Senator Elizabeth Warren (D-MA) speaks during a Senate Armed Services Committee hearing on September 28, 2021.Patrick Semansky-Pool / Getty Images

  • Navient, which has 5.6 million student loan borrower accounts, is terminating its service this year.

  • Senator Elizabeth Warren wants to make sure these borrowers are not abused under the new company, Maximus.

  • Warren asked Maximus for information on how he will ensure a seamless transition for borrowers.

There’s a new student loan service in town, and Massachusetts Senator Elizabeth Warren wants to keep them honest.

On Monday, Warren led four of his fellow Democrats, including Ohio Senator Sherrod Brown, to send a letter to Maximus, the company that takes over 5.6 million borrower accounts after Navient closes his service contract. federal loan in December. While Warren told Insider in September that the student loan industry would be “much better off” without Navient, citing its decades of abusive practices, the progressive senator is worried about how Maximus will handle millions of new borrowers.

“It is extremely important that your business is operating at a high standard and with increased transparency to provide the best possible service to borrowers and to end a history of loan service abuse,” lawmakers wrote to the CEO of Maximus, Bruce Caswell.

Navient CEO Jack Remondi said in a September statement that “Navient is delighted to work with the Department of Education and Maximus to ensure a smooth transition for borrowers and Navient employees as we continue to focus on areas other than government student loan servicing.

As lawmakers noted in the letter, Maximus has dealt with the loans of more than 1.7 million defaulting borrowers since 2019, and its track record “raises concerns that borrowers are subject to poor service and practices. abusive ”. For example, a 2015 audit found that Maximus had failed to make the necessary changes to the defaulted loan management platform it manages, which led borrowers to see their wages foreclosed and loans repaid. tax entered.

The letter also cited Navient’s “troubling history of borrower abuse and misconduct” and asked Maximus to confirm, by December 8, his plans to ensure a smooth transition for the nearly six million. borrowers while avoiding the same mistakes Navient has made over the past decade.

It’s no surprise that Warren suppresses Maximus early on – she has long kept Navient in her sights, even before being elected to the Senate. Insider reported Warren’s full story with Navient in April, starting in 2006 when she was interviewed on “60 Minutes” and cited Sallie Mae, as Navient was once known, for her abuse of the student loan system.

Since then, she has repeatedly called the company for illegal practices with borrowers, such as in November 2018, when Warren published an audit proving Navient had pushed students into more debt by “luring student borrowers out of debt. ‘abstention when it was often the worst financial option for them. “

And most notably, during a hearing in April where she invited the CEOs of all student loan companies to testify, she told Navient CEO John Remondi that he should be fired for the abuses that took place. products under his leadership.

The Pennsylvania Higher Education Assistance Agency (PHEAA) and Granite State Management and Resources announced in June that they will end their service contracts this year, and although PHEAA recently turned the tide and extended its contract for another year to allow more time for the transition, by the end of 2022, 16 million student loan borrowers will be in the hands of new companies.

Read the original article on Business Insider


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