STATEMENT: Borrower Advocates Applaud New Navient Ban from Federal Student Loan Servicing
“This is a giant step toward stopping predatory actors like Navient from preying on student borrowers”
BOSTON (Sept. 12, 2024) – The Project on Predatory Student Lending (PPSL), the leading legal organization representing student borrowers against predatory for-profit colleges, applauded the Consumer Financial Protection Bureau (CFPB) announcement today that it has reached a settlement with Navient. Once entered by the court, the settlement will ban Navient from federal student loan servicing and order the company to pay $120 million for its widespread failures.
Navient recently outsourced its portfolio of predatory, for-profit loans to another failed servicer, MOHELA, which PPSL sued earlier this month for its failure to implement the discharges of fraudulent student loans as ordered by the Department of Education.
Statement from Eileen Connor, President and Executive Director of the Project on Predatory Student Lending:
"This is a giant step toward stopping predatory actors like Navient from preying on student borrowers and we applaud the CFPB for taking action to hold Navient accountable for the decades of harm it has caused. Navient (as Sallie Mae) made billions of dollars pushing subprime private student loans on unsuspecting students as part of their conspiracy with disgraced, behemoth for-profit colleges like ITT, Art Institutes, and Corinthian, and is now refusing to provide relief to the borrowers they participated in harming. Any future servicer of Navient loans is on notice—this is a toxic portfolio of debt with legal obstacles to collection. It's not just the federal student loan portfolio that we’re concerned about. The private market is ripe with abuses, has failed borrowers for decades, and cannot be ignored. We urge the CFPB to continue to hold lenders and servicers accountable to students, taxpayers, and the law – for both federal and privately-held student loans.”
PPSL has represented borrowers in numerous lawsuits against Navient, seeking to have their fraudulent loans canceled. Although private student loan borrowers do have protections in their contracts against the repayment of loans based on school or lender misconduct, lenders have failed to honor borrower rights on private student loans by failing to offer a clear path or process to relief. PPSL has worked alongside borrowers for years to create a pathway for private student loan borrowers to receive relief, including by filing several lawsuits against Navient on behalf of individual borrowers and highlighting the issue to regulators.
About the Project on Predatory Student Lending
The Project on Predatory Student Lending (PPSL) is the leading legal organization representing student borrowers against predatory for-profit colleges and the policies that enable institutions to exploit and cheat students. PPSL uses bold, strategic litigation and advocacy to demand accountability in the higher education space and influence policy solutions to create a more just and affordable education system. PPSL represents more than one million student borrowers and its work has resulted in cancellation of more than $22 billion of fraudulent student loan debt.
