Magaziner,
shareholders clear major hurdle in fight to hold student loan giant Navient
accountable
Rhode Island General Treasurer
Seth Magaziner is leading investors in demanding answers from the nation's
largest student loan servicer about its role in the growing national student
debt crisis after Navient unsuccessfully attempted to blocked shareholders from
voting on his proposal by appealing to the U.S. Securities and Exchange
Commission.
"The student loan crisis is
threatening the financial security of millions of Americans," said
Treasurer Magaziner. "It is our duty as shareholders to ensure that
student loan servicers have a credible plan for how to address growing levels
of debt and delinquency."
Treasurer Magaziner, and
co-filer AFL-CIO, are asking Navient Corporation, the nation's largest student
loan servicer, to publish a report on recent governance measures taken to
monitor and manage risks arising from the growing student loan debt crisis, and
whether this category of risk is considered in senior executive compensation.
"We co-filed this proposal because Navient must recognize the special risks the looming student debt crisis creates for the largest and most well-known student loan servicer, and shareholders deserve to know how the company is protecting their investment from those risks," said Brandon Rees, Deputy Director, Corporations and Capital Markets at American Federation of Labor & Congress of Industrial Organizations (AFL-CIO).
Navient is currently facing
lawsuits from the Consumer Finance Protection Bureau, Washington State,
Illinois and Pennsylvania, alleging that it harmed student loan borrowers. The
company is also facing a class action lawsuit from investors alleging that it
made false and/or misleading statements and engaged in deceptive practices to
facilitate the origination of subprime student loans.
Shareholders will have the
opportunity to vote on Treasurer Magaziner's proposal, which is item four on
Navient's 2018 proxy statement, at the company's annual meeting on May 24, 2018
in Wilmington, Delaware.