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 every phase of payment, ” according to a news release Wednesday. The CFPB is asking Navient to pay 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’ve been false and politically determined. The education loan giant, which broke removed from Sallie Mae Bank, among the biggest loan providers of personal figuratively speaking, in 2014, presently solutions a lot more than $300 billion in federal and student that is private for over 12 million borrowers.
The Illinois and Washington solicitors basic also filed matches against Navient on Wednesday. Navient said in subsequent statements that allegations because of the Illinois and Washington lawyers basic were additionally politically driven and “unfounded. Wednesday”
“Time will tell” what effect these legal actions have actually on borrowers, claims Betsy Mayotte, manager of customer outreach and conformity at United states scholar Assistance, a nonprofit that assists students purchase college.