The Chief Executive of one of the nation’s largest student loan servicing companies is being accused of lying in testimony before Congress, as the companies winds down its operations servicing student loans on behalf of the federal government.
James Steeley, the CEO of the Pennsylvania Higher Education Assistance Agency (PHEAA) testified before the Senate Banking Committee’s Economic Policy Subcommittee in April when he said that his company had not been “penalized” for loan servicing errors. The company, in fact, was fined twice last year. Steeley denied in a published report that he lied when he answered the question from Sen. Elizabeth Warren [D-Mass.], who chairs the subcommittee, but did admit that his answers may not have been “as clear as they could have been.”
PHEAA was fined twice last year by the Department of Education for issues servicing student loans. The fines added up to $244,000.
In a letter to Steeley, Sen. Warren and Sen. John Kennedy [R-La.], the subcommittee’s ranking member, wrote that it was “incomprehensible that you would have subjected yourself to criminal penalties by ‘knowingly and willfully’ providing false information to Congress.” In response, Steeley said he was nervous because it was his first time testifying before Congress and that he did not “willfully provide false testimony.
“I did my best to accurately respond to your questions in real time,” he wrote.
Interestingly enough, about a week after the letters were exchanged, PHEAA announced it would not seek to renew a contract with the Department of Education to continue servicing federal student loans.
