Sen. Elizabeth Warren is calling out this student loan servicer for abusive practices amid student loan default.
Here’s what you need to know.
in a sharp reaction Letter For student loan servicer Maximus, Warren (D-MA) wants assurance that Maximus will protect student loan borrowers when Maximus assumes Navient’s portfolio of 5.6 million student loans when servicing federal student loans from Navient by the end of the year. is expected to close. Here’s what’s inside the letter:
Student loan relief is coming to an end soon
Warren is deeply concerned that the Biden administration will not extend student loan relief from the COVID-19 pandemic beyond January 31, 2022. This means student loan borrowers will resume federal student loan repayments beginning February 1, 2022. Student loan payments and student loan interest rates will return to normal after 22 months of temporary student loan waivers. (Here are 3 ways to get lower student loan payments). Warren has expressed concern that millions of student loan borrowers will default on their student loans if President Joe Biden does not extend student loan relief until the end of next year. Despite their efforts to extend student loan forgiveness, the US Department of Education has stated that there will be no extension of this student loan relief. At the same time, Warren has been a prominent advocate for borrowers calling for broad-scale student loan forgiveness, including cancellation of student loans of up to $50,000. (Here’s how to apply for limited student loan forgiveness).
Student Loans: “End a History of Student Loan Servant Abuse”
While this student loan relief is coming to an end, Warren wants to “end the history of student loan servicers’ abuse.” Warren specifically called out Maximus, including:
- Over the past 8 years, Maximus has received more than $800 million from the U.S. Department of Education for managing student loans in default; (How to Apply for Student Loan Forgiveness During the Biden Administration)
- Warren says Maximus’ track record may raise concerns that student loan borrowers may receive “poor service” and “abusive behavior”;
- Warren alleges that Maximus mismanaged student loan defaults, resulting in thousands of student loan borrowers who were “eligible for borrower defense to file their loans in default, and improperly file their tax refunds.” was confiscated from him or his wages were decorated”;
- Maximus has never managed pre-default student loans, and Warren is concerned about Maximus’ ability to “meet a high degree of accountability”; And
- Maximus currently has a potential conflict of interest as a servitor for all student loans in default, and its new role as a servitor for the 5.6 million borrowers currently in student loan repayment.
Navient will no longer service your federal student loans
Navient, which provides $300 billion in student loans to 12 million student loan borrowers, announced last month that Navient would be exiting federal student loan service with the US Department of Education. (Here’s what this means for your student loans). Navient announced the surprise move within days of Congress avoiding a major government shutdown and signed a definitive agreement asking Maximus to move its federal student loan servicing to student loan accounts owned by the U.S. Department of Education. . (This is why Navient took off your student loans). Navient may face increased regulatory oversight from the US Department of Education, Congress, the state attorney general and the Consumer Financial Protection Bureau (CFPB). Warren wants to ensure that Maximus — which Warren says has a “checkered history” of servicing student loans, will now service $449 billion of student loans for 13 million student loan borrowers. Given this increased responsibility, Warren wants to ensure that Maximus is transparent, responsive to borrower complaints, and provides accurate and timely information to student loan borrowers. (If you want student loan forgiveness, take these 5 steps).
What this means for your student loans
If Navient is your current student loan servicer for federal student loans, Maximus will likely become your new federal student loan servicer. The US Department of Education will contact you in writing regarding this transition. You don’t have to take any action. Your student loan terms, including your interest rate, student loan repayment plan, and student loan terms, will remain the same. However, you will want to update your Autopay information once the transition is complete because you will be making student loan payments to Maximus if Maximus becomes your new student loan servicer. That said, you should continue to make student loan payments to Navient until the Department of Education notifies you otherwise. Importantly, this is only for federal student loans, and private loans will not be affected.
The expiration of temporary student loan forbearance means you must have a game plan for student loan repayment. Make sure you understand all your options now. Here are some popular ways to pay off student loans:
Student Loans: Related Reading
If you want student loan forgiveness then do these 5 steps
How to Apply for Limited Student Loan Forgiveness
Education Department to cancel $2 billion student loans
Here’s Who Eligible For Student Loan Forgiveness Right Now