Elizabeth Warren says the government should fire student loan servicer Navient, which should fire its CEO

asheffey@businessinsider.com (Ayelet Sheffey) 4/13/2021

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© Provided by Business Insider Sen. Elizabeth Warren (D-MA). Drew Angerer/Getty Images

Sen. Elizabeth Warren said Navient CEO John Remondi should be fired at a hearing on Tuesday.
Navient, one of the largest student loan servicers, has been accused of misleading borrowers.

Remondi said the allegations are untrue and "not necessarily based on facts."

Navient CEO John Remondi was at Sen. Elizabeth Warren of Massachusetts' first hearing on student debt relief. Warren told Remondi that he should be fired for misleading student loan borrowers, but that wasn't all.

"The federal government should absolutely fire Navient, and because this happened under your leadership, Navient should fire you," Warren told Remondi during the hearing.

Warren, as the chair of the Senate Subcommittee on Economic Policy, called 11 witnesses to testify at the hearing to discuss the impact of student debt on borrowers, racial justice, and the economy.

Warren said in her letter to Remondi inviting him to testify at the hearing that while Navient currently services federal loans to 5.6 million borrowers and holds over $58 billion annually in federally guaranteed Federal Family Education Loan Program (FFELP) loans, it also has "been a contributor to the problem, with a decade-long history of allegations of abusive and misleading practices aimed at student loan borrowers."

She added that between 2009 and 2019, Navient has been accused or fined for "actions that ripped off borrowers," including the improper marketing of loans and failing to notify borrowers of their rights.

And an ongoing Consumer Financial Protection Bureau investigation found evidence that Navient "systematically steered thousands of borrowers who were having difficulty paying their loans into plans that were worse for the borrowers - but more profitable for Navient."

In February, three student loan borrowers filed a legal action against Navient, arguing that Navient owed them over $45,000 in overpayments that the company had wrongfully collected after their student loans had been discharged. This followed an Education Department ruling that Navient must repay the government $22 million in overcharged student loan subsidies.

In response to Warren's questioning on investigations into Navient, Remondi said his job is "obviously to comply with the rules and laws, and we work hard to make sure all borrowers successfully manage their loans."

"These allegations are not true," Remondi said. "They're accusations and not necessarily based on facts," he added.

Also testifying at the hearing were Rep. Ayanna Pressley of Massachusetts, Maura Healey, the attorney general of Massachusetts, and James Steeley, president and CEO of the Pennsylvania Higher Education Assistance Agency.