Navient Busted Herding Student Loan Borrowers Into Default Then Using The Federal Government To Shake Them Down For Money
Navient Corporation is the largest student loan servicer working under contract for Sallie Mae and the Department of Education. The servicer is also the most disorganized and the hardest to get information from. Their level of inept management rivals that of the mortgage servicers in the early days of the financial crisis.
The loan servicer is also the most disorganized and the hardest to get information from. Their level of inept management rivals that of the mortgage servicers in the early days of the financial crisis.
They are also taking a play from what mortgage servicers did at the peak of the foreclosure crisis. Navient is herding borrowers into default and then charging them crippling late fees and outrageous interest charges.
CFPB Files Suit Against Navient
The CFPB filed suit against the servicer in January. The agency received tens of thousands of borrowers and co-signers filed complaints against Navient. The agency alleged Navient systematically cheated customers by not fully informing them of their repayment options.
The CFPB also alleged that the servicer guided borrowers into forbearance or deferment programs that benefited the company.
The CFPB alleges Navient’s conduct of pushing distressed debtors into forbearance agreements violated a federal law banning “abusive” practice
The servicer would set the borrower up with an income-based repayment plan.
State attorneys general in Washington and Illinois also filed similar lawsuits against the company.
The CFPB claims Navient added $4 billion to outstanding student loan debt by placing 1.5 million borrowers into forbearance agreements.
The company’s lawyers argued in the suit that borrowers can’t reasonably rely on Navient to counsel them about their many options because its primary role is, after all, to collect their payments:
There is no expectation that the servicer will act in the interest of the consumer.
The company also stated:
(It) didn’t agree to pay for the level of customer service the CFPB wants.
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