Regulators, Consumers Target Student Debt Servicer Navient

Sampson is far from alone in experiencing frustrations dealing with Navient, which services $300 billion in student debt, about a quarter of all federal and private loans nationally.

The company is facing lawsuits in Illinois and elsewhere from federal and state regulators, as well as consumers, over a range of business practices, including allegedly making unauthorized robocalls, doing a poor job of tracking payment processing errors, steering borrowers into costlier repayment options and misapplying payments.

The U.S. Consumer Financial Protection Bureau sued Navient earlier this year in federal court in Pennsylvania, accusing the company in a news release of “systematically and illegally failing borrowers at every stage of repayment.”

Meanwhile, Illinois Gov. Bruce Rauner last week vetoed a bill Illinois lawmakers sent him earlier this summer that would have created new rights for customers of Navient and other student debt servicers.

Among other measures, the proposed law would have required the companies to give borrowers clear information about how they could pay their loans and the amount of payments, including fees assessed, the total amount due for each loan, payment due dates and interest accrued during billing cycles.

“While the intent of this bill to support struggling student-loan borrowers is laudable, the bill, as written, encroaches on federal government’s responsibilities and would add confusion to the already complex student loan process,” Rauner said in a veto message, pledging to work with the U.S. Department of Education and Congress to address problems in the industry.

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