Additional Coverage:
- Student-loan companies that don’t do their jobs should be fired, Elizabeth Warren says. Her next target is one that manages 8 million borrowers. (newsbreak.com)
Navient Settlement Signals Crackdown on Student Loan Servicers
Senator Elizabeth Warren has long advocated for oversight of Navient, a major student loan company. The Consumer Financial Protection Bureau (CFPB) recently settled with Navient, resolving allegations of mishandling borrowers’ payments.
The settlement sends a message to the industry that bad behavior will not be tolerated. Warren believes terminating contracts of underperforming servicers could be an effective solution.
The Education Department has reported errors in servicing, including late or inaccurate billing statements. Lawmakers have expressed concern over MOHELA, another major servicer, and have called for its contract to be terminated.
The Navient settlement is a sign that the government is willing to hold servicers accountable. Warren warns servicers that their time is running out if they do not fulfill their obligations.
The CFPB Director, Rohit Chopra, has emphasized that more needs to be done to clean up the student loan industry. Democratic lawmakers are exploring additional measures, including a potential investigation into MOHELA.
Advocates and lawmakers are pushing for the termination of contracts for underperforming servicers, sending a clear message that negligence and exploitation will not be tolerated.