Attorneys General Sue Navient for Deceptive Loan Practices

These days, more than 50% of jobs offering salaries above $35,000 a year require a college degree. Couple that statistic with the fact the average amount of student loan debt per borrow in 2018 was $35,359, an issue becomes readily apparent. More students than ever are graduating from college with tens of thousands of dollars in debt — and delaying major life decisions because of it. Student loan debt in America is a crisis that impacts millions of borrowers. Collectively, we have $1.5 trillion in debt from student loans, more than auto loans, credit card debt, and any non-mortgage debt.

Unfortunately, many students struggle to make ends meet and wind up accruing thousands of dollars in interest on top of their already massive loan debt. To make matters worse, lenders like Navient Corporation are facing charged and legal action that claims they used deceptive and predatory practices that have pushed students even deeper into debt.

Federal Lawsuit Against Navient Filed in Pennsylvania

Attorneys General across the country have taken a stand against Navient on behalf of consumers. With 12 million borrowers, including 300,000 from Michigan and $300 billion in federal and student loans in their hands, Navient is the nation’s largest provider of student loans and has been accused of artificially inflating the sum of individual loans through deceptive practices.

Critics have charged that Navient has been pushing borrowers into forbearance agreements rather than encouraging income-based loans. Forbearance agreements give borrowers more time to pay off loans; however, while loan payments are on hold, they keep accruing interest. These types of agreements usually require more money or collateral upfront and can sometimes force borrowers to give up certain rights. Over time, borrowers’ loans balloon to amounts that may keep them in debt for decades. In extreme cases, borrowers struggle to pay off the interest alone and go years without paying back the original debt as any payment made goes towards the interest remaining on the loan as opposed to the principal balance.

Recently, Pennsylvania Attorney General Josh Shapiro sued Navient with the support of AGs from 30 other states, including Michigan’s Attorney General Dana Nessel. The lawsuit, filed in the U.S. Court of Appeals for the Third Circuit in Pennsylvania in 2017, argues that Navient engaged in deceptive practices to find borrowers.

Nessel filed a statement criticizing the company’s use of forbearance. An internal memo from 2010 revealed that Navient encouraged employees to steer borrowers into forbearance. This document and others were part of a lawsuit that the Consumer Financial Protection Bureau filed against Navient in 2017.

As part of a statement on the lawsuit, CFPB Director Richard Cordray claimed that “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.”

Since 2014, the Attorney General’s office in Michigan has received 57 complaints about Navient, while the Consumer Financial Protection Bureau has received 1,600 since 2011. The Attorneys General hope to seek justice from the lawsuit, including penalties and an injunction against Navient. They argue that they have an interest in protecting their residents from unfair and deceptive business practices.

Choose a Debt Settlement Lawyer to Reduce Your Student Loan Burden

Attorneys with McCarthy Law PLC have extensive experience assisting consumers in reducing their private student loan debts. There are many options for settling student loan debt, including attempting the negotiations on your own. Yet, when results matter, you should trust a professional to negotiate the best deal possible.

There are many advantages to working with a debt settlement lawyer to reduce student loans. A lawyer is in a better position than anyone else offering debt settlement to help you and has better resources to negotiate fair deals. Some creditors refuse to work with non-lawyer debt settlers; however, to date, no one has refused to work with McCarthy Law PLC. If a creditor files a lawsuit against you, we can work to settle the claim.  Hiring a lawyer from the start can save you considerable time and money compared to starting your journey with a non-legal debt settlement firm.  This is particularly true regarding the settlement of debts in which the creditor has filed a lawsuit on. Non-legal debt settlement firms are significantly limited in their ability to reach settlements on those accounts.  This is an issue McCarthy Law PLC is not faced with.

McCarthy Law PLC offers free consultations, so there’s no risk involved in learning what your most viable solutions are for private student loan debt. We can also match the fees of another debt settlement company if you find one offering lower fees than ours. Call 855-976-5777 or complete our contact form to get started.

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Michael Adams

Michael Adams

Michael Adams focuses his practice in debt litigation and consumer protection. Michael regularly assist clients through the debt settlement process as well as ensuring their rights as consumers are protected. Michael is an Arizona native who received his undergraduate degree from the University of Arizona and his law degree from Arizona Summit Law School where he excelled academically.