Betsy DeVos’ Education Department has been very kind to the student loan industry, specifically loan servicer Navient, these past few years. It reportedly has helped shield Navient from a Consumer Financial Protection Bureau lawsuit and has given the company a pass on disclosing past abuses in its bid for government contracts. And now, new documents reveal that Navient’s CEO personally lobbied the department before its decision to preempt states from regulating student loan servicing companies.
The documents, reported on by Politico, were provided to the National Student Legal Defense Network (NSLDN) in response to a lawsuit American Oversight had filed on behalf of NSLDN. They contain an email sent by Navient CEO Jack Remondi to a top Education official in the fall of 2017, as a growing number of states were considering legislation to police the industry that had been facing more and more allegations of having misled student borrowers. Remondi asked that the administration declare that states did not have the authority to regulate student loan companies like Navient.
In February 2018, the Education Department issued the industry-friendly legal interpretation sought by Remondi, which said that only the federal government had authority to oversee student loan servicers. American Oversight’s lawsuit on behalf of NSLDN, filed in June of that year after the department failed to respond to NSLDN’s Freedom of Information Act requests, sought communications related to the department’s preemption decision.
The documents that were recently turned over to NSLDN also contained records showing that earlier in 2018, before the preemption decision was made, Colorado’s attorney general had fought with the administration over the release of federal student loan records. The attorney general’s office had first subpoenaed Navient for the information, and when the company declined by citing a Trump administration directive, it asked the Education Department. It’s unclear whether the dispute was resolved, but the documents show that the administration had not responded to Colorado months after the state’s request.
American Oversight is representing NSLDN in another lawsuit for records related to the Dream Center, which owned financially troubled schools that in 2018 accepted tuition payments without telling students that their accreditation status had changed. Last month, the New York Times reported on emails that show top Education Department officials were pulling strings for the Dream Center.
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