June 18, 2014

Another Department of Education Disappointment

How Many Laws Does One Company Have to Break Before the U.S. Government Stops Rewarding It With a Multimillion-Dollar Contract?

Ori Korin, ori@jwj.org or 202-393-1044 x126

Washington, D.C. – Following today’s announcement by U.S. Secretary of Education Arne Duncan that the Department of Education would be renewing its current student loan servicing contracts with Navient (a former division of Sallie Mae recently separated into its own entity) and three other student loan servicers, Jobs With Justice Debt-Free Future Campaign Organizer Chris Hicks issued the following statement:

“The fact is that the Department of Education, Sallie Mae and Navient are playing an active role in making our country’s growing student debt crisis worse, not better. The department’s ability to oversee its contractors has proven lackluster at best. And Navient has reached settlements with two other federal government agencies for alleged violations and is under investigation by several others. How does a company that’s been penalized for overcharging borrowers and service members get to keep such a lucrative contract with the government? The renewal of this contract is just the latest in a long line of failures by the Education Department in its handling of the federal student loan program. It’s a shame that our own government agencies are looking out for their corporate friends’ bottom lines instead of the well-being of millions of struggling student loan borrowers.”

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