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An Education Department audit produced last year found that Navient, one of the country’s largest student loan servicers, steered thousands of borrowers toward higher-cost repayment plans.
The audit found that for nearly 10 percent of borrower calls monitored by the department, Navient offered no options besides forbearance, which allows borrowers to temporarily stop making payments while interest continues to accumulate. The findings of the audit were first reported by the Associated Press.
The document was released publicly Tuesday by Senator Elizabeth Warren, a Massachusetts Democrat, who said it bolstered a lawsuit brought against the company by the Consumer Financial Protection Bureau. CFPB alleged that between 2010 and 2015, the company added billions in interest to student loans through overuse of forbearance. Along with CFPB, five states -- California, Illinois, Mississippi, Pennsylvania and Washington -- are suing the company.
Warren also released a letter to Navient CEO Jack Remondi, sent last week, that demanded an explanation for the findings of the audit.
Within hours of the AP report Tuesday, the value of Navient stock tumbled by nearly 10 percent.
