Sen. Elizabeth Warren (D-MA) calls out private companies for allegedly misleading student debt borrowers.
WARREN “Corporations that made billions of dollars off a broken student loan system are now busily laying new traps in a shameless last ditch effort to try to line their pockets. Navient, one of the world's largest and worst loan servicers, is now leading the way. According to reports, immediately after the cancellation was announced, Navient sent multiple emails to borrowers in encouraging them to refinance, their federal loans, under navigates private lender, Navi Refi, with the promise of lower interest rates. Now Mrs. Gittleman, your organization has a long history of protecting consumers from student debt scams, so I want to ask you, let's say a borrower decides to take Navient up on their offer and refinances their Federal loans with a Navi Refi by tomorrow. What would this mean for cancellation under President Biden's plan?
GITTLEMAN “Thank you, Senator Warren for the question. If they refinance with Navi Refi, then they will essentially be replacing their federal student loans with a private student loan because only federal student loans are eligible for cancellation, that means they may no longer be eligible for that cancellation. That's a huge loss for borrowers eligible for cancellation but Navient only mentioned this in the fine print at the bottom of those those emails.”
WARREN “So they could be forfeiting 10 to 20 thousand dollars worth of debt cancellations. In other words, right after the president announced student loan cancellation, Navient sent out notices to people who could be eligible, encouraging them to refinance, so they would not be eligible for debt cancellation.”