The nation’s largest student loan company is under litigation for alleged irregularities made on student loans.
Pennsylvania attorney general Josh Shapiro filed the suit against Navient Corp. on Thursday with suspected widespread abuses and deceptive acts on loan administration.
The suit includes Navient Corp. and its subsidiaries which could affect a significant part of their borrowers.
Read The Morning Call’s full story on how Navient student loans took advantage of its clients.
Largest Student Loan Company Under Fire
The Pennsylvania attorney general’s office filed suit Thursday against Navient, the largest U.S. student-loan servicer, alleging widespread abuses and deceptive acts involving its administration of student loans.
The suit, filed in federal court in Harrisburg against Navient Corp. and its subsidiary Navient Solutions LLC, formerly a part of Sallie Mae, could affect hundreds of thousands of Pennsylvanians, Attorney General Josh Shapiro said, noting the office is seeking restitution for all borrowers affected by the practices.
The Pennsylvania attorney general’s office recently slapped Navient Corp. and its subsidiaries with a lawsuit.
An article by Susan Snyder says the trial stems from alleged business malpractices by the leading student loan company.
The suit includes all who received private student loans from Sallie Mae, a previous part of the subsidiary, Navient Solutions LLC.
The suit could affect hundreds of thousands of Navient Corp. clients in Pennsylvania.
The attorney general’s office is seeking compensation to borrowers affected by this malpractice.
The attorney general also said Navient Corp.’s deceptive practices abused its clients by putting profit ahead of its interests.
This would not just affect Pennsylvanian clients, but millions of families across the country struggling to repay student loans.
(Note: Different types of loans qualify for different types of repayment plans… And making sure that you’re in the correct repayment plan can mean better benefits, lower payments, and averaged out lower interest rates (which means an easier repayment for you!) Download this free cheat sheet to repayment plans to make sure you are taking advantage of the best one for you. Learn more here).
Not Your Friendly Student Loan Company
A federal lawsuit was already filed against the student loan company’s Wilkes-Barre business office this year.
The states of Washington and Illinois have also filed separate lawsuits against the student loan company.
Pennsylvania residents alone filed 1,059 complaints with the Consumer Financial Protection Bureau as of September.
All this despite Navient Corp.’s denial of the allegations and confidence it will win in courts.
The attorney general has detailed how the student loan company deceived its borrowers into taking subprime student loans.
According to the suit, Navient Corp. offered risky and costly subprime loans which they knew were expected to default.
Their failure to perform due diligence caused harm to borrowers as well as their cosigners.
The lawsuit also alleges the company of loosening their credit standards.
The company offered expensive loans to students who could not afford them.
As a result, some borrowers had to delay owning a home or even starting a family due to their debts.
The student loan company has amassed up to $4 billion in interest charges beginning 2010 to 2015 from its borrowers.
Serving Borrowers Not Burdening Them
A student loan should help an individual get through higher education to improve their quality of life.
As the attorney general’s office just put it, “The company should have been helping borrowers apply for income-driven repayment plans.”
The student loan company should have made their product affordable with secure repayment schemes.
Putting your client’s interests first should be the very definition of the existence of any business.
Learn more about this developing story in this video from ABC Action News:
(Note: Different types of loans qualify for different types of repayment plans… And making sure that you’re in the correct repayment plan can mean better benefits, lower payments, and averaged out lower interest rates (which means an easier repayment for you!) Download this free cheat sheet to repayment plans to make sure you are taking advantage of the best one for you. Learn more here).
What are your thoughts on this developing story? Let us know in the comments section below.
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Feature image via Editorial credit: Jonathan Weiss / Shutterstock.com
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