Sen. Elizabeth Warren (D-Mass.) and other Senate Democrats are calling for an investigation into an Education Department report that cleared agency contractors of cheating military servicemen and women on their federal student loans, accusing the department of conducting a deeply flawed review, the Washington Post reported today. The request comes two months after the department announced that it had found little evidence of its student loan servicers, the middlemen who collect and apply payments to debt, unlawfully charging active-duty service members high interest rates on student loans. The findings contradicted similar Justice Department and Federal Deposit Insurance Corp. investigations that resulted in a $100 million settlement with student loan servicer Navient a year earlier. In their investigations, Justice and the FDIC found that Navient charged nearly 78,000 members of the military more than the 6 percent interest permitted by law. Yet the Education Department said less than 1 percent of the troops’ files from its four largest servicers — Navient, Great Lakes, Nelnet and American Education Services — contained violations of the Servicemembers Civil Relief Act (SCRA), a federal law that extends legal and financial protections to military personnel. The department looked at a random sampling of about 600 borrowers across all four servicers. An analysis of the reviews by Warren’s staff concluded that the agency only conducted detailed reviews of 55 cases where eligible borrowers asked for an interest rate cap. Even in those few cases, the department found problems 29 percent of the time, according to the analysis.
