CFPB says student loan giant Navient cheated borrowers

The nation’s largest student loan servicer was hit with a Consumer Financial Protection Bureau lawsuit Wednesday over allegations that it has “systematically and illegally” failed borrowers.

Navient, formerly part of Sallie Mae, created repayment obstacles for tens of thousands of student borrowers by providing incorrect payment information, processing payments incorrectly and failing to act when borrowers complained, according to the federal lawsuit filed in the middle district of Pennsylvania.

The company also cheated borrowers out of their rights to lower repayments, according to the CFPB lawsuit, which seeks financial relief for student borrowers who were harmed.

“For years, Navient failed consumers who counted on the company to pay back their student loans,” said CFPB Director Richard Cordray. “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”