Get Out of Debt Guy - Steve Rhode

Navient Stock Falls As PA Attorney General Sues Them Over Bad Acts


Today the Pennsylvania Attorney General Josh Shapiro filed suit against Navient. The suit claims Navient engaged in:

The suit filed may also provide some benefit to those with Navient private student loans as well. Attorney General Shapiro is fighting for Pennsylvania residents and asks the court to order:

Navient has of course called the lawsuit “completely unfounded” but it also is an advancement on this suit previously filed against Navient where they seemingly admit they don’t provide best advice to student loan debtors.

Navient also engaged in lending for a number of schools and courses that were not protected in bankruptcy and could be discharged.

The lawsuit filed also claims Navient was deficient in cosigner releases, payment processing errors, and steering debtors into the wrong solutions for their financial difficulties.

You have to love this nugget in the suit, “In the years after 2007, Defendants were sued in various capacities for certain practices, including a lack of appropriate underwriting. One such lawsuit filed in 2009 in the Southern District of New York, In Re SLM Litigation, alleged that the then CEO, Thomas Fitzpatrick, in a 2007 internal executive meeting summarized Defendants’ private education loan underwriting standards by stating, “If the borrower can create condensation on a mirror, they need to get a loan this year”

I don’t know if this new case against Navient is going to be the tipping point but at some point will we ever be able to hold Navient accountable at all for passing out loans that were clearly going to be unaffordable, poor performing, or to schools that were not accredited? Do lenders have any responsibility for the student loan crisis or is it just always going to be the fault of the consumer for believing the lender and the schools marketing hype?

Here is what I know for almost absolutely certain, Navient is going to fight back hard on this suit. They always do.