U.S. Government Sues Navient Student Loan Corporation

Navient (formerly part of Sallie Mae) has been sued by the Washington State Attorney General and the federal government. The government claims that Navient cheated borrowers out of loan rights. If you have student loans through Navient, you will want to pay attention to this lawsuit.

The Claim

The government claims that Navient pushed some borrowers into forbearance instead of making income-sensitive paperwork accessible. The claim states that the number of borrowers that have sought forbearance did so due to Navient employees pushing this option - Navient may have instructed employees to do so simply because it was an easier option that required less paperwork and staff.

In short, Navient may be cutting corners and cutting borrowers out of student loan rights simply due to short staffing. The suit also states that the company mistakenly reported some borrowers as defaulting on their loans when this was not the case - this, in turn, has ruined credit scores for various borrowers. Further, the suit notes that Navient mismanaged some funds when borrowers had multiple loans.

Loan Origination

The government also claims that Navient had issues with loan origination dating back to the year 2000. During that time the company was still part of the larger Sallie Mae Corporation. The suit notes that some borrowers were pushed into subprime loans that were set up to fail. All of this is big news for any borrower that has dealt with Navient or might still be doing so.

Any person that borrowed from Sallie Mae prior to the year 2010 might be impacted by this lawsuit. What can you do? At present, the lawsuit has just been filed, and there will be quite a bit of discovery to find out what really happened here. In my opinion, f the government can prove it’s case, you will see a settlement rather quickly. If not, Navient will dig in its heels and fight.

If you are a student loan borrower, are facing a default, or are unable to pay your student loans because of a hardship, you can have your student loan case evaluated by experienced attorneys by contacting the Dellutri Law Group today.