The Consumer Financial Protection Bureau (“CFPB”) has filed a complaint against Navient Corporation (“Navient”) for violating federal regulations related to the servicing and collection of student loans. Among other things, the complaint alleges that Navient violated Federal consumer financial laws through its practices of systematically deterring numerous borrowers from obtaining access to some or all of the benefits and protections associated with long-term payment plans.

The CPFB’s Allegations Against Navient

According to the complaint, “[d]espite assuring borrowers that it would help them find the right repayment option for their circumstances, Navient steered these borrowers experiencing financial hardship that was not short-term or temporary into costly payment relief designed for borrowers experiencing short-term financial problems, before or instead of affordable long-term repayment options that were more beneficial to them in light of their financial situation.”

Further, “[f]or borrowers who did enroll in long-term repayment plans, Navient failed to disclose the annual deadline to renew those plans, misrepresented the consequences of non-renewal, and obscured its renewal notice to borrowers who were due for renewal. As a result, the affordable payment amount expired for hundreds of thousands of borrowers, resulting in an immediate increase in their monthly payment and other financial harm.”

Why Do Navient’s Violations Matter?

According to the CFPB’s complaint, “[m]ost federal student borrowers have a right under federal law to set their monthly student loan payment as a share of their income, an arrangement that can offer borrowers extended payment relief and other significant benefits.” Navient’s “. . . practices prevented some of the most financially vulnerable borrowers from securing some or all of the benefits of plans that were intended to ease the burden of unaffordable student debt.”

Who May Have Been Affected?

Navient was formerly part of Sallie Mae, Inc. and is the largest student loan servicer in the United States. According to the complaint, “Navient services the loans of more than 12 million borrowers, including over 6 million customer accounts under a contract with the U.S. Department of Education, and more than $300 billion in federal and private student loans.”

What Can Those Who May Have Been Affected Do?

The Kehoe Law Firm is ready to help.  Anyone with a student loan serviced by Navient can speak to an attorney for a free, no-obligation consultation by calling Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, or sending an e-mail to [email protected].

Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches.  Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.