Washington Attorney General Bob Ferguson has filed a lawsuit against the nation’s largest student loan servicer, Navient Corporation. The suit accuses Navient of numerous unfair and deceptive practices affecting thousands of Washingtonians and driving up costs.
Ferguson says these include improperly steering financially distressed students toward short-term forbearances, issuing subprime loans to students attending for-profit colleges with low graduation rates and engaging in aggressive and misleading collection tactics.
“The issue of student loans and the crushing debt that students and graduates have in our state in significant," Ferguson said. "And it is compounded by entities like Navient who do not play by the rules and make life exceedingly difficult for those borrowers to do the simplest of tasks.”
The suit is the culmination of a multi-year investigation together with the state of Illinois and the federal Consumer Financial Protection Bureau, which also filed suit Wednesday. The suits seek restitution on behalf of borrowers as well as fines against the company.
Navient is a recent offshoot of the federal education finance giant Sallie Mae. Navient officials have called the allegations unfounded and politically motivated.
At the same time, Ferguson announced legislation his agency is backing to create a Student Loan Bill of Rights for the state, modeled after similar laws in California and Washington D.C. It would provide more resources for student borrowers and establish standards for servicers like Navient.
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