Magaziner Files Shareholder Proposal with Student Loan
Giant Navient Corporation
Citing a record number of student loan defaults, General
Treasurer Seth Magaziner has filed a shareholder
proposal with Navient Corporation (NASDAQ: NAVI) asking the student loan
servicer to conduct a comprehensive review of the company's ability to
adequately serve customers in, or at risk of, default.
"The student loan crisis is threatening the financial
security of millions of Americans. It is our duty as shareholders to ensure
that the companies we invest in have a credible plan for how to address growing
levels of debt and delinquency", said Rhode Island General Treasurer Seth
Magaziner.
Navient, which was spun out of Sallie Mae in 2014,
describes itself as the "nation's leading loan management, servicing and
asset recovery company."
An estimated 8.1 million federal student loan borrowers are currently in default, with one in every four student loan borrowers in either delinquent or in default. In Rhode Island, an estimated 64% of college graduates have student loans, with an average debt of $32,920, according to the non-profit Institute for College Access & Success.
"With average tuition rising more than 200 percent in
the last two decades alone, college is becoming more expensive while becoming
increasingly more important," said Travis Escobar, president of the
Millennial Professional Group of Rhode Island.
"Rhode Islanders have the
4th highest student loan debt in the country. This crisis is preventing many
millennials from achieving financial security. We need solutions to prevent
more young people from defaulting."
According to the Federal Reserve Bank of New York, the
amount of student loan debt has increased from $0.26 trillion in the first
quarter of 2004 to $1.28 trillion in the first quarter of 2016. At the same
time, the 90-day delinquency rate on student loans has grown from 6.3 percent
in 2004 to 10.9 percent in 2016.
Read Treasurer Magaziner's letter
to Navient here.
Read Rhode Island Treasury's shareholder proposal with Navient here.