There are a handful of companies that the government hires to work with borrowers of student loans across the United States, including in Florida. These companies provide loan forgiveness programs and affordable payment options for people struggling to meet their financial obligations. However, they have received criticism for allegedly exacerbating the problem of student loan debt in America by providing information that is erroneous or insufficient to borrowers. A merger between two of these large firms now has congressional lawmakers concerned.
Great Lakes and Nelnet are two of the four management firms tasked with managing student loan debt for the federal government. Between the two of them, they oversee about 40% of the student loan debt owed in this country. Last year, regulators approved a merger between the two companies, reducing the number of firms managing student loan debt to three. Democratic lawmakers in Congress have concerns that the decrease in competition among these student loan management firms could impact borrowers negatively.
Three senators, two of whom are current presidential candidates, recently wrote a letter to the two government agencies responsible for overseeing merger activity, the Federal Trade Commission and the Department of Justice. These agencies’ role in overseeing mergers is to watch for activity deemed anticompetitive, and in the letter, the senators ask each of them to review the merger between Nelnet and Great Lakes.
The letter criticizes the companies for not adhering to regulations, as well as the Department of Education for not holding the companies accountable when violations do occur. It claims that the companies’ alleged shortcomings have already had a negative effect on borrowers, and that allowing them to merge could exacerbate an existing problem.
Even under the most favorable conditions, mergers can be difficult to accomplish. It may be helpful for companies to retain the services of an attorney.