22.3 million that federal student loan servicer Navient Corporation (Navient, formerly known as Sallie Mae) owes the U.S. Department of Education (the Department). After massively overcharging the federal government in a years-long scandal, and after findings from the Department’s Office of the Inspector General (OIG), its Office of Federal Student Aid (FSA), and more recently, a ruling of an administrative law judge, Navient has inexplicably continued to escape accountability for bilking taxpayers for years and still has not repaid this money. Further delays or excuses are unacceptable: it is time for you to hold Navient accountable and finally collect the $22.3 million the company owes to taxpayers.”
Navient is one of the country’s largest servicers of federal and private student loans, managing over $287 billion in federal student loan debt for approximately 6 million federal student loan borrowers. In August 2009, an audit by the OIG found that Navient had overcharged the Department by approximately $22.3 million after the servicer improperly claimed special allowance payments for ineligible student loans. OIG found that Navient’s billing practices “did not comply” with requirements for the payments and recommended that FSA direct Navient to return the funds to the Education Department.
“For years since this scam was revealed, Navient has continued to engage in predatory, improper, and illegal behavior, which I summarized for you in my October 2019 letter urging you to finally hold the company accountable and terminate their lucrative contract with the Department,” Warren continued. “Moreover, instead of taking responsibility for costs to taxpayers resulting from its misconduct, Navient has instead devoted tens of millions of dollars to lobbying and influence-peddling at the Department and in Congress.
“This matter now sits on your desk waiting for you to act. Navient owes taxpayers $22.3 million; you have a responsibility to the American people to ensure the company pays back the money it improperly collected. Letting Navient off the hook for its debts, particularly as you relentlessly hound defrauded student borrowers, would be a blatant demonstration of your willingness to side with loan companies that fail students and taxpayers over students and taxpayers. I urge you to take action to finally end this saga and collect the $22.3 million that Navient owes the American people.”
In a March 2019 ruling of an administrative law judge, Navient was found to be responsible for the repayment of these funds but has continued to deny responsibility and delay repayment. The company has most recently appealed directly to Secretary DeVos, who has so far failed to collect these funds and hold Navient accountable.