We’ve received a number of comments and emails from readers who are essentially all asking the same question: what’s going on with the Navient lawsuits?
Unfortunately, there’s not much to report. For the most part, the cases against the embattled student loan servicer are still making their way through the court system – and, even though it’s been a while since our last update, it might still be months or even years before we have a final resolution.
But while you’re waiting, here’s a handy list of the most notable Navient lawsuits that are still open. Read on to see if you’re covered by one of these suits (it’s best not to just assume you are) and find out what you can do while you’re waiting. Plus, we have information on how to file a new lawsuit if you feel like you’re not covered by the existing litigation.
Lawsuits Filed by the Government
The Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) filed suit against Navient, formerly known as Sallie Mae, back in January 2017. According to the agency, Navient “systematically and illegally fail[ed] borrowers at every stage of repayment” by:
steering them toward costly forbearance instead of affordable repayment plans; processing payments incorrectly; misreporting to credit bureaus the status of disabled borrowers’ loans; and misleading borrowers about how to release cosigners from their loans.
The lawsuit seeks to provide “appropriate restitution” – that is, possible monetary compensation – to all “consumers harmed by [the defendants’] unlawful conduct.”
Alongside the CFPB, the attorneys general of several states – including Pennsylvania, Illinois, Washington, California, and Mississippi – have filed their own lawsuits against Navient.
Echoing many of the allegations presented in the CFPB suit, these cases are aimed at stopping Navient from continuing its allegedly unlawful practices by, among other demands, seeking to impose civil penalties on the student loan servicer that range from $1,000 to $10,000 per violation. But depending on how it all shakes out, borrowers may be able to see some compensation too.
Can I Join One of These Lawsuits?
In short, no. These cases have been filed by government agencies and are not class actions. However, they may be able to provide some form of compensation to many people who were harmed by Navient’s actions. Speaking of class actions, though…
Class Actions Against Navient
Navient has been hit with quite a few class action cases – most of which are centered around the company’s loan servicing and debt collection practices. Read on for a quick summary of the most notable cases and who they’re looking to cover.
Note: Each section will describe a proposed group of people a particular suit is looking to cover. In the legal space, we call this group a “class.”
It’s important to note that who’s included in the class can change at any time. So even though each case is proposing to cover a specific group of people, it’s not guaranteed until the judge gives his or her formal OK on the matter. This generally happens when and if the case is near resolution in the form of a settlement.
Cases About Loan Servicing Practices
Travis v. Navient Corporation et al.
A New York resident filed a proposed class action lawsuit against Navient in August 2017 alleging the student loan servicer harmed borrowers by steering them toward forbearance instead of guiding them through the process of applying for income-driven repayment plans that would provide lower monthly payments and a possible opportunity for loan forgiveness.
The case is seeking to cover anyone who borrowed a direct student loan from the federal government and had at least one loan serviced by Navient or a predecessor between January 1, 2010 and the present, and who was placed into forbearance.
Hyland et al. v. Navient Corporation et al.
Update: On April 24, 2020, the parties in this case filed a proposed settlement agreement that looks to resolve the remaining claim in the lawsuit.
Under the proposed agreement, Navient would be forced to adopt “meaningful practice enhancements,” including by implementing more proactive measures to help determine whether borrowers could be eligible for PSLF and inform them of the program’s availability, the settlement states.
According to court documents, the deal would also grant a $1.75 million cy pres award to a newly formed organization that would be tasked with counseling and educating borrowers employed in public service positions.
As for proposed class members, the settlement notes that although those covered by the lawsuit will release claims against Navient for injunctive relief and the right to pursue aggregate actions for damages, they will retain the right to sue for individual damages.
Read more about the settlement here.
Update: On July 7, 2019, the federal judge overseeing this case dismissed all claims against Navient except the claim that it violated the New York General Business Law.
This likely means that the case will now only cover New York residents or those who took out their loans in New York, as the remaining count applies to a state-specific sub-class.
When we reached out to the attorneys handling the case, they referred us to this press release. We’ll keep you updated as we learn more.
Navient was hit with another proposed class action in October 2018 on behalf of public service professionals such as teachers, nurses, and police officers who were allegedly misled by Navient about the federal government’s Public Service Loan Forgiveness (PSLF) program.
