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Stand with Sen. Warren: Tell the Education Department to come clean about student loan scandal

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Petition to the Department of Education:

"Come clean about who was responsible for the inaccurate and misleading review of Navient loan servicing and how it happened. Immediately rescind the report and take action to protect students from abusive loan servicers."

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    Stand with Sen. Warren: Tell the Education Department to come clean about student loan scandal

    Something stinks at the Department of Education (DOE). The department’s inspector general recently released a scathing audit blasting the department for misleading the public with a report that minimized the potentially criminal actions of the student loan giant, Navient.1

    The Department of Justice and the Consumer Financial Protection Bureau have investigated Navient for its abusive and predatory tactics, especially instances of violating the Servicemembers Civil Relief Act (SCRA) by charging members of the military higher rates than allowed by law. Instead of firing Navient, the Department of Education reportedly ignored federal prosecutors, and instead conducted an internal review and publicly cleared the lender of all wrongdoing. The Department of Education’s internal watchdog is now calling that review “inaccurate and unsupported.”2

    Sen. Warren has just demanded that the Education Department come clean, saying, “we need to get to the bottom of how this happened -– and who allowed it to happen – to ensure that it does not happen again.”3 Warren sent the acting head of DOE a long list of questions designed to unearth what went wrong, who is responsible, and whether the flawed report was deliberate. With Acting Secretary John B. King still waiting on Senate approval to take the job full-time, now is the moment to turn up the heat.

    Stand with Sen. Warren: Tell the Education Department to come clean about student loan scandal.

    In the most egregious example, the Education Department publicly claimed that Navient denied troops their right to a cheaper loan in “under one percent” of cases, while the inspector general found it was more than sixteen times higher. This is not the first time the DOE has sided with servicers over students – in fact, in 2013, DOE admitted it did not fine Sallie Mae, the predecessor to Navient, despite finding the company had hurt borrowers and overcharged taxpayers. And both before and after the inspector general’s audit, the department has never admitted fault, but instead offered excuses and publicly defended its handling of the loan giant.4

    It is no wonder Sen. Warren has long cautioned that the DOE was acting more like a “lapdog” than a “watchdog.”5

    Sen. Warren wrote the acting secretary, John. B. King, to demand answers to 25 questions about the process the Department of Education used to conduct its review under former Secretary of Education Arne Duncan. She also wants to know why a team with little experience with such reviews was chosen to carry it out, and who approved the misleading public statements by Department of Education spokespeople clearing Navient of wrongdoing.6 Sen. Warren is also part of a group of senators, including Patty Murray and Richard Blumenthal, who are calling on the DOE to rescind the report altogether now that it has been discredited by the department’s own internal watchdog.7

    Struggling students deserve an Education Department that works for them, not big corporate lenders – so we need to speak out now.

    Stand with Sen. Warren: Tell the Education Department to come clean about student loan scandal.

    Sallie Mae is a predatory, abusive company that has long harassed and trapped young people in unpayable debt. Though the government now directly provides federal student loans, Sallie Mae allegedly turns a profit with private loans with deceptive terms.8 A few years ago, it spun off Navient to carry out the lucrative government contract to collect federal student loan payments and work with borrowers, known as “servicing loans.” While the most recent complaints against Navient are due to overcharging members of the military, the Consumer Financial Protection Bureau believes such actions are typical of how Navient treats all borrowers. In fact, because most students with federal loans are allowed into income-based repayment plans, some have asked why Navient is allowing students to default at all.9

    The DOE should have fired Navient a long time ago. But to hold the company accountable, the first step is to understand who is responsible for misleading taxpayers. We need to raise an outcry now, while senators have leverage over the acting secretary who has yet to be confirmed.

    Stand with Sen. Warren: Tell the Education Department to come clean about student loan scandal.

    Thank you for speaking out.

    1. Shahien Nasiripour, “Elizabeth Warren Questions Education Department's Competence Over Student Loan Fraud,” Huffington Post, March 4, 2016.
    2. Ibid.
    3. Ibid.
    4. Ibid.
    5. Ibid.
    6. Sen. Elizabeth Warren, “Letter to Dr. John B. King, Jr.,” Warren.Senate.Gov, March 3, 2016.
    7. Danielle Douglas-Gabriel, “Senate Democrats press Education Department to rescind reviews of loan servicers,” Washington Post, March 3, 2016.
    8. Shahien Nasiripour, “Sallie Mae Braces For Nearly $200 Million In Penalties As Education Department Ponders Next Move,” Huffington Post, May 13, 2014.
    9. Nasiripour, “Elizabeth Warren Questions Education Department's Competence Over Student Loan Fraud.”