Over the past several years, Jack Remondi, chief executive of student loan giant Navient Corp., has gone out of his way to tout the company’s devotion to helping Americans cope with student debt.
He’s mentioned it in meetings with investors, on calls with Wall Street analysts, in testimony before Congress, and even on his Medium blog. “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances,” he said March 20.
But faced with a potential multi-billion dollar lawsuit by the federal government for not living up to that mantra, Remondi’s company, formerly an arm of student lender Sallie Mae, sang a different tune in court filings.
Borrowers can’t reasonably rely on America’s largest student loan servicer to counsel them about their many options, Navient said on March 24 in a motion to dismiss the case, because its primary role is, after all, to collect their payments.
“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.
With about one in four of the nation’s roughly 44 million student debtors either in default or struggling to stay current, there’s broad agreement that loan servicers such as Navient are key to ending the crisis. Remondi, 54, has said as much on several occasions. One of his four ideas to slash defaults is for policymakers to encourage borrowers to call their loan servicer. “For some borrowers, student loan debt can be especially daunting. The good news is that borrowers can turn to their student loan servicers for help to navigate the complex repayment options,” Remondi said in February.
But in court, Navient made clear that the company’s main job isn’t helping debtors; it’s getting them to cough up cash for creditors like its biggest client, the U.S. Department of Education. The department, Navient explained, didn’t agree to pay for the level of customer service the CFPB wants Navient to give.
Click here to read more about the claim by CFPB that Navient fails to counsel them about their many repayment options that are available.
