Last Jan. 25, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient Corporation, the largest student loan provider in the United States for "systematically and illegally failing borrowers at every stage of repayment." The lawsuit alleged that Naviant performed illegal activities thereby cheating customers.
In his statement published on the website of Zacks, CFPB Director Richard Cordiay gave its customers a feeling of being cheated. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today's action seeks to hold them accountable."
According to the website of Forbes, the CFPB also accused Navient of improperly directing borrowers into forbearance when these borrowers were eligible for income-driven repayment plans. The company also did not provide sufficient information to customers on these plans regarding their deadlines to prevent them from staying eligible.
The website of Investor Place laid down the different allegations of CFPB against Navient and they are the following:
- Improper allocation or application of borrower payments
- Steering borrowers away from repayment plans with reduced monthly payments
- Activity was done several times but still did not do something to fix the issue unless a borrower clarifies the problem
- While borrowers have a right to these plans, the company may have driven them to forbearance instead
- Deliberately making renewal of lower payment plans hard for customers
- Deceiving borrowers about requirements for freeing their co-signers from their loans
Meanwhile, Naviant Corporation said that it will defend itself from the allegations made by the CFPB. It claimed that the points raised in the lawsuit are ünfounded and politically motivated. Furthermore, Naviant claimed that the standards asserted by regulators are inconsistent with that of the Department of Education and could greatly harm student loan borrowers, which includes higher defaults.
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