Dive Brief:
- Navient, a company contracted by the federal government to service student loans, was accused a year ago of cheating troops out of benefits, including one that capped interest rates at 6%.
- The Huffington Post reports that the U.S. Department of Education is likely to clear the company of any wrongdoing, though the results of an official probe have not been released — and now that the investigation is back in the hands of Washington-based officials, conclusions could change.
- The Education Department has historically required soldiers and veterans to specifically request certain benefits, while the Justice Department, which filed a lawsuit against Navient last May, has demanded they be informed of them by loan servicers, according to the article.
Dive Insight:
The initial findings reported by the Huffington Post are in line with the Education Department’s more lax expectations for its student loan servicers. The department has regularly come down on the side of the money collectors, which critics have pointed to as the result of an inherent conflict of interest in the department being the entity charged with directly granting loans as well as the one benefiting from their collection. As a loan provider, the government gets profits based on repayment. Yet the Department of Education, ostensibly, is meant to act in the best interests of students.