On Friday, June 29, 2018, California Attorney General Xavier Becerra brought suit in California Superior Court for the County of San Francisco against student loan servicer Navient Corp. and two of its subsidiaries, Pioneer and General Revenue Corp.
The complaint alleges that Navient violated California’s unfair competition and false advertising laws since the company did not sufficiently disclose how borrowers could be considered for income-driven repayment recertification plans, thus guiding borrowers to more expensive repayment plans. The complaint further alleges that Navient misrepresented the “present amount due” to borrowers late on payments. Navient’s subsidiaries are charged with misrepresenting the credit benefits of rehabilitating defaulted loans and providing false information on collection fees associated with rehabilitation.
Navient services approximately $300 billion in federal and private student loans for twelve million borrowers. Approximately one and a half million of Navient’s borrowers reside in California. Jack Remondi, Navient’s Chief Executive, stated that the company and other loan servicers did not “design the complex and confusing repayment options and enrollment requirements for borrowers” and described the allegations as “unfounded.”
Additional Reading
California Atty. Gen. Xavier Becerra files lawsuit against student loan servicing firm Navient, Los Angeles Times (June 29, 2018)
Complaint for Permanent Injunction, Civil Penalties, Restitution, and Other Equitable Relief