Archive

Go to:

October 2017
SMTWTFS
1234567
891011121314
15161718192021
22232425262728
293031
< Sep Nov >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

CFPB Sues Largest Servicer of Student Loans for Illegal Practices
Thursday, January 19, 2017 6:45 AM

On Wednesday, the CFPB announced that it is suing Navient, the nation’s largest servicer of federal and private student loans, for creating obstacles to repayment for borrowers by providing bad information, processing payments incorrectly, and failing to act when complaints were lodged. 

Navient, formerly part of Sallie Mae Inc., services the loans of more than 12 million borrowers, including more than 6 million under its contract with the Department of Education. Altogether, it services more than $300 billion in federal and private student loans.

Named in the CFPB’s lawsuit are Navient Corporation and 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.

The bureau charges that Navient violated the Dodd-Frank Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act. Specifically, the lawsuit claims that Navient:

  • Fails to correctly apply or allocate borrower payments to their accounts;
  • Steers struggling borrowers toward paying more than they have to on loans;
  • Obscures information consumers need to maintain their lower payments;
  • Deceives private student loan borrowers about requirements to release their co-signers from the loan; and
  • Harms the credit of disabled borrowers, including severely injured veterans.

The CFPB’s lawsuit was filed in the U.S. District Court for the Middle District of Pennsylvania.