Navient, the nation’s largest student loan servicer, has touted that it wants to help American borrowers, but based on a recent filing, the company is warning that it isn’t acting in the interest of consumers.
According to a report in Bloomberg News, Navient said, in a motion to dismiss the case lodged by the Consumer Financial Protection Bureau, that since its main role is to collect payments, borrowers can’t reasonably assume Navient will counsel them about their options when it comes to their student loan debt.
“There is no expectation that the servicer will act in the interest of the consumer,” Navient said in response to the litigation filed Jan. 18 by the U.S. Consumer Financial Protection Bureau, reported Bloomberg.
What’s more, Navient said its public statements, in which it urges borrowers to contact the company, doesn’t mean they will act in the best interest of the borrower. Around one to four of the roughly 44 million student loan holders either in default or having trouble paying their student loans think Navient and other student loan servicing companies are the problem, noted Bloomberg.
Navient’s contention in court that its main purpose is to collect debt — not help student loan borrowers — drew cries from critics, including David Bergeron, who worked at the Education Department for more than thirty years and recently retired as the head of postsecondary education.
“This ranks among the most appalling statements I have heard in my career,” David Bergeron told Bloomberg. “If that’s all they are doing, the Treasury Department and the Internal Revenue Service would do it better.” He went on to argue that the Education Department needs to fire Navient based on those comments in the court filing.
Patricia Christel, a Navient spokeswoman, told Bloomberg the company helps student loan borrowers “navigate loan repayment through proven solutions.” In January, the CFPB sued Navient, contending it “systematically” cheated student debtors and illegally steered struggling borrowers into payment plans that temporarily postponed bills but accrued interest, instead of helping them find lower cost ways to get out from under the debt.