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Wednesday, May 9, 2018

Big step forward in fight over student loanshark

Magaziner, shareholders clear major hurdle in fight to hold student loan giant Navient accountable

monterey bay aquarium sharks GIFRhode 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.