In the waning days of President Obama’s administration, the Consumer Financial Protection Bureau began to take notice of Navient’s loan practices. Complaints were coming in from all corners of the country, eventually leading to the company getting sued.
As light began to shine upon their deception, which have cost their customers millions of dollars, whole states began to jump into the mix. Illinois, Pennsylvania, Washington, and now California joins in the suit against them.
As one of the largest loan collection agencies in the country, they are the one of the eight companies hired by the government to reclaim the over $1.4 trillion worth of debt owed. Navient services 12 million borrowers themselves.
Xavier Becerra, Attorney General of California, said he was going to push a lawsuit with the Superior Court to look at how Navient potentially misguided borrowers on how they should get their debts paid. Using deception, they were able to scam their customers out of millions all over the country.
“Navient’s loan servicing abuses have compounded the misery of parents and students who sacrificed to pay for college,” Mr. Becerra said in a statement that includes accusing Navient of breaking state laws that include false advertising and prohibiting competition.
Of course, Navient disputes the charges by calling them unfounded and vows to fight back. They feel that too many families get angry at the system and the banks who give student loans instead of the education system itself.
John F. Remondi, the chief executive at Navient, said, “this is another attempt to blame a single servicer for the failures of the higher education system and the federal student loan program to deliver desired outcomes.”
Despite their denial of having done anything wrong, this isn’t the first time Navient has been accused of defrauding borrowers and so far, it’s not looking too good for them going forward. Navient requested in Pennsylvania to have the federal consumer bureau’s lawsuit tossed out, but the judge denied the request.
Individual borrowers are seeking lawsuits as well. A case in Florida was ordered to move forward after the company sought to declare they are exempt from having a borrower sue them, which is a federal law.
This is an obvious nightmare situation for Navient, who is fighting tooth and nail to keep these cases from ever making it to court.
The moral of the story? Do your own research when it comes to your student loans. There are legitimate government programs out there designed to help you. The banks and loan companies aren’t looking out for your best interest and will find any opportunity to gouge you out of more money if you’re not careful.