The student-loan company responsible for taking on 6 million borrowers' accounts next year says it 'couldn't agree more' with Elizabeth Warren's repayment concerns: 'It is imperative we get it right'
- Navient is transferring 6 million student-loan borrowers' accounts to Maximus next year.
- Sen. Elizabeth Warren has expressed concern with how borrowers will be treated under the new company.
Sen. Elizabeth Warren has had a contentious relationship with student-loan companies for a decade now over their treatment of borrowers. But when it comes to ensuring a smooth transition back into repayment next year, one of those companies said it sees eye to eye with the Massachusetts Democrat.
Navient, a student-loan company that currently services 6 million federal borrowers, announced in October that it would be ending its federal contract with the Education Department and transferring accounts to a new company, Maximus. This was welcome news to Warren, who has held Navient in her sights for years over the company's practices that steered borrowers into deeper student debt.
"Navient has spent decades misleading, cheating, and abusing student borrowers," Warren previously told Insider in a statement. "The Federal student loan program will be far better off without them."
But her oversight did not end there. Last month, she sent a letter to Maximus to ensure borrowers will not be subject to the same "abusive practices" that they were under Navient, and she requested information from the company on how it will facilitate a smooth transition for the borrowers it is taking on.
In a statement to Insider, Maximus spokesperson Eileen Rivera responded: "This is a defining moment for student borrowers, and we couldn't agree more with Senator Warren -- it is imperative we get it right."
Rivera added that the company is working to respond to Warren's questions and ensure Warren and her staff "share the Department of Education's confidence in us as the servicing of these student loans transitions from Navient to Maximus."
Navient is one of the three companies that announced plans to end its federal services, and in October, head of Federal Student Aid (FSA) Richard Cordray said in a statement that the remaining student-loan companies — including Maximus — must be held to higher standards.
"FSA is raising the bar for the level of service student loan borrowers will receive," Cordray said. "Our actions come at a critical time as we help borrowers prepare for loan payments to resume early next year. The great work done by our negotiating team here enables us to ensure that loan servicers meet the tougher standards or face consequences."
Rivera also added that Maximus will remain "independent and conflict-free as we do not and will never provide loan origination, consolidation or collection services."
The "conflict" she referred to is something that was common under Navient and other loan companies. Warren released an audit in 2018 that provided evidence of Navient's record of causing students to go into deeper student debt by "steering student borrowers into forbearance when that was often the worst financial option for them."
And borrowers have also been steered in the wrong direction when it comes to loan repayment. Lindsay Averbrook, a 38-year-old with $81,000 in student debt, previously told Insider she has been "tossed around 15 times" when trying to request help in paying off her debt.
It remains to be seen how smooth the transition back into repayment will really be, but an Education Department spokesperson previously told Insider the department will "continue to work to ensure that all of our borrowers can experience a successful return to repayment."