A lawsuit against the nation’s largest servicer of federal and private student loans – charging the group “systematically and illegally” failed borrowers at every stage of repayment – has been filed by the CFPB, seeking “significant relief for the borrowers harmed by these illegal servicing failures,” the bureau announced in a release today
The action, filed against Navient Corporation – formerly part of Sallie Mae, according to CFPB – asserts that the company created obstacles to repayment by providing bad information, processed payments incorrectly, and failed to act when borrowers complained.
“Through shortcuts and deception, the company also illegally cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans,” CFPB charged. “The Bureau seeks to recover significant relief for the borrowers harmed by these illegal servicing failures.”
According to CFPB, Navient (of Wilmington, Del.) is the largest student loan servicer in the United States, servicing loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the Department of Education. Altogether, CFPB said, it services more than $300 billion in federal and private student loans.
Aside from Navient, also named in the lawsuit are two of its subsidiaries: Navient Solutions (a division responsible for loan servicing operations), and Pioneer Credit Recovery (which specializes in the collection of defaulted student loans), CFPB said.