Lobbying Hires

Sallie Mae spin-off registers to lobby

A controversial company vying for a billion-dollar Department of Education contract has registered to lobby, according to recently filed disclosure forms.

Navient Solutions recently spun off from the student loan company Sallie Mae, taking over its loan servicing and collections business. Sallie Mae has become a bank.

{mosads}“This is actually less of a new registration than a function of the recent split of the companies,” wrote Navient spokeswoman Patricia Nash Christel in an email. The two companies legally broke apart on April 30 and officially appeared as separate entities on the NASDAQ beginning May 1.

Recently filed paperwork in the Senate shows that Navient has been lobbying since May 1, and has a separate registration showing that it is working to represent Sallie Mae Bank as well.

“During a brief transition period until October, the same period as for other interim services, Navient government relations staff will continue to provide government relations services to Sallie Mae Bank, similar to a consultancy arrangement,” Christel said.

Federal regulators claimed the companies, before the split, had over-charged soldiers on student loans and failed to inform them that they could receive lower rates.

Navient and Sallie Mae settled with the Department of Justice and the Federal Deposit Insurance Corporation to the tune of $139 million last month, with neither admitting any wrongdoing.

The Department of Education has a combined $300 million in contracts with Navient already, but it announced in May that the company is in the running for a $880 million contract with the department, according to federal records cited by media reports.

The Huffington Post on Monday was first to report that Navient was one of four finalists for the contract from the Department of Education to originate and disburse federal student loans. In 2013, Sallie Mae spent $2.8 million lobbying the federal government.

Accenture, which was hired to fix the HealthCare.gov website, handles the work right now. It’s now in the running to have its contract re-upped. It spent more than $2.9 million on lobbying fees last year.

Nelnet Servicing and Team Great Lakes are the two other companies being considered, with Nelnet Inc. spending $400,000 on lobbying services in 2013.

Navient may face an uphill messaging battle in order to win the contract.

Last month, the AFL-CIO, the United States Student Association, the American Federation of Teachers urged people to sign a petition asking Education Secretary Arne Duncan to cancel the contracts the department already has with the company, pointing to its alleged illegal activity with servicemember loans.

Duncan has said that department officials will conduct a review to determine “what appropriate actions, if any,” should be taken against Navient.

The company and Sallie Mae has also drawn the ire of the Consumer Financial Protection Bureau and Democratic members of Congress, including Sen. Elizabeth Warren (Mass.), Senate education panel chairman Tom Harkin (Iowa) and Rep. George Miller (Calif.).

Tags Arne Duncan Elizabeth Warren Tom Harkin
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