Justice Department Counts 19,000 Servicemembers Who Were Cheated By Navient

The U.S. Education Department appears to have underreported how many active duty military members were actually cheated on their federal student loans by Navient Corp.

According to the Huffington Post, the Education Department found Navient at fault for wrongfully overcharging 176 servicemembers on their federally owned student loans. The U.S. Department of Justice, however, suggested the Education Department missed thousands and thousands of cases.

The Education Department released a report on May 26, 2015 in which it all but cleared Navient Corp. (which split from Sallie Mae) of violating the Servicemembers Civil Relief Act (SCRA). Filed just days later, the Justice Department suggested 19,000 eligible military members were deliberately charged more than the six percent interest rate guaranteed by the SCRA.

The two departments have conducted separate investigations, but both originated about a year ago and examined cases dating back several years. Unnamed sources in the federal government told the HP the Education Department apparently narrowed its scope on purpose to lessen the blow.

After concluding their investigation, the Education Department announced Navient would keep its lucrative contract to collect federal student loans on its behalf. When concluding their investigation, the Justice Department settled with Navient for $60 million. About 78,000 affected borrowers are expected to share in the settlement funds, which the Justice Department said in its release were to be distributed earlier this month.

Navient has made $323 million over the last three years in business with the Education Department and handles the loans of 12 million borrowers. Sallie Mae and Navient both previously faced allegations of cheating non-servicemember borrowers by intentionally incurring late fees and discouraging money-saving repayment plans.

The Education Department has stuck with Sallie Mae and Navient throughout, despite harsh criticism from several angles. The student lender has also denied the Justice Department's allegations throughout.

Patricia Christel, a Navient spokeswoman, did not comment for the HP's report, but said the company disagrees with the Justice Department's findings.