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‘Hard for us to believe’ student loan payment suspension won’t be extended: Navient CEO

  • Navient CEO Jack Remondi said on a recent earnings call that he expects Biden to extend the student loan payment break.
  • Payments are currently set to resume on September 1, and Biden has yet to give an update.
  • Another lender has previously said it expects the break to be extended until 2023.

Management at a major student loan company doesn’t see borrowers resuming payments anytime soon.

During a second-quarter earnings call on July 27, Jack Remondi — the CEO of Navient, a Delaware-based company that handles private student loans — said he thought the president was unlikely Joe Biden chooses to restart payments on September 1.

In April, Biden extended the pandemic-era student loan payment pause for the fourth time, through August 31. Remondi said Navient expects further relief.

“I assume our sources are the same as yours, what we’ve read in the press and what our — some of our former colleagues in the direct lending department have spoken to us about,” Remondi told an analyst during the interview. call for results. “And it just happened that the department said not to communicate with customers yet. I think given where we are in the schedule and the end date of August 31, it’s hard for us to believe that will not be extended.

“Our working assumptions are that the 0% interest in the payment waiver will extend throughout 2022,” Remondi added.

He was referring to recent directives from the Department of Education to federal loan companies ordering them to stop messaging surrounding the restart of payments – an action the department took before the last extension of the suspension of payments in April.

Navient received Department of Education approval to close its federal loan servicing operations in October, transferring 6 million of its federal borrowers to a new student loan company, Maximus. It continues to service private student loans and borrowers under the Federal Family Education Loan (FFEL) program, a portion of which has been included in the payment pause.

Remondi isn’t the only student loan CEO to see an extension on the horizon. Anthony Noto, CEO of SoFi – one of the largest student loan refinancing companies – said during the company’s second quarter earnings call in early August that he believed the pause in student loan payments would be extended through January 2023. SoFi was among several lenders that lobbied Congress in March to restart payments.

As Insider previously reported, this is now the closest it has ever been to resuming student loan payments without an update from Biden, and it has borrowers and loan companies who await advice on any forthcoming relief. Additionally, Biden is making a decision on a broad loan forgiveness, apparently considering $10,000 relief for borrowers earning less than $150,000 a year, and he himself has said he will announce that. relief before August 31.

Since Biden has yet to announce a decision on an extended suspension of payments and broad debt cancellation, Democratic and Republican lawmakers are using the time to sway the president’s final decision. A group of Republicans recently introduced legislation to end targeted loan forgiveness programs and resume student loan payments, while more than 100 Democrats wrote a letter to Biden urging him to extend the student loan payment pause. student loan and debt cancellation.

“Resuming student loan payments would force millions of borrowers to choose between paying their federal student loans or putting a roof over their heads, food on the table, or paying for child care and health care. healthcare – as costs continue to rise and yet another COVID-19 variant increases hospitalizations nationwide,” the Democrats wrote.