On Wednesday, the Consumer
Financial Protection Bureau (CFPB) filed a lawsuit against Navient, the largest student loan
servicer in the country.
If you have a student loan,
there is a good chance that it may be serviced by Navient. Navient, which spun
off from Sallie Mae, has more than 12 million customers and services more than
$300 billion of government and private student loans.
Here is what you need to know
and the action that you can take:
Navient Lawsuit: What Are The
Allegations?
In its lawsuit and press release, the CFPB alleges that, among other
allegations, Navient "systematically and illegally [failed] borrowers at
every stage of repayment," including:
*created obstacles to
repayment by providing bad information;
*processed payments
incorrectly;
*failed to act when borrowers
complained;
*illegally cheated many
struggling borrowers out of their rights to lower payments, which caused them
to overpay for their student loans;
*deceived private student loan
borrowers about requirements to release their co-signer from the loan;
*and harmed the credit of
disabled borrowers, including severely injured veterans
The CFPB also alleges that
Navient improperly directed borrowers into forbearance when these borrowers
otherwise might have qualified for income-driven repayment plans, and did not
adequately keep borrowers in income-driven plans informed of deadlines to
maintain their eligibility under such plans.
"For years, Navient
failed consumers who counted on the company to help give them a fair chance to
pay back their student loans," said CFPB Director Richard Cordray in a
statement. "At every stage of repayment, Navient chose to shortcut
and deceive consumers to save on operating costs. Too many borrowers paid more
for their loans because Navient illegally cheated them and today's action seeks
to hold them accountable."
In a statement, Navient denied all allegations and said the
lawsuit was politically motivated.
[….]
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