If you have received a letter from a company called Navient, then you had a Sallie Mae loan that is now processed by Navient. I got a Navient letter.
I have noticed over the years that nearly every new company that loans are transferred to is worse than the previous one (hello, Brazos). So I decided to check this one out, out of curiosity.
It turns out that Navient, which used to be owned by Sallie Mae but which Sallie Mae split off this spring, has been investigated for stealing from US soldiers. According to a Huffington Post article surprisingly titled “Obama Administration to Reward Student Loan Company Accused of Cheating Troops,”
In May, Navient and its former parent, Sallie Mae, agreed to pay a combined $139 million to resolve Department of Justice allegations that the two companies had swindled up to 60,000 service members out of tens of millions of dollars and forced other borrowers to pay unfair fees on their student loans.
Another HuffPost article notes that
Federal authorities said Sallie Mae and Navient broke the law in three ways: The companies failed to honor troops’ requests after receiving them, did not follow up with troops whose documents may have been deficient, and failed to inform troops of the 6 percent cap when they requested other benefits under the law.
“Defendants’ conduct was intentional, willful, and taken in disregard for the rights of servicemembers,” the Justice Department said.
All this was done knowingly out of accordance with the Servicemembers Civil Relief Act, which was established specifically to reduce interest rates and fees for soldiers. Apparently Navient did not deny it, but did indicate “processing errors.” Disgusting.
So Sallie Mae/Navient paid fines. And as a result of this non-denial of criminal activity without any criminal punishment, you would think that the Department of Education would at least punish Navient by way of canceled federal contracts right? (Because as you will recall, the DoE under the current administration changed the student lending system from servicing federal loans to giving contracts to private companies to service them.) Well the answer is no, the DoE actually decided to give Navient more contracts since this happened!
So now the watchdog orgs are outraged. They are calling for the head of the Education Secretary. Interestingly, Navient was actually ranked last among the four major student loan contractors. And yet, despite criminal activity and the worst ranking, still more contracts. I am with the watchdog orgs.
In other news, since Sallie Mae shed this albatross and calls itself “just a bank” now, it actually posted higher profits this quarter. Good for you Sallie Mae.
So I just wanted to share this with you, in case you got a Navient letter. Naturally I find the deliberate abuse of both deployed and non-deployed soldiers ethically repugnant. I suppose because of the nature of their work, they may be a bit too busy to notice bogus fees or spend time on the phone challenging inaccurate interest rates. So to the student lending industry, this may make this demographic “fish in a barrel.”
It shouldn’t surprise me is that a slimy company like Navient would stupid enough to target (or at least equally swindle) a group that is specifically covered by protective federal legislation. But it should be noted that if they did this to troops, even out of ignorance, they will do the same to everyone else. Until caught anyway. Since the DoE did not cancel any contracts or call for the termination of any Navient executives last time, this is business as usual just like on Wall Street. And DC.