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Navient Hit with First Class Action Following CFPB Lawsuit

As the ink dries on a massive lawsuit filed this week by the Consumer Financial Protection Bureau (CFPB) against Navient, the nation’s largest student loan servicer has now been hit with a proposed consumer-filed class action claiming it intentionally put up roadblocks to prevent student loan borrowers from repaying their loans.

Specifically, defendants Navient Corporation and Navient Solutions, Inc. allegedly misapplied student loan payments so they could collect the maximum possible amount of accrued interest—i.e. the “main source of revenue” for student loan servicers, the suit says—on each loan serviced.

“[Navient’s] goal in taking a systematic, intentional, and malicious approach to servicing student loan debtors’ loans is to prevent student loan debtors from paying down loan principal, such that the maximum amount of interest on each loan services will accrue,” the lawsuit alleges. “Ultimately [the defendants] attempt to prevent student loan debtors from saving money, as every dollar and cent saved by a student loan debtor is money lost for [Navient].”

The 18-page lawsuit alleges that when student loan borrowers decrease the principal amount of their loans quicker than scheduled, loan servicers lose money on accrued interest. Navient’s “unfair, deceptive, and unlawful” business practices, the case claims, allegedly included constructing an “opaque, vague, and intentionally confusing payment application system,” the purpose of which was to thwart the intentional pre-payment of student loans by debtors.

How Do I Join this Class Action?

Generally, consumers do not need to do anything to join a class action. In most cases, you only have to take action in the event a lawsuit settles and the time has come to claim a piece of the settlement. When a case resolves, class members – that is, those covered by the lawsuit and potentially eligible for a settlement – will be sent a notice via e-mail or regular mail about how they can claim their money. Plaintiffs’ attorneys usually obtain the defendants’ records in these types of lawsuits, which helps them identify class members and how they can be reached.

Remember, class actions are filed by a person or group of people on behalf of a larger group of hundreds or sometimes thousands of individuals. You can learn more about why you don’t necessarily need to “join” a class action here.

If you’re concerned about your rights and have questions about this lawsuit, you may wish to speak to an attorney in your area.

What’s the Difference Between the CFPB’s Lawsuit and this Class Action?

This lawsuit, as opposed to the cased filed by the Consumer Financial Protection Bureau, was brought by an individual consumer on behalf of a larger group of people. The lawsuit filed earlier this week by the CFPB was not a class action, but rather a lawsuit filed by a government entity that sought injunctive relief and damages against Navient.

Who Does This New Lawsuit Cover?

This lawsuit proposes a nationwide class and Florida-specific subclass. They are defined as follows:

  • “The Nationwide Misapplication Class includes all individuals currently residing in the United States or who entered into student loan contracts in the United States that have made at least one intentional, partial pre-payment on any private loan serviced by Navient, and, such intentional, partial pre-payment was incorrectly applies against future interest payments and purported fees, and who are not bound by an arbitration agreement.”
  • “The Florida Misapplication Subclass covers all individuals currently residing in Florida or who entered into student loan contract sin Florida, that have made at least one intentional, partial pre-payment on any private loan serviced by Navient, and, such intentional, partial pre-payment was incorrectly applied against future interest payments and purported fees, and who are not bound by an arbitration agreement.”

The full complaint can be read below. 

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