One of Navient's employees speaking at a conference unrelated to their recent federal lawsuit.
As many Americans are struggling with their student loan debt—the default rate is around 11 percent —most consumers would like to believe that their loan servicing company is acting in their best interests. But Navient customers might want to take note of the company’s recent court filing in response to a federal lawsuit filed against it in January.
After being accused of "systematically and illegally" failing borrowers by the Consumer Financial Protection Bureau (CFPB), Navient responded by stating that there is no expectation that the servicer will act in the best interest of the consumer.
In fact, the company explicitly states that its goal is not to help their borrowers, but collect payments for its biggest client, the U.S. Department of Education. The department, Navient explained, didn’t agree to pay for the level of customer service the CFPB wants Navient to give.
This isn’t the first time Navient has had legal troubles. In 2014, it paid $97 million to the Department of Education, Department of Justice, and the Federal Deposit Insurance Corporation for charging extra fees to military members according to the Washington Post.
In a survey by The Student Loan Report, Navient leads the list in complaints per borrower. In 2016, both federal and private student loan borrowers filed nearly 3,000 complaints against the company to the CFPB.
As far as Navient’s response to this recent lawsuit, one source called it “among the most appalling statements” he’s heard and called for the Department of Education to fire the company no matter what the cost. While appalling, they may have a case in a legal sense which is mainly due to the somewhat undefined powers of the CFPB.
Image Copyright © Jack Markell