Navient Class Action Alleges Borrowers Misled About Loan Forgiveness

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A Navient class action lawsuit was just filed by nine public service workers who say they were misled about federal forgiveness programs.

The Navient class action lawsuit alleges that borrowers who could have benefitted from a forgiveness program because of their current employment were not given information about their options, allowing Navient to collect more money from those workers.

The Navient class action lawsuit is also backed by the American Federation of Teachers, and claims that Navient did not help borrowers see that the federal loan forgiveness program for certain public servants would have reduced payments and obligations.

The federal loan forgiveness program allows for the elimination of federal student loan debts if the borrower is working for certain nonprofits or for the government on a full-time basis, makes regular payments under the income-driven repayment plan and submits the necessary paperwork.

The borrowers who filed the Navient class action lawsuit say that the company had a responsibility to tell borrowers about their best repayment plan option, which in their case would have been the Public Service Loan Forgiveness plan. This federal program was first established in 2007 to promote employment in the public sector.

Some borrowers, according to the Navient class action lawsuit, were told the program wasn’t an option for them at all, whereas others were told by the company that they were on track to complete the program even when that was not the case.

The Navient class action lawsuit says that the student loan servicer is providing borrowers with inaccurate information that blocks them from getting the benefits of the program that would eliminate student loan debts.

The claims in the Navient class action accuse the servicer of generation fee revenue from borrowers while leaving the financial consequences with the borrowers.

The plaintiffs in this Navient class action include a nonprofit executive, academics, and school teachers.

Those plaintiffs argue that they now have to pay thousands of dollars in student loans that would have been forgiven under the public service program.

The Navient class action lawsuit seeks an award of damages but also an order mandating that Navient change the process through which they recommend repayment options.

The lawsuit alleges that the company isn’t just doing a disservice to borrowers, but has a program in place to pay employees based on their average call time.

The plaintiffs argue that the PSLF program requires a lot of information and paperwork, so employees are discouraged from providing information to qualified borrowers.

The plaintiffs seek to represent two nationwide Classes in addition to subclasses of borrowers in New York, Maryland, California, and Florida.

The Navient class action alleges unjust enrichment, negligence, and breach of contract.

Navient is currently facing other lawsuits filed by the Consumer Financial Protection Bureau and some state attorneys general over allegations of unfair loan-servicing practices.

The borrower plaintiffs are represented by Faith Gay, Maria Ginzburg, Lena Konanova and Maggie England of Selendy & Gay PLLC.

The Navient Student Loan Forgiveness Class Action Lawsuit is Hyland, et al. v. Navient Corp., et al., Case No. 1:18-cv-09031, in the U.S. District Court for the Southern District of New York.