AUGUSTA — The nation’s largest servicer of federal student loans has lobbied against states’ efforts to license student loan servicers in Maine and elsewhere this year as it seeks to become the nation’s single servicer of student loans under a plan backed by U.S. Education Secretary Betsy DeVos.

State records reviewed by The Associated Press show Navient Corp. has reported spending at least $44,000 since January on lobbyists in Maine, New York and Washington, states where lawmakers are considering licensing requirements.

Lawmakers this year have considered such licensing and oversight bills in at least 10 states, including Illinois and Washington, whose state attorneys general have joined the Consumer Financial Protection Bureau by filing lawsuits accusing Navient of unfair and deceptive practices with lending and debt collection.

Navient calls such allegations false and politically motivated. Spokeswoman Nikki Lavoie said Navient has supported student loan policy reform to simplify repayment and better educate borrowers.

“We have engaged local representation in some states to make sure that policymakers have the facts on student loan servicing before they attempt to set servicing standards on federal student loans, which is likely to result in more complex, difficult and competing state-by-state processes for borrowers to navigate,” Lavoie said.

Critics say the Wilmington, Delaware-based company is only worried about profits and not the rights of the millions of Americans who carry student loan debt.


“I wish Navient would put more effort into training borrowers about repayment plans to keep borrowers out of default than lobbying to protect their bottom line,” said Natalia Abrams, executive director of advocacy group Student Debt Crisis.

Scrutiny is growing as Navient seeks to become the nation’s only servicer of student loans under a proposal backed by DeVos.

Nationwide, more than 44 million people collectively owe more than $1 trillion in student loan debt, with millions in default and high delinquency rates among minority borrowers. Seth Frotman, of the Consumer Financial Protection Bureau, praised state efforts to increase oversight over student loan servicers as smaller, private loan servicers and refinancers increasingly enter the market.

A move to streamline federal loan servicing started under President Barack Obama’s administration, and Navient is one of three entities still in the running for a contract to service an estimated 32 million federal direct student loans. DeVos tweaked the plan to allow one vendor to service all federal student loans, a move she said would improve customer service, limit costs and improve federal oversight of servicers.

That change and Navient’s lobbying against state licensing efforts are drawing concern from consumer advocacy groups, who point to federal scrutiny over Navient and President Donald Trump’s administration’s moves to change regulations protecting borrowers.

“From our perspective, that’s going to require more state oversight,” said Whitney Barkley-Denney, from the Center for Responsible Lending. “One servicer creates a too-big-to-fail environment where it’s a state-created monopoly for student loan servicing.”


The Department of Education didn’t immediately comment Tuesday.

Navient’s arguments are echoed by Student Loan Servicing Alliance, an industry group that represents Navient and two other companies, Great Lakes Educational Loan Services Inc. and Nelnet Inc., that formed a joint venture to become the nation’s single student loan servicer.

“A patchwork of different state requirements on federal student loan servicing can only harm and confuse borrowers, fueling the proliferation of student loan scam organizations that prey on struggling borrowers,” said Executive Director Winfield Crigler, who recently testified against Illinois’s student loan bill.

The National Council of Higher Education Resources, which represents the third contender for the single-servicer contract, Pennsylvania Higher Education Assistance Agency, is also critical of state licensing requirements that are “burdensome” and “duplicative.”

Recent laws in Connecticut, California and Washington, D.C., would require servicers to obtain licenses to operate. This year, Illinois’ similar bill, which also would create a state student loan ombudsman, has passed both houses. In New York, loan servicers are opposed to a Democrat’s bill that mirrors a deleted initiative in Democratic Gov. Andrew Cuomo’s budget that Navient lobbied against.

In Maine, Navient registered to lobby against Democratic Sen. Eloise Vitelli’s bill less than two weeks after the amended legislation received unanimous committee support.

“With one company servicing $1.4 trillion in student loan debt, states will need to be a partner to make sure the service is accountable to borrowers,” Vitelli said Monday on the state Senate floor, where lawmakers voted to send her bill back to committee on a party-line 18-17 vote.

Associated Press writer David Klepper in Albany, New York, contributed to this report.

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