Consumer Financial Protection Bureau V. Navient Corporation Et Al

Case Background

On January 18, 2017, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient Corporation, Navient Solutions, Inc., and Pioneer Credit Recovery, Inc., accusing them of unlawful practices in managing and collecting student loans. The Bureau sought restitution, damages, penalties, and other remedies for violations of federal consumer protection laws. The consumer protection lawsuit was filed in the United States District Court, Pennsylvania Middle (Scranton), with Honorable Robert D Mariani presiding. [Case Number: 3:17cv101]

Cause

Defendant Navient Solutions, Inc., a wholly-owned subsidiary of Navient Corporation, is a Delaware corporation. Navient, formerly Sallie Mae, Inc., is the largest student loan servicer in the United States. It manages loans for over 12 million borrowers, including six million under a U.S. Department of Education contract. Despite its role to assist borrowers with repayment plans and manage accounts, Navient failed in key responsibilities, breaching federal laws and borrowers’ trust. Navient discouraged borrowers from enrolling in income-based repayment plans, which offer long-term relief by adjusting payments based on income. Instead, the company pushed many struggling borrowers into short-term, costly forbearance options. Borrowers who enrolled in income-driven plans faced additional hurdles, as Navient failed to notify them of annual renewal deadlines or misrepresented the consequences of missing those deadlines. These failures caused significant financial harm, including sudden payment increases. The company also misreported information about borrowers, including disabled veterans, to credit agencies, fal