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Sallie Mae Navient Lawsuit Files 40 State Attorney General Complaints

Today, King County Superior Court Judge Veronica Galvan ruled that Navient violated Ferguson’s consumer protection rights by providing her with a student loan that was not the same as her own. She also set a trial date for April 18, 2022, for a full trial on Ferguson’s additional claims. The lawsuit claims that Navient broke federal consumer protection laws by charging fees that were not reasonable in comparison to the loan’s value.

CFPB

The CFPB is suing Sallie Mae and its subsidiary Navient for violations of the Fair Debt Collection Practices Act. The allegations claim that Navient failed to accurately allocate payments to borrowers’ accounts and made errors in the allocation of payments to fees, interest, and principles. These practices resulted in thousands of borrowers’ credit scores being damaged. The CFPB is seeking billions of dollars in restitution.

The CFPB and the Illinois Attorney General’s office are alleging that Navient cheated borrowers out of their repayment rights. These allegations stem from the fact that Navient handled millions of borrowers and failed to disclose repayment information on time. These borrowers were pushed into forbearance when they were not fully prepared to pay. In addition, Navient improperly allocated payments to borrowers, and knowingly underpaid them.

39 state attorneys general

A recent settlement in a Sallie Mae Navient lawsuit has 40 state attorneys in general involved. The settlement involves a proposed Consent Complaint and Consent Judgment. This settlement will affect six to six thousand borrowers who took out loans through Navient for private education. The settlement will include interest subsidies and the forgiveness of the remaining balance after ten to twenty years. If it is approved by the court, the settlement will be implemented immediately.

Under the terms of the settlement, Navient must notify borrowers of changes to its PSLF program. Navient has steered students into forbearance and away from important federal student loan relief programs. Forbearances are temporary solutions for financial hardship and do not count toward loan forgiveness terms such as the Public Service Loan Forgiveness program or Income-Based Repayment. Public service loan forgiveness requires a minimum of 10 years of public service.

Massachusetts attorney general

The Massachusetts attorney general is involved in a legal battle against the student loan company Navient. Navient originated predatory private loans to students at for-profit colleges and universities, knowing that a high percentage of borrowers would not repay their loans. This practice spawned the 2008 subprime mortgage crisis that led to foreclosures and the financial meltdown. According to Healey, Navient knowingly violated consumer protection laws by making these loans.

The California Attorney General’s Office is also involved in the case. The lawsuit accuses Navient of violating the state’s Unfair Competition Law and False Advertising Law by steering vulnerable borrowers into costly forbearances and failing to inform them of the benefits of income-driven repayment programs. The lawsuit seeks to make Navient follow strict guidelines for lending and collecting private student loans.

Pennsylvania attorney general

The Pennsylvania attorney general is investigating whether the student loan servicer Navient violated the state’s laws with its predatory lending practices. The company, based in Delaware, created financial incentives for customer-service representatives to sell students risky loans and push them into forbearance plans. The federal government does not directly administer student loan servicing programs, but it does hire companies to do so and impose certain rules on them. The Pennsylvania attorney general believes that the company violated these rules by offering enticing loans to students, only to push them into forbearance plans that ultimately failed.

A class-action lawsuit has been filed by the Pennsylvania attorney general against Navient. The company was found guilty of steering borrowers deeper into debt by offering them a chance to postpone payments and charge interest on those delays. The attorney general of Pennsylvania Josh Shapiro says that Navient’s tactics amounted to “false advertising” and led to many students defaulting on their loans.

California attorney general

A class-action lawsuit brought by the California attorney general alleges that Navient abused its responsibilities by steering students into unpayable private student loans and failing to offer affordable repayment plans. As a result, the company is canceling the balances of nearly $1.7 billion in private student loans. But this cancellation will affect students’ credit scores for years to come. The settlement also requires Navient to refund borrowers some of the money they have already paid, including certain payments that were sent to Navient after June 30, 2021.

The class-action lawsuit states that Navient steered students away from crucial federal student loan relief programs. The company has agreed to pay out nearly $95 million in restitution payments to approximately 357,000 borrowers, or $261 million to 43,000 Californians. The company will also agree to cancel more than $66,000 in borrowers’ subprime private student loans. Californians will also receive $261 million in debt cancellation.

Mississippi attorney general

The Mississippi attorney general’s office is pursuing a settlement with the nation’s largest student loan servicer, Navient, in connection with its illegal practices. Navient agreed to eliminate approximately $8.2 million in private debt from the accounts of Mississippi borrowers, completing the deal last week. The agreement calls for the company to cease the collection of loans and erase negative credit information. If approved, borrowers in Mississippi can expect to be debt-free within 90 days.

A settlement with Navient could mean the end of the case, which the company says is unnecessary. Navient has fought the lawsuit for months and has even made statements that the company was acting by its statements. The company has also stepped up its efforts to reach decision-makers, including the Consumer Financial Protection Bureau. The company has met with top leaders of the federal consumer bureau and hired two former Democratic attorneys general to advise the company. Additionally, the company has begun contributing to networking groups that help state attorneys raise campaign money.

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