The government or more specifically the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient, the nation’s largest student loan service provider last week. Navient is the twin sister to the head of the student loan mafia, Sallie Mae, Inc. that services the loans of more than 12 million borrowers, including my own. As a loan service provider, they manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. The suit was filed on January 18th with another following just days before the transition of presidential power.
According to the CFPB Director, Richard Cordray, “Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.” Some of the most pressing allegations include failing to correctly apply or allocate borrower payments to their accounts, steering struggling borrowers toward paying more than they have to on loans, obscured information consumers needed to maintain their lower payments and deceived private student loan borrowers about requirements to release their co-signer from the loan.
What That Means for You?
If this lawsuit is successful, consumers affected by Navient’s alleged misdoings may receive some monetary restitution. Don’t get too excited yet. This is not a class-action suit that you can sign up for. According to ClassAction.org, “Attorneys usually find out those who were affected by looking at the defendant’s records in a phase of the litigation known as the discovery phase. People who could be covered by the suit are usually sent a notice or check in the mail. The agency that filed the lawsuit will also have information on their website about the suit and who can claim money in the event of a settlement”.