Consumer agency sues student loan giant Navient

Consumer agency sues student loan giant Navient

File photo taken in 2014 shows local officials and Navient leaders unveiling a new sign for the company in Pennsylvania.

The nation's largest student loan servicer was hit with a Consumer Financial Protection Bureau lawsuit Wednesday over allegations that it has "systematically and illegally" failed borrowers.

The company also cheated borrowers out of their rights to lower repayments, according to the CFPB lawsuit, which seeks financial relief for student borrowers who were harmed.

"For years, Navient failed consumers who counted on the company to pay back their student loans," said CFPB Director Richard Cordray. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs."

Navient services the loans of more than 12 million borrowers, including more than six million accounts under a contract with the U.S. Department of Education. In all, the company services more than $300 billion in federal and private student loans.

The CFPB civil action also targets Navient Solutions, a company division responsible for loan servicing, and Pioneer Credit Recovery, a subsidiary that specializes in collections on student loans that fall into default.

"The allegations of the Consumer Financial Protection Bureau are unfounded, and the timing of this lawsuit — midnight action filed on the eve of a new (U.S. presidential) administration — reflects their political motivations, Navient said in a statement issued in response to the legal action.

"Navient welcomes clear and well-designed guidelines that all parties can follow, and we had hoped our extensive engagement with the regulators would achieve this objective," the Delaware-based company said. "Instead, the suit improperly seeks to impose penalties on Navient based on new servicing standards applied retroactively and applied only against one servicer. The regulator-asserted standards are inconsistent with Department of Education regulations, and will harm student loan borrowers, including through higher defaults."



Add Comment

all comments

  Other news

more
Gary Barlow sends fans into meltdown as he shares rare snap of lookalike son Daniel on Instagram: 'That's so weird!'

Gary Barlow sends fans into meltdown as he shares rare snap of lookalike son Daniel on..

17-Aug, 16:02

The Take That legend took to Instagram to wish his eldest child a happy...

Embryos kill off male tissue to become female

Embryos kill off male tissue to become female..

17-Aug, 16:30

Add a new ingredient to the sugar, spice and everything nice needed to...

Not a record, not a tie: July ranks as second warmest month on record

Not a record, not a tie: July ranks as second warmest month on record..

17-Aug, 15:40

A man wipes sweat from his face in Midtown Manhattan, July 19, 2017 in...

All Florida prisons on indefinite lockdown after ‘credible intelligence’ of planned uprisings

All Florida prisons on indefinite lockdown after ‘credible intelligence’ of planned uprisings..

18-Aug, 00:42

More than 97,000 prisoners across the state of Florida will reportedly...

Trump tells Republican senators 'inaction is not an option' on health care

Trump tells Republican senators 'inaction is not an option' on health care..

19-Jul, 18:20

After watching the Senate GOP's efforts to repeal and replace Obamacare...

Kelly Clarkson Opens Up About Cancer Scare

Kelly Clarkson Opens Up About Cancer Scare..

09-Feb, 23:06

Kelly Clarkson was terrified the night of her first Grammys, but not for...

Senior Russian lawmaker accuses US of provocation over Syria

Senior Russian lawmaker accuses US of provocation over Syria..

27-Jun, 05:01

A senior Russian lawmaker has dismissed the United States' warning about...

Scholars: White House's name gaffe not helping US-China ties

Scholars: White House's name gaffe not helping US-China ties..

10-Jul, 02:45

Chinese scholars say the White House staff revealed its incompetence and...