In addition, Ferguson also announced his agency-request Student Loan Bill of Rights legislation, introduced this session, to provide more resources for students and establish standards for student loan servicers like Navient.
“Enormous student-loan debt is an issue for many Washingtonians,” Ferguson said. “I will hold companies accountable when they treat borrowers unfairly.”
The lawsuit, filed in King County Superior Court, accuses Navient, the nation’s largest student-loan servicer, of a number of unfair and deceptive practices. Those practices included improperly steering financially distressed students toward short-term forbearances, engaging in aggressive and misleading collection tactics and more.
While operating as Sallie Mae, Navient made subprime, predatory loans to students attending for-profit colleges with graduation rates lower than 50 percent, despite clear expectations that an extremely high percentage of students would not be able to repay them. Navient made these subprime loans as part of “preferred lending” programs with schools in order to gain access to highly profitable federally-guaranteed loan volume and “prime” private student loan borrowers.
The lawsuit may potentially impact thousands of Washingtonians, including anyone who received private student loans from Sallie Mae prior to 2009 and anyone who has their loan serviced by Navient and has experienced the alleged conduct.
Student loan borrowers who believe that they have been subject to these, or other, unfair or deceptive practices by Sallie Mae or Navient are encouraged to file a complaint with the Attorney General’s Office.
Anyone with questions about student loan servicers should read the Attorney General’s new student loan guide.
Ferguson urges students with questions about consolidating federal student loans to contact the Department of Education’s Loan Consolidation Information Call Center at 1-800-557-7392 before applying for consolidation.
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