FOR IMMEDIATE RELEASE
January 24th, 2017
CONTACT: Natalia Abrams
SDC Statement on CFPB Lawsuit Against Nation’s Largest Student Loan Company, Navient
We applaud the Consumer Financial Protection Bureau (CFPB) for taking strong action against Navient/Sallie Mae, by filing three separate lawsuits. The cases highlight a myriad of illegal behavior designed to maximize profits by taking advantage of students. For years, student loan borrowers have complained about deceitful practices from one of our nation’s largest student loan servicer. We have consistently heard from our members about the devastating harm Navient has caused them and their families. From overcharging borrowers to providing inaccurate repayment information, Navient has cost people millions of dollars, destroyed their credit, and left families to pick up the pieces caused by their servicing errors. One of the most unsettling findings in the CFPB’s lawsuit is the irreparable harm Navient has done to our service members and veterans. It is important that we continue to fund the CFPB. Actions like the ones take against Navient/Sallie Mae are vital for the financial success of Americans everywhere.
Learn more from the Consumer Financial Protection Bureau:
Consumer Financial Protection Bureau sues nation’s largest student loan company Navient for failing borrowers at every stage of repayment
WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) is suing the nation’s largest servicer of both federal and private student loans for systematically and illegally failing borrowers at every stage of repayment. For years, Navient, formerly part of Sallie Mae, created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained. Through shortcuts and deception, the company also illegally cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans. The Bureau seeks to recover significant relief for the borrowers harmed by these illegal servicing failures.
“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs,” said CFPB Director Richard Cordray. “Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.”
Formerly part of Sallie Mae, Inc., Navient is the largest student loan servicer in the United States. It services the loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the U.S. Department of Education. Altogether, it services more than $300 billion in federal and private student loans. Named in today’s lawsuit are Navient Corporation and two of its subsidiaries. Navient Solutions is a division responsible for loan servicing operations. Pioneer Credit Recovery specializes in the collection of defaulted student loans.
Servicers are a critical link between borrowers and lenders. They manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. When facing unemployment or other financial hardship, borrowers rely on their student loan servicer to help them enroll in alternative repayment plans or request a modification of loan terms. A servicer is often different from the lender, and borrowers typically have no control over which company is assigned to service their loans.
Starting in 2009, the vast majority of federal student loan borrowers gained a right to make payments based on how much money they earn by…