Navient and Sallie Mae Lawsuits

If you’re reading this article, you’ve probably heard of the Navient and Sallie Mae lawsuits. You may have wondered what they’re all about, but you might not be aware of the fact that they are both under investigation. These lawsuits allege that Navient violated the Consumer Protection Act and engaged in deceptive practices. They also made subprime loans and failed to respond to borrowers’ complaints.

Navient violated the Consumer Protection Act

A complaint filed against Navient alleges that the company misrepresented the suitability of its income-driven repayment plans and the fact that it was willing to work with borrowers who were in a financial crisis. This misrepresentation, according to the complaint, disadvantaged borrowers and was in the best interest of Navient. The complaint also claims that Navient failed to provide adequate financial counseling to borrowers. It also alleges that Navient failed to implement adequate policies and procedures, which may have contributed to the borrowers’ financial distress.

While the Court found that Navient did not breach the Consumer Protection Act, the court found that the Complaint fails to identify any underlying legal duty to make the borrowers aware of the omissions. Despite the lack of a corresponding underlying legal duty, the Court found that Navient’s active conduct created a duty to act by its statements. The Court agreed that this duty did exist and dismissed the case against Navient.

Navient engaged in deceptive practices

Attorneys general from Washington and Illinois have filed a suit against Navient for allegedly engaging in deceptive practices with private student loans. They say the company had high-interest rates and fees and made loans to students at for-profit schools that were not accredited. These practices resulted in high default rates and deceptive advertising. The suit alleges that Navient accelerated the use of private student loans by increasing fees and interest rates while disregarding evidence that these students are in financial need.

In a separate case, the states charged that Navient inflated borrowers’ bills, and lured them into forbearance and debt consolidation programs that were expensive. This settlement calls for $260 per borrower and is the largest ever made by Navient. Attorneys general in the participating states was pleased with the settlement and expected the company to improve its debt collection and servicing practices.

Navient made subprime loans

Navient has been accused of making private subprime loans to students from for-profit colleges. The company allegedly failed to tell students that they could opt-out of the loan by offering other repayment options, such as forbearance. This practice echoes the subprime mortgage crisis, which caused widespread foreclosures and the 2008 financial crisis. Now, Navient is agreeing to pay out the remaining balances of nearly $1.7 billion in subprime private student loans. But the scandal may have ruined borrowers’ credit scores for years.

The settlement resolves claims by the federal government that Navient engaged in unfair and deceptive lending practices. In particular, the company allegedly steered borrowers into loan forgiveness and forbearance programs while issuing subprime private student loans to predatory for-profit institutions. Navient has consistently denied any wrongdoing and this settlement carries no admission of liability. Still, the settlement will provide long-overdue relief to Navient borrowers. However, many of the borrowers may not be entitled to the full amount of restitution that the settlement offers.

Navient failed to respond to borrowers’ complaints

In the first quarter of 2017, the Consumer Financial Protection Bureau (CFPB) received more consumer complaints against Navient than any other company in the country. The CFPB’s findings are troubling because Navient failed to provide adequate customer service and respond to complaints. While the company may have made some mistakes, it did not respond to consumer complaints for six months. As a result, a lawsuit has been filed against Navient to recover borrowers’ financial losses.

The CFPB’s investigation against Navient began almost three years ago when the company disclosed that it was under investigation by the agency. The CFPB was threatening to fine Navient, demand restitution, and change its business practices. The company, which services more than 12 million student loans, argues that it has to stop the illegal conduct before it can fully compensate borrowers. Navient claims that the CFPB is trying to retroactively impose new servicing standards and requirements on it.

Settlement reached with Sallie Mae

The largest student loan servicing company in the country, Navient, has settled a suit brought against it by state attorneys general over its deceptive lending practices. The company will pay $142 million in direct restitution to student borrowers and state attorneys general and will invest the rest in state initiatives. The company will also have to stop deceptive practices that led borrowers into debt traps. In addition to the $142 million settlement, Navient is now under new regulations that limit the company’s lending practices and collect late fees.

The settlement amounts to $60 million in compensation and includes key provisions to protect servicemembers. Sallie Mae must delete any negative credit history entries from servicemembers’ credit reports, make the process easier for them to notify the company of their eligibility for SCRA benefits, provide customer service representatives specially trained to serve military clients, and pay a civil penalty of $55,000 to the government. This settlement is a significant victory for students who were harmed by the company.

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