The student loan servicer, Navient, has turned its outrage up to a borderline 11 claiming it has been unfairly painted in a light which says they are not awesome.
Navient CEO Jack Remondi issued a statement saying, “Today’s article by the Associated Press [Link] 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.”
Here is a copy of the review mentioned.
Remondi says, “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.”
Actually what the Department of Education (FSA) review says is “FSA listened to 388 inbound and 2,000 outbound calls, for a total of 2,388 calls. Of these, FSA determined that 13 inbound and 207 outbound calls did not provide the borrowers with all of their options. For these 220 calls, Navient offered only forbearance.”
It might be a touch more believable that Navient objects to the information provided in the Associated Press article and documents written by FSA if Navient was not also making arguments in court that they are under no obligation to provide good advice to consumers that call them for assistance with their accounts.
As part of the ongoing lawsuit by the Consumer Financial Protection Bureau (CFPB) against Navient, it was said, “Borrowers could not reasonably rely on Navient to counsel them into alternative payment plans unless Navient had an affirmative duty to provide such individualized financial counseling. But the law imposes no general duty to provide information without some fiduciary relationship.” – Source
In response to the Navient position, the CFPB stated, “Navient repeatedly encouraged distressed borrowers to contact the company for advice and guidance about repayment options that were most suitable for their situation. Navient repeatedly made public statements such as “Contact us … and let us help you make the right decision for your situation.” Borrowers reasonably relied on Navient to do what it promised.” – Source
So as it stands today, Navient is pissed and feels they have been mistreated by a bunch of people. But interestingly that lawsuit by the CFPB against Navient continues to drag on.
Recent court documents seem to indicate Navient does not want to turn over documents to the CFPB.
United States District Judge Mariani said, “the Court will order Defendants to produce the disputed borrower documents, order Defendants to produce former employee contact information, and extend the fact discovery deadline and all subsequent deadlines.”
The rumble on the playground continues. Navient says the CFPB has refused to turn over documents as well. But the CFPB says, in what is my favorite quote of the day, “Defendants’ claim that the Bureau is withholding responsive documents is baseless. As an initial matter, it is not clear why Defendants expect that the Bureau would be in possession of a large volume of non-privileged responsive documents, when this case concerns Defendants’ conduct, and the Bureau has no relevant relationship with Defendants apart from being a regulator.”
The CFPB states:
- “Fact discovery is scheduled to close in approximately one month. Yet, just within the past month, Defendants produced approximately 455,000 documents in response to the requests for production served seventeen months ago. The Bureau is diligently reviewing these documents and noticing additional depositions as needed.
- In September, Defendants provided phone numbers for former employees – information that the Bureau had requested six months earlier. The Bureau is working to contact some of the former employees, and expects to add witnesses to its Rule 26(a)(1) disclosures based on the interviews that are being conducted. Defendants likely will seek to depose those individuals.
- Within the past few weeks, Defendants agreed to produce consumer data requested over eight months ago.4 The Bureau does not know when Defendants will begin or complete that production, but when they do, the Bureau will need to work with its experts to analyze that data. During the investigation, Defendants represented that their data was so complex that it took their employees – who had much greater familiarity with the data – months to analyze.”
Here is the bottom line for me, anyone who has dealt with a consumer that has called student loan servicers knows the advice given is often wrong, misleading, or not in the best interest of the student loan debtor.
The instant outrage by Navient over the Associated Press reporting and the statements made by Senator Elizabeth Warren seems like Thoth doth protest too much.
The response of Navient should be they will clean up their advice, act in a fiduciary role to assist the student loan debtor, and will get on with the job of servicing student loans in a way that benefits their client, Department of Education, and the debtor.
But I suppose that’s a bit too much to ask for.
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