Navient has responded to an Associated Press story on the loan practices of the company.
The story, citing, a federal report, claimed the Wilmington-based company, among other things, moved borrowers having trouble paying student loans into higher cost options.
The report sent Navient shares tumbling. The share price recovered some of the loss on Wednesday.
Today’s article by the Associated Press continues the practice of ignoring facts to make false, sensational and harmful accusations that discourage borrowers from working with their servicers. Despite being in possession of the Federal Student Aid (FSA) review and our account-by-account response, the article repeated a series of false accusations that are not found in any section of the review,” CEO Jack Remondi stated in a letter to shareholders.
A full reading of the report, our responses included in the report and comments provided by the Department of Education clearly and unequivocally refute the accusations that Navient was improperly steering borrowers. They also affirmatively conclude that in those instances where forbearance was used, it was applied appropriately.
According to a Department of Education statement on the review: “in approximately 9 percent of those calls, it was not clear whether Navient had sufficiently discussed options with the borrower. In response to FSA’s preliminary conclusions, Navient provided detailed information about each of the calls atissue. Based on FSA’s review of Navient’s responses and FSA’s independent review of Navient’s overall performance, FSA has concluded that Navient is substantially in compliance with its obligations,”
One of the main claims is that enrolling borrowers in forbearance is an inappropriate and therefore deceptive practice. This conclusion is deceptive in itself and shows a lack of understanding of the different repayment options available to borrowers and how forbearance can be both a proper and lower cost option for borrowers. IIt also ignores the fact that the option of forbearance was authorized by Congress and no senator has initiated any bill to eliminate it as a valid option.
The results are crystal clear, borrowers serviced by Navient have the highest enrollment in income-driven repayment programs of all comparable servicers and are least likely to default.
Navient has continued to battle critics in the years following its spin-off from Sallie Mae, which is based near Newark. Shares have remained well below $20, despite hopes that the Trump administration would provide relief from long-running scrutiny of its loan practices.
