Obama’s Parting Gift to the Company Formerly Known as Sallie Mae: A Big Fat Lawsuit

On the last day of the Obama administration, the Consumer Financial Protection Bureau wanted to give millions of Americans with student loan debt a little gift: filing a lawsuit against Navient (formerly known as Sallie Mae) for grimy, misleading practices. BuzzFeed reports :

Among the most serious allegations is the claim that Navient systematically pushed struggling borrowers away from income-based repayment plans and into a quick, short-term solution known as forbearance, potentially costing consumers money more in interest while saving Navient time and paperwork. Forbearance is designed for borrowers facing a brief period of financial hardship, not those who are in long-term financial distress.

“Navient chose to subvert its obligations as a servicer in favor of shortcuts,” said Richard Cordray, the CFPB’s director.

In a statement on its website, the company dismissed the CFPB’s allegations, saying “The timing of this lawsuit — midnight action filed on the eve of a new administration — reflects their political motivations.”

Join me in a collective eyeroll at Navient. They might have a new name, but they seem to be doing the same stuff that made the name “Sallie Mae” send chills down the spine of student loan borrowers nationwide.

While the CFPB will undoubtedly be gutted during Trump’s time in office, Navient can’t count on totally escaping culpability just yet:

[A]ttorneys general in Illinois and Washington State also announced lawsuits against Navient and Sallie Mae alongside the CFPB’s, alleging the companies had operated an illegal subprime lending scheme and debt collection violations. The suit by Lisa Madigan, Illinois’s attorney general, accuses both companies of “rampant abuses.”

Tough luck, Navient.  ¯\_(ツ)_/¯

Source: www.dailykos.com www.dailykos.com

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