You may know Navient Corp. as the student loan company formerly known as Sallie Mae. Although Navient Corp. is currently the country’s largest student loan company, it is still vulnerable to being policed for swindling people.
Navient is being sued by the Consumer Financial Protection Bureau for allegedly misleading students, bungling payment processing and cheating borrowers out of lower repayment rates in favor of its own bottom line, according to Buzzfeed News.
According to the CFPB’s lawsuit, which was filed Wednesday, they are seeking financial relief for millions of student borrowers. The total sum of the payment could potentially reach billions of dollars, officials said in a press call.
The most shocking of the allegations is the claim that Navient purposely pushed low-income borrowers away from income-based repayment plans and into a quick, short-term solution known as forbearance. This ultimately costs consumers more interest.
“Navient chose to subvert its obligations as a servicer in favor of shortcuts,” said Richard Cordray, the CFPB’s director.
In a statement on its website, the company dismissed the CFPB’s allegations, saying, “The timing of this lawsuit — midnight action filed on the eve of a new administration — reflects their political motivations.”
However, attorneys general in Illinois and Washington State also announced lawsuits against Navient and Sallie Mae. In their suits, they allege the companies had operated an illegal subprime lending scheme and debt collection violations.
Coincidentally, Navient was one of a number of companies whose stock quickly rose days after the election of Donald Trump. Many believe that the Trump administration will work to privatize the federal loan system and offer a business-friendly regulatory environment.
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