Student loan servicer Navient illegally deceived borrowers, judge finds – By Jillian Berman (Marketwatch) / Mar 6 2021
Borrowers and their parents and grandparents were among those who suffered when Navient violated a state consumer protection law, the court ruled.
Student loan servicer Navient illegally deceived borrowers, parents, grandparents and others who put their credit on the line when they co-signed their relatives’ student loans and misled them about what it would take to release them from the obligation, a Washington state court ruled.
The ruling, made last month and released publicly Friday, marks the first time a court has found that the company violated a consumer protection law since state law enforcement officials and the federal government ramped up litigation against Navient over its student loan servicing practices about four years ago.
“Too many student loan borrowers in Washington are struggling to stay afloat,” Bob Ferguson, Washington’s attorney general, who filed the suit, said in a statement. “We will continue seeking accountability for Navient’s unlawful conduct and student loan relief for thousands of Washingtonians who were treated unfairly.”
The ruling came as part of a suit filed by the state of Washington in 2017 alleging the company illegally made the process of student loan repayment more difficult in a variety of ways, ultimately costing borrowers more money. The lawsuit also alleged that Navient’s corporate predecessor, Sallie Mae, illegally lured borrowers into expensive loans they couldn’t afford, leading to high default rates.
