Heres the Great Czar Obama at Work! ................ The Obama administration plans to reward Navient Corp, the student loan specialist formerly owned by Sallie Mae, with new business some three months after federal prosecutors accused the company of intentionally cheating troops on their federal student loans, according to three sources familiar with the administrations plans. The move is likely to stoke comparisons to recent multi-billion-dollar settlements reached between big banks and federal authorities over financial crisis-era misdeeds. Banks agreed to pay sizable sums, but public interest groups have criticized the settlements because the banks suffered few business consequences and their executives escaped criminal and civil charges. Its very disappointing, said Jason Collette, national organizer for Alliance For A Just Society, a network of state-based advocacy groups. Until a company loses its federal contracts or a senior executive is punished, these fines are just the cost of doing business. In May, Navient and its former parent, Sallie Mae, agreed to pay a combined $139 million to resolve Department of Justice allegations that the two companies had swindled up to 60,000 service members out of tens of millions of dollars and forced other borrowers to pay unfair fees on their student loans. At a news conference announcing the settlement, Education Secretary Arne Duncan said he had instructed his staff to immediately conduct a review to determine what appropriate actions, if any, should be taken against Navient in response to the allegations. Asked then if the Department of Education would cancel Navients lucrative contract, Duncan said, Every option is on the table. During the ensuing months, the Education Department considered punishing Navient, according to people familiar with the matter, by excluding it for a year from the group of companies allowed to service American college students federal loans. Instead, Duncans department is expected to announce as early as Friday that it will require more college students to deal with Navient, rather than the departments numerous other loan servicers, according to people familiar with the matter. As a result, more taxpayer funds will flow to Navient. The company already handles 5.8 million student loan accounts under its contract with the Education Department. On Tuesday, President Barack Obama boasted to veterans at an American Legion convention about how his administration had made it easier for troops to access the same benefits the Justice Department accused Navient of willfully preventing soldiers from enjoying. Dorie Nolt, an Education Department spokeswoman, didnt respond to multiple requests for comment. Companies and government agencies often make public potentially embarrassing news on Friday afternoons, especially before holiday weekends. If the Education Department is really allocating Navient new loans after its history of unlawful practices, it shows that the department isnt prioritizing the safety of borrowers. Instead, theyre prioritizing their contractors, said Chris Hicks, an organizer who leads the Debt-Free Future campaign for Jobs With Justice, a Washington-based nonprofit that has called on Duncan to suspend the department’s contract with Navient. - by Shahien Nasiripour - Posted: 08/29/2014 huffingtonpost/2014/08/29/obama-navient-student-loans_n_5736570.html?ncid=txtlnkusaolp00000592
Posted on: Sat, 30 Aug 2014 15:03:53 +0000
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