California Attorney General Xavier Becerra announced on Thursday that he’s filing a lawsuit against the nation’s largest student loan processor.
According to the attorney general’s office, Navient Corporation violated California’s Unfair Competition and False Advertising Laws.
The loan provider is allegedly putting students and parents at a huge disadvantage by:
- Steering vulnerable borrowers toward more expensive repayment plans;
- Failing to adequately disclose how students could attain income-driven repayment recertification;
- Misrepresenting the order in which it would apply overpayments;
- Misrepresenting the “present amount due” to delinquent borrowers; and
- Failing to properly discharge the federal student loans of borrowers with a total and permanent disability.
About 4.6 million Americans were behind in paying their student loans as of December which is double the amount from four years ago.
Becerra said in a statement from his office:
“Navient exploited every family’s dream of witnessing our children graduate from college. Our families are now facing a student loan debt crisis. America’s college students owe $1.5 trillion in outstanding student loans — more than the entire amount Americans owe in credit card debt. It’s $123 billion in federal student loan debt in California alone. “
“Navient’s loan servicing abuses have compounded the misery of parents and students who sacrificed to pay for college. Our students can’t afford to be cheated out of any more money than they legally owe simply because Navient knew how to game the system. We are ready to hold Navient accountable.”
The firm was previously sued by a federal watchdog, Illinois, Pennsylvania nad Washington last year.
Californians who believe they are victims of Navient’s misconduct should file a complaint at www.oag.ca.gov/report with the California Attorney General’s Office.