The suit says that because Navient failed to properly guide borrowers through the process of qualifying and applying for PSLF and instead steered them toward other repayment options, they ended up paying “millions if not billions” more than they would have had their loans been reduced or forgiven.
The case is seeking to cover all those with Federal Family Education Loans (FFEL) or direct student loans serviced by Navient who have been employed full-time by a qualifying public service employer and have contacted Navient regarding their eligibility for the PSLF program.
The lawsuit also proposes a nationwide “injunctive” class of individuals who fit the above description and intend to contact Navient in the future regarding PSLF eligibility. When a lawsuit asks for “injunctive relief,” it’s seeking to stop the defendant from continuing its allegedly illegal practices so the same thing doesn’t keep happening to people in the future.
Cases About Debt Collection Practices
DeWitt v. Navient Corporation et al.
A student loan borrower filed a lawsuit in September 2017 alleging Navient improperly reported that her loans were in default after they had been fully paid off through a consolidation agreement with Commerce Bank.
The case is seeking to cover all individuals in the United States who were subjected by the defendants to the “improper, wrongful, unfair, or deceptive debt collection practices” described in the case and who suffered damages as a result.
Obeleagu v. Navient Solutions, LLC et al.
Update: On June 21, 2019, the plaintiff and defendant notified the court that they have reached a private settlement, meaning this lawsuit will be dismissed.
A proposed class action that hit federal court in February 2018 alleges that Navient filed debt collection lawsuits against consumers in Maryland despite not being licensed as a debt collector in the state.
The case is seeking to cover all current and former student loan borrowers in Maryland who faced a collection lawsuit that was initiated by or maintained at the request of Navient within the three years prior to February 7, 2018.
The case is also seeking to cover a second proposed class of individuals who fall into the above category and also had a judgment entered against them, though no time limit is mentioned for this second group.
Cruz v. Constar Financial Services, LLC et al.
Update: On June 25, 2019, Navient was dismissed as a party to this lawsuit.
A proposed class action filed in January 2019 claims Navient and several debt collectors, including Constar Financial Services (CFS), sent the plaintiff misleading collection letters that failed to:
properly identify his creditor; state that his debt was accruing interest and fees; and inform him that the statute of limitations on the debt had expired.
The case is seeking to cover anyone who received a letter from CFS dated between January 31, 2018 and the present that was attempting to collect a past-due debt and was “in a form materially identical or substantially similar to” the plaintiff’s letters.
One of These Lawsuits Applies to Me. How Do I Join?
Generally, you don’t need to do anything to join a class action lawsuit. If the case settles, class members should receive notice (usually by mail) along with instructions on how to claim part of the settlement. You can learn more about that process here.
How Long Is This Going to Take?
Unfortunately, there isn’t a solid answer for this question. Some lawsuits settle quickly, and others can take months or years to reach resolution. There could be a number of reasons for that. The CFPB case, for example, has been facing a series of discovery battles. Though that sounds like a term out of a sci-fi movie, it’s actually a much less exciting process where both sides fight over how much information the defendant will be forced to turn over to the plaintiffs. Hurdles like this can delay a case’s progress.
It can be frustrating to wait, but rest assured that although these lawsuits may be moving along slowly, at least they’re moving.
So, What Can I Do in the Meantime?
Keep Paying Your Loans
It’s generally not a good idea to stop paying your student loans even if a lawsuit has been filed. Stopping payment could impact your credit and even result in legal action against you. If you need advice on how to handle your student loan debt while these lawsuits are playing out, you may want to talk to a lawyer or a credit counselor.
File a Complaint
If you want to take further action against Navient, you can file a complaint with the Consumer Financial Protection Bureau or your state’s attorney general office. The information you provide could prove helpful in the fight against Navient.
File a Lawsuit
Think your situation isn’t covered in one of the above lawsuits? Don’t worry, you still have options. If you’re concerned about your legal rights, you may want to consider reaching out to an attorney in your area for a free initial consultation. He or she should be able to help you understand your rights, how they’ve been affected, and what options you have, including whether you can file a new class action. Learn more about starting a class action here.