A servicer is often different from the lender, and borrowers typically have no control over which company is assigned to service their loans. When facing unemployment or other financial hardship, borrowers rely on their student loan servicer to help them enroll in alternative repayment plans or request a modification of loan terms. They manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. Servicers are a critical link between borrowers and lenders. Named in today’s lawsuit are Navient Corporation and two of its subsidiaries: Navient Solutions is a division responsible for loan servicing operations Pioneer Credit Recovery specializes in the collection of defaulted student loans.
Altogether, it services more than $300 billion in federal and private student loans. It services the loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the Department of Education. Too many borrowers paid more for their loans because Navient illegally cheated them and today's action seeks to hold them accountable."įormerly part of Sallie Mae, Inc., Navient is the largest student loan servicer in the United States. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. "For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans," said CFPB Director Richard Cordray. The Bureau seeks to recover significant relief for the borrowers harmed by these illegal servicing failures. Through shortcuts and deception, the company also illegally cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans. For years, Navient, formerly part of Sallie Mae, created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained. – Today the Consumer Financial Protection Bureau (CFPB) is suing the nation’s largest servicer of both federal and private student loans for systematically and illegally failing borrowers at every stage of repayment.
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