The state of New Jersey sued Navient on Tuesday, alleging that the student loan management company was forcing borrowers to pay and owe more money than necessary through deceptive and deceptive practices.
In a lawsuit filed by the New Jersey attorney general and the consumer division, the state accused Navient of driving borrowers into loan forgiveness – a temporary pause in payments owed on a loan – and to move away from income-driven repayment plans, which generally extend the term and reduce the monthly payment owed.
New Jersey also reports that Navient failed to notify borrowers of their obligation to recertify that they were eligible for an income-based repayment plan and gave them inaccurate information about balances owed and co-signer obligations.
“Higher education should be a route to success, not a route to financial ruin,” said state attorney general Gurbir Grewal.
“With today’s lawsuit against Navient, we are taking action to hold one of the nation’s largest student loan managers accountable for the abuses that have made matters worse for New Jersey borrowers.”
Navient is responsible for collecting and processing student loan payments from over 400,000 borrowers who have received federal loans from the Department of Education. The company has faced a series of lawsuits from the Consumer Financial Protection Bureau (CFPB) and state attorneys general alleging similar mistreatment of borrowers.
“Not only are these baseless claims recycled, Navient has always provided excellent service to student loan borrowers, helping millions of people realize the benefits of higher education and successfully repay their loans,” the company said in a statement.
“As a service provider for the federal government, we have led enrollment in affordable payment plans and reduced default rates. In fact, more than half of the loan portfolio we serve is in an income-based repayment. “
CFPB fought with the education department for nearly three years during the secretary Betsy DeVosBetsy DeVosErik Prince involved in promoting experimental vaccine against COVID-19: Report that the Biden administration is reversing Trump-era policies that hampered investigations into student loan companies that DeVos ordered to testify in in a lawsuit for the cancellation of the PLUS student loanrefusal to provide the agency with documents relating to its legal action and its investigation into Navient.