AG Hood Launches Lawsuit Against Student Loan Lenders

July 24, 2018

Our office issued the information below this insert in a press release regarding the lawsuit Attorney General Jim Hood filed against Navient on July 17, 2018. The following information is an update for persons contacting our office regarding the Navient lawasuit:

Thank you for contacting the Office of the Mississippi Attorney General regarding the lawsuit Attorney General Jim Hood filed against Navient on July 17, 2018. In the lawsuit, the Attorney General charges Navient and two related entities with deceptive and unfair practices in violation of Mississippi’s consumer protection laws. The lawsuit seeks, among other things, an injunction requiring these companies to change their practices.

Importantly, the Attorney General’s lawsuit is not a consumer class action. Consumers have filed nationwide class action lawsuits against Navient, Sallie Mae, and other loan servicing companies. Additionally, the Consumer Financial Protection Bureau also has filed a lawsuit seeking restitution and damages for consumers. For information about the CFPB’s lawsuit, please visit https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-nations-largest-student-loan-company-navient-failing-borrowers-every-stage-repayment/. You may also file a complaint with the CFPB by visiting https://www.consumerfinance.gov/complaint/getting-started/.

Mississippi Center for Justice Consumer Protection Division Director Charles Lee and Advocacy Director Beth Orlansky joins Attorney General Jim Hood in announcing the launch of a lawsuit against student loan lenders.

Attorney General Jim Hood and the Mississippi Center for Justice are fighting in court for thousands of Mississippians who were financially affected by deceptive student loan lender Navient Corporation from 2000 to present. The pair filed a lawsuit last week against Navient Corporation, Navient Solutions, LLC, and Sallie Mae Bank, alleging widespread abuses across all aspects of its student loan business, including misleading borrowers about payment options that resulted in higher monthly payments that many could not afford.

The complaint, which was filed in Hinds County Chancery Court, asks the court to order Navient to stop its unfair and deceptive practices targeting Mississippi students, reform its loan servicing practices, give up unlawfully gained profits, and provide damages to the state. Specifically, General Hood believes the company pushed risky and expensive subprime loans, which were designed to fail, to student loan borrowers, specifically targeting low-income borrowers. The complaint alleges Navient charged excessively high interest rates and fees, despite evidence that these loans would likely default at extraordinarily high rates, potentially destroying the livelihoods and futures of many student loan borrowers.

The complaint also alleges that when borrowers contacted Navient because they could not make their monthly federal student loan payments, Navient disregarded the many available borrower-friendly income based repayment plans and instead, steered borrowers into successive and costly forbearance periods, neglecting to provide information necessary to receive or maintain enrollment in these income-based plans. This conduct is alleged to have harmed thousands of Mississippi student loan borrowers, in violation of the Mississippi Consumer Protection Act, as well as millions of student loan borrowers across the country.

“Navient’s conduct is estimated to have added $4 billion to the national student loan debt,” said General Hood. “Students are the future of our state, and the presence of companies in Mississippi that knowingly take advantage of students who need the money to continue their education will not be allowed under my watch.”

“Sixty percent of Mississippi student loan borrowers are in debt due to student loans, and this debt is crippling to those who are trying to be financially independent,” said Mississippi Center for Justice Consumer Protection Director Charles O. Lee. “Having their loan servicer increase the difficulty of repayment is unconscionable.”

The Mississippi Center for Justice wants to know if you are a victim of Navient’s deceptive business practices. Fill out this form if you have experienced what is described above, and an MCJ representative may contact you for further information.

Click here for a copy of the complaint. 

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