Class Action Lawsuit Against Navient Student Loans
The class-action lawsuit against Navient was filed in December of 2016. It is the first time in state history that a student loan company has been found in violation of the Consumer Protection Act. The complaint alleges that Navient made private loans to students at for-profit colleges and universities with low graduation rates. The company knew that a high percentage of its students would not be able to repay the loans but decided to proceed with the case regardless.
In February of this year, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient, alleging that it deceived borrowers.
The Consumer Financial Protection Bureau has filed an appeal against Navient, and the case is currently ongoing. As of early 2022, it is unclear when a final ruling will come. Although the case is still ongoing, the plaintiffs’ attorneys have already won some victories.
In the lawsuit, nine borrowers allege that Navient deceived them by applying payments to interest instead of paying principal. Moreover, they claim that the company capitalized interest and steered payments to lower interest rate loans. Moreover, the website of Navient did not provide an amortization schedule for its borrowers, and the plaintiffs alleged that Navient did not offer these borrowers an amortization schedule on their loan documents.
The plaintiffs allege that Navient violated the Securities Exchange Act of 1934 and SEC Rule 10b-5.
The complaint alleges that Navient violated the SEC’s regulations and harmed borrowers by failing to fulfill their contractual obligations. Whether the case will be successful or not will depend on the strength of the plaintiff’s evidence and how strong the company can fight these baseless claims. This is the reason that the case is being filed.
In June of 2020, nine borrowers alleged that Navient defrauded hundreds of thousands of borrowers by steering them into a forbearance or repayment program, and in some cases, steered them to loans with lower interest rates. Ultimately, the plaintiffs’ lawsuit against Navient will provide debt relief to over 400,000 student loan borrowers. In addition, the lawsuit will affect a large number of borrowers and consumers.
While Navient’s settlement with borrowers will settle the claims, the class action lawsuit will not proceed as a class action.
The court has agreed that the company did not owe a fiduciary duty to borrowers. The lawsuit is currently being filed in the U.S. District Court. The attorneys are Joseph Tripodi, James Van Splinter, Lisa Simonetti, and Rebecca Zizek of Greenberg Traurig.
In June 2020, nine borrowers filed a class-action lawsuit against Navient. They alleged that Navient improperly applied their payments toward interest and steered them to lower-interest loans. The plaintiffs claimed that the company did not provide a schedule for its borrowers, which made the loans unsustainable. Nevertheless, the plaintiffs have not been successful in proving that their attorneys were incompetent.
The plaintiffs have not established the class-action status of the Navient lawsuit.
The judge has ruled that the company owed no fiduciary duty to borrowers. The case is titled Manetta et al. v. Navient Corp. et al. and the case number is 20-cv-07712. The plaintiffs’ attorneys are Xavier Billiard, James Van Splinter, and Joseph Tripodi of Greenberg Traurig. Both are familiar with the Thomson Reuters Trust Principles.
The Navient lawsuit alleges that the company improperly served student borrowers with loans owned by the Department of Education. It has also been alleged that Navient “steered” borrowers away from income-driven repayment plans. It is important to note that the class action lawsuit against Navient has been settled. A settlement will end the litigation. However, the defendants are still fighting the claims. The case is likely to last until the middle of the year, after which it will have to pay a substantial amount of damages.
The American Federation of Teachers and nine other plaintiffs claim that Navient deceived members of the federation by providing false information.
The American Federation of Teachers alleged that Navient was negligent in failing to disclose the details of its application for public service loan forgiveness, which allows certain not-for-profit employees to pay their federal student loans. The lawsuits were filed in the Eastern District of New York and will continue to go on for another year.