State AG sues student loan company, alleging unfair and deceptive practices

The suit says that Navient instead encouraged borrowers to enter forbearance (temporarily stopping payments altogether) because it required less paperwork and fewer staff resources. The company characterized the complaints as “midnight action filed on the eve of a new administration” and blasted what it called “agenda-driven ultimatums”. Now, Illinois Attorney General Lisa Madigan wants them to pay up for “peddling risky and expensive subprime loans” that were “designed to fail”. Navient has a responsibility to its customers, shareholders, and employees to defend itself-publicly and in court-against this unsubstantiated, unjustified and politically driven action.

This may have caused increased monthly payments, a lose of interest subsidies and progress made toward loan forgiveness.

A growing number of borrowers 65 and older also said that their Social Security benefits – often the only source of regular retirement income for older Americans – had been seized because of unpaid student loans, according to the report. We could easily route student loan payments right to Uncle Sam. It’s not always the same company that lent you money in the first place.

According to Attorney General Madigan, while the student loan company has made billions of dollars lending to hopeful students, numerous loans that were given out carried extremely high interest rates, hidden fees, and were often distributed to students attending poorly-accredited, for-profit schools.

With a record of default blemishing their credit, it would be hard to impossible for these disabled borrowers to take out mortgages or other loans, open credit cards, and even pass background checks.

Navient contracts with the Department of Education to manage federal student loans.

Navient flatly denied most of allegations in a statement, saying the lawsuit reflects the bureau’s “political motivations”, but a representative for the company wouldn’t respond to repeated questions from Mic about the CFPB’s claims regarding veterans.

It is possible to switch student loan servicers through federal consolidation or student loan refinancing. “When you do get an answer, if you call back, it’s going to be something different”, said Phetteplace.

But you can also simply switch to an income-based repayment plan that would set your payments at zero.

However, she says more needs to be done.

In fact, Navient lobbyists funded ads during presidential debates depicting CFPB as a Soviet-style politburo controlling all lending decisions that must be stopped. Madigan said tens of thousands of IL students were negatively affected and now are on the hook for those questionable loans. He said he read the complaint. “That has dramatically informed our work around improving the student loan servicing market”. She said she owes more than $31,000 dollars in student loans with Navient. The percentage of students who couldn’t make payments within three years stood at 11.3 percent last year.

When you can’t scrounge up the money to cover your student loan bill, forbearance can sound like a dream option. Keep in mind, though, that each of the following options has risks. Some can have their debt forgiven after 20 or 25 years of monthly payments.

Madigan claims that over decades, Navient grew its student loan company into one of the country’s largest by “engaging in practices that repeatedly harmed borrowers”.

If this lawsuit leads to even a fraction of that student loan debt being reduced as a penalty, that would make a lot of people very happy.