The U.S. Customer Financial Protection Bureau is suing Navient Corp., the nation’s largest student loan servicer, accusing it of “systematically and illegally failing borrowers at each phase of payment, ” according to a news release Wednesday. The CFPB is asking Navient to compensate the borrowers the agency states had been harmed.
The CFPB alleges that since at least January 2010, Navient misallocated payments, steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release among other things.
Navient denied the CFPB’s allegations in a declaration Wednesday, saying they have been false and politically determined. The education loan giant, which broke faraway from Sallie Mae Bank, among the biggest loan providers of personal student education loans, in 2014, presently solutions significantly more than $300 billion in federal and personal figuratively speaking for over 12 million borrowers.
The Illinois and Washington solicitors basic also filed matches against Navient on Wednesday. Navient stated in subsequent statements that allegations by the Illinois and Washington solicitors basic were also politically driven and “unfounded. Wednesday”
“Time will tell” what effect these legal actions have actually on borrowers, states Betsy Mayotte, director of customer outreach and conformity at United states scholar Assistance, a nonprofit that assists students pay money for college.