Navient and Pioneer Credit have been sued for their handling of student loans.
The complaint alleges that “Navient has failed to perform its core duties in the servicing of student loans, violating Federal consumer financial laws as well as the trust that borrowers placed in the company.”
The allegations involve both loan servicing and student loan collections
As a bit of background, Navient is the nation’s largest student loan servicer, servicing over 12 million borrowers. Pioneer Credit is a subsidiary of Navient, and Pioneer is responsible for the collection of defaulted student loans. The lawsuit was filed by the Consumer Financial Protection Bureau (CFPB).
In terms of Navient’s loan servicing, the complaint alleges that:
- “Navient steered these borrowers experiencing financial hardship that was not short-term or temporary into costly payment relief designed for borrowers experiencing short-term financial problems, before or instead of affordable long-term repayment options that were more beneficial to them in light of their financial situation.”
- “For borrowers who did enroll in long-term repayment plans, Navient failed to disclose the annual deadline to renew those plans, misrepresented the consequences of non-renewal, and obscured its renewal notice to borrowers who were due for renewal.”
- “Taken together, these practices prevented some of the most financially vulnerable borrowers from securing some or all of the benefits of plans that were intended to ease the burden of unaffordable student debt.”
In terms of Pioneer’s collection of defaulted student loans, the complaint alleges:
“In seeking to enroll consumers in the rehabilitation program, Pioneer systematically misled consumers about the effect of rehabilitation on the consumer’s credit report and overpromised the amount of collection fees that would be forgiven by enrolling in the program.”
How this lawsuit impacts student loan borrowers
Right now, the allegations in the complaint are just that—allegations. It is possible that the ultimate resolution of the lawsuit could impact consumers.
Of course, it is also possible that the ultimate resolution will have no effect whatsoever. Regardless, it will likely take quite some time for the lawsuit to be resolved.
In other words, the lawsuit is worth keeping tabs on to see if it will impact you down the road.
Perhaps the more important takeaway is that all consumers should pay close attention to their student loans. If you feel something is not right with your student loans, or if you have been contacted by a debt collector about your student loans, its a good idea to talk to an attorney.
When to contact an attorney
Student loans are complicated, confusing, and can feel overwhelming. I can help provide clarity, help you choose a course of action, and feel confident in your situation.
Whether you are dealing with debt collection of student loans, questions about wage garnishment, or understanding your repayment options, feel free to contact me to see if I can help.