Exclusive: Senator Warren invites CEO of student loan giant Navient to debt burden hearing

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Senator Elizabeth Warren (D-MA), chairwoman of the Subcommittee on Economic Policy at the Senate Committee on Banking, Housing, and Urban Affairs, invited student loan giant Navient CEO Jack Remondi (NAVI) to an upcoming hearing that will explore the student debt crisis and the servicer's role.

The letter, obtained by Yahoo Finance, stated that Navient and other servicers "have the ability [to] offer a unique perspective on this crisis. Navient is one of the nation’s largest student loan servicers, and since 2014 has obtained contracts worth hundreds of millions of dollars from the Education Department to provide student loan servicing."

Remondi has since confirmed his attendance, along with Pennsylvania Higher Education Assistance Agency (PHEAA) CEO James Steeley. Massachusetts Attorney General Maura Healey and Representative Ayanna Pressley (D-MA) will also be joining the hearing.

WASHINGTON, DC - FEBRUARY 04: Senator Elizabeth Warren (D-MA) listens during the confirmation hearing for Marty Walsh, nominee for U.S. Labor Secretary, before the Senate Health, Education, Labor, and Pensions Committee in the Dirksen Senate Office Building on Capitol Hill February 4, 2021 in Washington, DC. If confirmed, Walsh would leave his position as Mayor of Boston. (Photo by Mandel Ngan-Pool/Getty Images)
Senator Elizabeth Warren (D-MA) listens during the confirmation hearing for Marty Walsh, nominee for U.S. Labor Secretary, before the Senate Health, Education, Labor, and Pensions Committee in the Dirksen Senate Office Building on Capitol Hill February 4, 2021 in Washington, DC. (Photo: Mandel Ngan-Pool/Getty Images) (Pool via Getty Images)

"Your company has also been a contributor to the problem, with a decade-long history of allegations of abusive and misleading practices aimed at student loan borrowers," Warren's letter asserted. Navient previously responded to several of the allegations detailed in the letter, contending that the accusations are “built on false and meritless statements” and “misrepresents the public record.”

Navient services federally-backed loans for roughly 5.6 million borrowers, holds an estimated $58 billion in Federal Family Education Loans, and is well known to Warren, attorneys general, and judges across the country.

The Consumer Financial Protection Bureau (CFPB), which Warren helped create after the 2008 Financial Crisis, sued Navient in January 2017 over alleged deceptive practices. In January 2020, Warren demanded that the company pay $22.3 million owed to the federal government after a 2009 investigation by the Education Department (ED) found that Navient (then-Sallie Mae) had overcharged the federal government by abusing a program meant for smaller lenders. (Navient created a web page to address the various lawsuits against the company.)

"Your testimony will provide you with an opportunity to offer context on the burden of student loans on borrowers and the economy," the Warren letter stated, "and on the problems created for borrowers due to the long record of abusive and misleading behavior by student loan servicers like Navient."

The invitation and hearing come at a time when Warren and Senate Majority Leader Chuck Schumer (D-NY) are urging President Biden to cancel up to $50,000 in federally-backed student debt for roughly 43 million borrowers.

The Biden-era ED has so far taken steps to cancel debt for some defrauded students of now-defunct for-profit schools as well as debtors who qualify for total and permanent disability discharge.

This post has been updated to reflect that Navient accepted the invitation to appear at the April 13 hearing.

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

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