Luciano v. Navient
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On February 26, 2025, a student borrower in Illinois filed a proposed class action lawsuit against Navient for arbitrarily issuing blanket denials of student loan discharges where there is evidence of school misconduct and fraud. The lawsuit seeks relief for Illinois borrowers who applied for loan cancellation through Navient’s “School Misconduct Discharge Application,” which it quietly released in early 2024.
The lawsuit comes during a time when the federal government has taken significant steps to lessen oversight of the private market, including by weakening the power of essential agencies such the Consumer Financial Protection Bureau (CFPB).
About Luciano v. Navient
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Student borrowers are taking a stand against Navient’s unfair practices. A new class action lawsuit has been filed, exposing how Navient set up a sham process to deny student loan discharges despite clear evidence of school misconduct and fraud.
Navient quietly introduced a “School Misconduct Discharge Application” in early 2024, which PPSL helped circulate to borrowers. The application allows borrowers who experienced misconduct by their school to apply directly for discharge of private loans, marking a long overdue recognition of borrower rights. As awareness of the application increased, many began receiving arbitrary denials with no explanation.
The complaint, filed in the Circuit Court in Cook County, Illinois, states that the denials are unfair, inconsistent with widely available evidence, and violate consumer protection laws. Borrowers are demanding that Navient give them a fair review process and compensate them for disregarding their legal rights by denying valid applications at schools with known misconduct.
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February 26, 2025: Case is filed in the Circuit Court in Cook County, Illinois on February 26, 2025.
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For years, private student loan borrowers have faced limited options for relief when their schools engaged in fraud or misconduct. Unlike federal student loans, which offer Borrower Defense to Repayment, private loan borrowers have been left without a clear path to cancellation—even when their schools were shut down for illegal practices.
Navient introduced its School Misconduct Discharge Application in 2024, following increased pressure from the CFPB, members of Congress, and advocates like PPSL, seemingly giving borrowers an opportunity to seek loan relief based on documented school fraud. However, as applications increased, so did arbitrary denials—with no explanation, no transparency, and no chance to appeal.
This lawsuit challenges Navient’s failure to uphold its legal obligations and seeks to protect student borrowers from further harm. With federal oversight weakened, private lenders have been left unchecked—and this case is a crucial step in fighting back to protect borrowers’ rights.
Additional details on private student loans and resources can be found here. For general assistance from PPSL, get help here.
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February 26, 2025: Complaint
“When I got the Navient application I was so excited, assuming they knew there were issues with my school and I must qualify. Being denied was devastating, especially with no explanation or indication of what steps I could take to appeal the decision. I can see now that the process was rigged from the start and not based on actual evidence of school misconduct.
These schools wronged us and committed fraud, and Navient needs to be held accountable for disregarding the rights of borrowers like me who are seeking justice on our student loans.”
— Amanda Luciano, named plaintiff who attended the International Academy of Design & Technology
“Student borrowers have legal rights to loan cancellation when there is evidence of fraud, and Navient has not been fulfilling its duty under the law.
Navient knew from the day it made the loans that it was putting profit above students. This case is a prime example of what happens when the private market is empowered to profit off consumer fraud. Our clients are now forced to stand up for their rights at a time when the federal government has vacated this critical oversight role, and we will ensure that these denials cannot stand.”
— Eileen Connor, President and Executive Director of PPSL
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