Former Sallie Mae unit up for billion-dollar Ed. Dept. contract
- Navient Corp., a former unit of Sallie Mae and the nation's largest student loan company, is one of four finalists under consideration by the U.S. Department of Education to manage federal student loans and grants.
- Just one month ago, Navient and Sallie Mae settled with the U.S. Justice Department and the Federal Deposit Insurance Corp. in a case that saw them accused of violating the Servicemembers Civil Relief Act by overcharging troops on student loans and obtaining default judgments against them. As many as 60,000 service members may have been affected.
- Prior to the settlement, Navient split off from Sallie Mae, taking the entirety of the bank's loan servicing and collection business, and the Huffington Post reports that its four existing loan servicing contracts — including another from the Education Department — are worth a total of $126 million.
It's not hard to see how this could rub some the wrong way. The issues with soldiers' student loans in the case settled last month was ultimately chalked up to "processing errors" by Navient CEO John Remondi, with no wrongdoing admitted or denied by Sallie Mae or Navient. Meanwhile, despite U.S. Education Secretary Arne Duncan's insistence that the company would be held accountable, its presence among the finalists for a billion-dollar contract has provided cause for concern on that matter. An Office of Federal Student Aid review of Navient ordered by Duncan should be concluded in September, though, and could result in other servicers being investigated, as well.
- The Huffington Post Former Sallie Mae Unit Up For Lucrative Education Department Contract
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