Warren demands $22 million owed to student loan agent Navient

It’s not just US student borrowers who owe the federal government money. It is also one of the best loan managers.

Navient, one of the largest US student lenders, has owed the federal government $22.3 million for more than a decade and still hasn’t repaid it.

In a letter to Education Secretary Betsy DeVos, shared exclusively with Yahoo Finance, Sen. Elizabeth Warren (D-MA) urged her to rush to collect that amount from Navient.

“After massively overbilling the federal government in a years-long scandal…Navient has inexplicably continued to evade responsibility for defrauding taxpayers for years and still hasn’t returned that money,” Warren wrote. “Further delays or apologies are unacceptable: It’s time for you to hold Navient accountable and finally collect the $22.3 million the company owes taxpayers.”

Elizabeth Warren speaks at a rally in Brooklyn, New York in January 2020. (Photo credit: Joel Sheakoski/Barcroft Media via Getty Images)

This case now lies on your desk’

Navient’s payment is more than a decade late.

In 2009, a investigation by the Department of Education revealed that Navient, then known as Sallie Mae, overcharged the federal government by $22.3 million by abusing a program for small lenders.

The company had wrongly claimed special allowance payments on loans not intended for it (i.e. overcharging the federal government) and was asked by ED Office of Inspector General (OIG) return the money to the department.

The Federal Office of ED Student Aid has released a final determination in 2013, when he also asked Navient to repay that amount, but Navient never paid.

Warren wrote a similar post letter to the Obama administration in 2016, going nowhere. And since taking over as head of the Education Department under President Trump, DeVos has been criticized for being too close to loan officers like Navient and being too lax on regulating student loan policies, including limit CFPB access student loan information and change the borrower’s defense rule to make it more difficult to obtain relief.

Warren urged DeVos to act in the interest of the American taxpayer.

“This case is now on your desk waiting for you to act…you have a responsibility to the American people to make sure the company refunds the money it improperly collected,” she said. “Letting Navient discharge its debts, especially as you relentlessly pursue defrauded student borrowers, would be a blatant demonstration of your willingness to side with loan companies that are failing students and taxpayers rather than students and taxpayers…

I urge you to take action to finally end this saga and collect the $22.3 million Navient owes the American people.

Yahoo Finance has contacted the Department of Education and Navient for comment and has not yet received a response.

Education Secretary Betsy DeVos delivers remarks on the administration's efforts to increase school safety at the National Parent-Teacher Association legislative conference in Arlington, Virginia March 13, 2018. REUTERS/Aaron P Bernstein

Education Secretary Betsy DeVos delivers a speech on the administration’s efforts to increase school safety at the National Parent-Teacher Association legislative conference in Arlington, Va., March 13, 2018. ( Photo: REUTERS/Aaron P. Bernstein)

Navient stays provocative

Regarding Navient’s debts to the federal government, the company’s president and CEO, Jack Remondi, previously contacted DeVos and asked him to disregard Warren’s earlier letter, which claimed the same fact.

In the “fact check” portion of his letter, he said the unpaid fees of $22.3 million were “[f]alse and misleading.

He added: “This matter is non-service related and relates to subsidiary funding issued in 1993 and withdrawn over 10 years ago. These practices were consistent with emergency department guidelines and regulations. The company continues to support these billing practices as appropriate…Navient has gone through the authorized appeal process and is awaiting a final decision.

In its most recent 10-Q Ranking to the Securities and Exchange Commission, the company acknowledged the OIG audit, but added that it had appealed the judge’s decision to the secretary, adding, “We continue to believe that our billing practices SAP were appropriate…The Company established a reservation for this issue in 2014 and does not believe, at this time, that an adverse decision would have a material effect on the Company as a whole.

kyiv, UKRAINE - 2019/01/07: In this photo illustration the Navient Corporation logo seen displayed displayed on a smartphone.  (Photo illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

kyiv, UKRAINE – 2019/01/07: In this photo illustration the Navient Corporation logo seen displayed displayed on a smartphone. (Photo illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

Navient would have pushed borrowers to abstain

This is not the first time that Navient came under fire.

Navient was also sued in 2017 by the Consumer Financial Protection Bureau, a federal agency that Warren helped create, over allegations that he systematically encouraged student borrowers to forbear and failed customers”at each stage of the reimbursement.”

In a batch of court documents that were unsealed last year, it was revealed:

“Our battle cry remains ‘keep it out, keep it out, get them off the ball,'” a Navient executive said in the memo 2010. “In other words, we are very liberal with the use of forbearance once it is determined that a borrower cannot pay cash or use other entitlement programs.”

This case is still ongoing.

Aarthi is a writer for Yahoo Finance. She can be contacted at [email protected] Follow her on Twitter @aarthiswami.

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