Wilmington-based Navient denied claims that it is misleading some student loan borrowers regarding refinancing.
Longtime Navient critic, U.S. Sen, Elizabeth Warren, D-MA was joined by U.S. Rep. Ayanna Pressley, D-MA in writing a letter to the company regarding allegations that the company engaging in deceptive practices.
Refinancing would lead to some borrowers not seeing some of their loans forgiven under an executive order from President Biden. The Biden order allows forgiveness of up to $20,000 of student loan debt, depending on the type of loan issued.
The letter contained a list of allegations regarding the company’s practices.
Navient issued the following:
“NaviRefi’s promotional emails, website and application and approval processes include clear, comprehensive and numerous statements designed to help borrowers understand the terms of private loans. During the process of refinancing, we also automatically opt-out any federal loan that has a $0 payment, such as a federal loan currently covered by the CARES Act.”
Statements in materials include:
- “You may lose benefits associated with your underlying federal and/or private loans if you refinance such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options. If you file for bankruptcy, you may still be required to pay back this loan.”
Navient earlier exited the federal student loan servicing business after lawsuits from states and the federal government. The company continued to claim among other things that its collection practices were proper.
Navient was spun off of student loan giant, Sallie Mae, which is based near Newark.
