Allegations of Deceptive Lending Practices at Student Loan Company

If you have student loan debt and your servicer is Navient, it is important to be aware of recent allegations of deceptive and unfair lending practices against this entity. According to a recent article in The New York Times, the Consumer Financial Protection Bureau (CFPB) has filed a complaint against what the newspaper calls “the nation’s student loan serving behemoth,” alleging that the lender took unnecessary shortcuts in addition to deceiving and cheating borrowers. According to the CFPB’s complaint, Navient “failed customers at every stage of repayment.”
What else should you know about the CFPB’s complaint against Navient? If your student loans are serviced through Navient, how might the complaint impact you?
Specific Deceptive and Unfair Lending Practice Allegations Against Navient
As the article clarifies, the allegations against Navient, a accompany that “oversees $300 billion in student loans for 12.5 million borrowers,” are numerous. The complaint alleges some of the following:
  • Failure to accurately apply borrower payments;
  • Failure to make clear steps that customers can take in order to keep their student loan repayment at a manageable rate; and
  • Reported that veterans, who may be eligible for federal loan forgiveness, defaulted on their loans when they had not actually done so.
The complaint sounds a lot like those aimed at mortgage servicers during the foreclosure crisis, The New York Times suggests. The article draws a comparison between Navient’s practices and the “mortgage foreclosure machine [that] chewed up and spit out troubled borrowers, adding junk fees and costs of unnecessary services to the amounts they owed,” and “even foreclosed on borrowers when they had no right to.”
While Navient Denies Allegations, Consumers Protection Advocates Question Current Regulatory Practices
Navient has denied the allegations against it, describing them as “false allegations.” The student loan servicer contends that it “leads the industry in income-driven repayment plans and has the lowest level of severely delinquent borrowers and the lowest default rates.” Navient is a contractor for the U.S. Department of Education, and it is currently the “largest company in education loan portfolio management, servicing, and collection” in the country.
Will the complaint lead the Department of Education to reconsider the current contract is has with Navient? The Department has yet to issue a formal answer to such a question, emphasizing only that it will continue taking steps “to ensure the interests of the government and of student borrowers are protected.” Yet in response to the allegations against Navient, consumer protection advocates have begun questioning whether there are “sufficient protections” in place to protect debtors from unfair and deceptive lending practices, particularly when it comes to student loans. The company previously settled an investigation conducted by the U.S. Department of Justice and the Federal Deposit Insurance Corporation (FDIC) for $60 million, following allegations that Navient “had been illegally overcharging military families as far back as 2005.”
Contact an Oak Park Consumer Protection Lawyer
Do you have student loans that are currently being service by Navient? Do you have questions about whether you may have been the victim of deceptive or unfair lending practices? You may be able to file a claim for compensation. You should discuss your case with a consumer protection attorney in Oak Park as soon as possible. Contact the Emerson Law Firm today to discuss your case.
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