Navient is the nation’s largest servicer of student loans, managing accounts and processing payments for more than 12 million borrowers of federal and private student loans. But the company’s practices have come under fire: The Consumer Financial Protection Bureau and two state attorneys general sued the company earlier this year, claiming vast mismanagement of borrower accounts.
Under the Telephone Consumer Protection Act, automated calls or texts to a cellphone generally require a consumer’s consent, Ms. Saunders said. But in 2015, as part of federal budget legislation, Congress carved out an exception to the telephone act for collectors of federal debt, including student loans.
The exception, however, is subject to rules to be issued by the F.C.C. outlining protections for consumers. Last year, the F.C.C. proposed rules that included limiting automated calls and texts to student borrowers to three a month. But those rules have not been formally carried out, and the delay has muddied the waters and encouraged servicers to be more aggressive, Ms. Saunders said.
Separately, the new rules are being challenged by a group of loan servicers, including Navient, that said they would “hamstring” servicers in their attempts to collect from borrowers.
The consumer groups argued, however, that since the new rules have not been put in effect, the old rules still applied — and Navient was “flouting” them.
In responses to numerous court cases brought against Navient by student borrowers over repeated phone calls, Ms. Saunders said, Navient argued that its calls are permissible because of an exception created by the 2015 budget act.
“Navient has a well-established, positive track record of supporting student borrowers to succeed in repayment, and we respect our customers’ communications preferences,” Nikki Lavoie, a Navient spokeswoman, said in an emailed statement. Calls are an important way to help struggling…