Institutional investor draws attention to company’s alleged abuse of student loan borrowers
(Washington, D.C.) AFL-CIO President Richard Trumka sent a letter to Navient yesterday questioning whether the mammoth student loan servicer has the necessary internal controls to prevent it from violating the law and losing lucrative government contracts.
“As a long-term institutional investor in Navient and its predecessor Sallie Mae, the AFL-CIO has a profound interest in the company’s performance. We are concerned by Navient’s alleged legal violations involving student loan borrowers. Since government investigations are still ongoing, we are asking those responsible for keeping Navient on the right side of the law to discuss our concerns as soon as possible,” said AFL-CIO President Richard Trumka.
Over the past year, Navient has had legal troubles involving their treatment of military members. In May, it was part of a settlement that agreed to pay $97 million over allegations from the Department of Justice and the FDIC that it overcharged 60,000 active duty military members on their student loans and that it mishandled their payments to maximize late fees in violation of the Servicemembers Civil Relief Act. The Consumer Financial Protection Bureau is also investigating the company’s servicing practices and the Department of Education is reviewing whether the company breached its contract.
“While the men and women of our armed forces were protecting our country, Navient mishandled their loan payments. These types of business practices are unacceptable,” added James Gilbert, Director of the AFL-CIO’s Union Veterans Council and a veteran of the US Navy.
“Navient’s alleged servicing violations are significantly harming its reputation and are jeopardizing its role as a government contractor,” said Heather Slavkin Corzo, Director of the AFL-CIO’s Office of Investment. “Taking financial advantage of soldiers is horrifyingly wrong. The allegations that Navient failed to comply with regulations, if true, pose a real risk to the larger business.”
A copy of the letter can be found at the link below: https://docs.google.com/file/d/0B7WDMtzVyAYQSVpjNDBZNVhDYzQ/edit
Contact: Sean Savett at [email protected] or 202-637-5018