The Consumer Financial Protection Bureau (CFPB) today announced that it is suing Navient Corporation –the nation's largest servicer of student loans– for "systematically and illegally failing borrowers at every stage of repayment."
"If these allegations are true, Navient's behavior is as egregious as the actions of banks leading up to the 2008 – 2009 financial crisis", said Rhode Island General Treasurer Seth Magaziner. "The student loan crisis continues to threaten the financial security of millions of Americans. As shareholders, we have a responsibility to ensure that Navient is providing a level playing field for their customers and have a credible plan for how to address growing levels of debt and delinquency."
Rhode Island General Treasurer Seth Magaziner filed a shareholder proposal with Navient in December 2016 asking the student loan servicer to conduct a comprehensive review of the company's ability to adequately serve customers in, or at risk of, default and to share the report with investors.
The CFPB suit alleges that Navient, the nation's largest servicer of both federal and private student loans, created obstacles to repayment and illegally cheated many struggling borrowers out of their rights to lower repayments.
An estimated 8.1 million federal student loan borrowers are currently in default, with one in every four student loan borrowers in either delinquent or in default. In Rhode Island, an estimated 64% of college graduates have student loans, with an average debt of $32,920, according to the non-profit Institute for College Access & Success.
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