Student Loan Company Navient Accused of Cheating Borrowers

The Consumer Financial Protection Bureau filed a lawsuit against Navient Corporation, the largest servicer of student loans in the U.S. stating that the company “systematically” cheated borrowers.  The lawsuit alleges that Navient, which services more than 12 million borrowers, failed to respond to consumer complaints, provided incorrect information to borrowers, and improperly processed payments on student loans. Further, Richard Cordray, the Director of the Consumer Financial Protection Bureau stated to the media that Navient  “…failed to correct its errors unless a consumer stays vigilant, discovers the problem, and contacts the company to insist that it be fixed.” Attorneys General from Illinois and Washington have both filed lawsuits against Navient in state court.

Navient failed to perform its core duties to borrowers

The lawsuit filed by the Consumer Financial Protection Bureau specifically outlines claims of negligent behavior of Navient employees.  First, the complaint states that most federal student loan borrowers have a right under federal law to set their monthly student loan payments as a share of their income, which allows borrowers extended payment relief. However, Navient systematically deterred numerous borrowers from obtaining access to some or all of the benefits of these plans and steered them instead into costly payment relief plans designed for borrowers experiencing short-term financial problems instead of affordable long-term repayment options that were more beneficial to the borrower’s financial situation.

Additionally, for borrowers who did enroll in long-term repayment plans, the complaint states that Navient failed to disclose the annual deadline to renew those plans, misrepresented the consequences of non-renewal, and obscured its renewal notice to borrowers who were due for renewal. This behavior allowed the expiration of the affordable payment amount and immediately increased the monthly payment amount due for these borrowers.

Navient’s connection to Indiana student loan borrowers

Navient, headquartered in Fishers, Indiana, was created when student loan lender Sallie Mae split off its loan servicing business. Navient services nearly $300 billion in student loans for more than 12 million borrowers. The company employs around 2,300 Indiana residents in three locations

The lawsuit seeks to recover excess charges paid by customers due to Navient’s negligent servicing of student loans. Cohen & Malad, LLP class action attorneys are investigating claims from Navient student loan consumers. Contact us for more information about this litigation.