Two watchdogs today filed a lawsuit against the Department of Education (ED) to shed light on its role in aiding Navient, a giant servicer of federal student loans, to defend an enforcement action brought by the Consumer Financial Protection Bureau (CFPB) in federal court. The National Student Legal Defense Network (NSLDN), represented by American Oversight, is seeking to uncover communications about ED’s decision to provide Navient with documents relevant to the case while refusing to provide the CFPB with the documents it has requested.
“Protecting predatory companies at the expense of student borrowers is a hallmark of Betsy DeVos’ leadership, so this move doesn’t come as a surprise,” said Austin Evers, Executive Director of American Oversight. “But even by DeVos’ standards, the department’s actions in this case smack of undue influence. Obstructing a separate agency’s attempts to provide relief to borrowers takes regulatory capture to a whole new level.”
In January 2017, the CFPB sued Navient for incorrectly processing loan repayments and cheating some students out of lower reimbursements, forcing struggling borrowers to pay more than necessary. Some of the records key to the CFPB’s case are controlled by ED, including records that would identify consumers harmed by Navient and quantify their financial losses.
According to a statement from Navient’s counsel during a court conference call on January 18, 2018, ED did not object to handing over documents requested by the loan servicing company. However, ED has reportedly since refused to authorize Navient to share documents the CFPB has requested, preventing the consumer watchdog from obtaining information key to its case.
NSLDN’s suit comes after the watchdog filed a Freedom of Information Act (FOIA) request in March 2018 for documents related to ED’s decision to hand over records to Navient. The FOIA request sought communications about the case between ED or Department of Justice officials and any of Navient’s attorneys, as well as the records that ED handed over to Navient in response to a subpoena.
See the complaint below: