STATEMENT on Navient Outsourcing Student Loan Servicing to MOHELA
Navient's $17 billion student loan portfolio should be extinguished, not transferred. These loans still exist as a “portfolio” because Navient has, for decades, coerced payments from defrauded students and their families, using unethical schemes to avoid statutes of limitation.
BOSTON – Navient announced that it will outsource student loan servicing for its $17 billion portfolio to loan servicer MOHELA. The Project on Predatory Student Lending represents more than one million student borrowers across the country. Many of these borrowers hold private student loans with Navient for predatory for-profit schools, even after their federal loans from those same schools have been canceled due to the schools' misconduct.
PPSL clients also recently called attention to significant problems with MOHELA's failure to comply with the borrower defense settlement in Sweet v Cardona and wrongly putting borrowers back into repayment.
Statement from Eileen Connor, President and Director of the Project on Predatory Student Lending:
"Navient's $17 billion student loan portfolio should be extinguished, not transferred. It is made up of decades-old subprime private student loans that Navient (as Sallie Mae) pushed on unsuspecting students as part of their conspiracy with disgraced, behemoth for-profit colleges like ITT, Art Institutes, and brands operated by Career Education Corporation, such as Le Cordon Bleu, Brooks Institute of Photography, and Sanford Brown. These loans still exist as a “portfolio” because Navient has, for decades, coerced payments from defrauded students and their families, using unethical schemes to avoid statutes of limitation. Borrowers—scammed by Navient’s chosen partners—have suffered enough. They have more than paid off the amounts they borrowed, yet because of Navient’s predatory loans, their supposed debt is larger today than when they entered school. We call on the CFPB, FTC, Department of Education, and state attorneys general to scrutinize this transaction and end collection on these loans, which are the product of obvious consumer fraud."
About the Project on Predatory Student Lending
The Project on Predatory Student Lending (PPSL) is the leading legal organization representing student borrowers against predatory for-profit colleges and the policies that enable institutions to exploit and cheat students. PPSL uses bold, strategic litigation and advocacy to demand accountability in the higher education space and influence policy solutions to create a more just and affordable education system. PPSL represents more than one million student borrowers and its work has resulted in cancellation of more than $16 billion of fraudulent student loan debt.
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