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The Education Dept. approved student-loan company Navient’s request to shut down its services.
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The 6 million federal borrowers under Navient will be transferred to another company, Maximus.
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Federal Student Aid head Richard Cordray said Maximus will be held to higher standards.
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The Education Department on Wednesday approved student-loan company Navient’s request to shut down its federal services, becoming the third company to do so this year before student-loan payments resume in February.
According to a press release last month, the six million borrowers who currently pay their federal student loans to Navient will be transferred to Maximus, a company that services government loans. The Pennsylvania Higher Education Assistance Agency (PHEAA) and Granite State Management and Resources, servicing a combined 10 million borrowers, are ending their contracts, as well.
Federal Student Aid head Richard Cordray said in a statement the agency’s confidence in the handover “is bolstered by the fact that Maximus will be held to the stronger standards for performance, transparency, and accountability that FSA included in its recent servicer contract extensions.”
Navient announced their request to transition their federal accounts to Maximus last month, and Navient CEO Jack Remondi wrote in a blog post that both Navient and Maximus have been working with the Education Department over the past months to ensure a smooth transition for the borrowers, saying he is “confident borrowers will continue to be well-served” during and post-transition.
“Maximus will be a terrific partner to ensure that borrowers and the government are well served, and we look forward to receiving FSA approval,” Remondi said.
This was welcome news to lawmakers like Massachusetts Sen. Elizabeth Warren, who has held Navient in her sights for years and accused it of misleading borrowers.
“Navient has spent decades…
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Source : yahoo
