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State Lawsuits Claim Lender Navient Preyed on Students

Image: State Lawsuits Claim Lender Navient Preyed on Students
(AP Photo/Kristoffer Tripplaar)

Monday, 10 Apr 2017 06:35 PM

Two state lawsuits filed by attorneys general in Illinois and Washington are charging student loans lender Navient engaged in predatory practices, extending billions in loans that should have never been made, The New York Times reported.

"These loans were designed to fail," Shannon Smith, chief of the consumer protection division at the Washington State attorney general's office, told the Times.

According to the Times, details unsealed last month in the state lawsuits against Navient – a spinoff of SLM Corporation, better known as Sallie Mae – shed light on how Sallie Mae used private subprime loans, some of which it expected to default at rates as high as 92 percent, as a tool to build its business relationships with colleges and universities.

Now the attorneys general in Illinois and Washington — backed by a coalition of those in 27 other states, who participated in a three-year investigation of student lending abuses — want those private loans forgiven.

Ashley Hardin, who enrolled in 2006 at the Brooks Institute of Photography, borrowing more than $150,000 for tuition, has a balance that has only dropped by $1,000 after eight years of payments, the Times reported.

"I've cried on the phone several times," she told the Times about her fights with Navient, adding her loan bill has prevented any savings for what she and her husband hope will be their future.

"We want to open a sandwich shop," she told the Times. "The money could be going toward that."

Wilmington, Del.-based Navient has denied any wrongdoing and is fighting the lawsuits, the Times reported.

Sallie Mae said in a statement Navient "has accepted responsibility for all costs, expenses, losses, and remediation arising from this matter," the Times reported.

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Two state lawsuits filed by attorneys general in Illinois and Washington are charging student loans lender Navient engaged in predatory practices, extending billions in loans that should have never been made, The New York Times reported.
student, loan, debt, Navient
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2017-35-10
Monday, 10 Apr 2017 06:35 PM
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