PA Attorney General sues Navient

WILKES-BARRE, LUZERNE COUNTY) WBRE/WYOU - It was business as usual at Navient inside the Hanover Industrial Park.  But the student loan servicing company is accused of deceptive practices and predatory conduct.

 

Attorney General Josh Shapiro is suing Navient for "steering student borrowers into short-term loan forbearances that instead continued for the long term  accruing interest and adding to the loans' principal that students were required to repay."

 

"It's terrifying because a lot of students, we're starting with nothing. It's hard enough on us already," said Wilkes University student Allyson Sebolka.

Shapiro's lawsuit also claims Navient made predatory loans to students attending colleges with graduation rates lower than 50 percent, despite knowing a high percentage of students would not be able to repay them.

Pennsylvania joins a list of other states that have sued Navient. Officials in Illinois and Washington have also claimed the servicing company engaged in unfair practices.

The Consumer Financial Aid Protection Bureau offers an outlet to those who want to submit a complaint about their student loan service provider. As of September, more than 1000 Pennsylvania residents filed complaints against Navient through the bureau's website.

If you are a student or recent graduate and need to know who your loan servicer is.. head to studentaid.gov.

 

Lisa Stashik, the head of Navient's Wilkes-Barre office has released this statement to Eyewitness News:

"The claims peddled by our Pennsylvania Attorney General are not only unfounded, they demean the work of my colleagues. For more than 29 years, I have worked with our Wilkes-Barre employees to service millions of student loans, and process all of the payments made to Navient by its customers nationwide. Thanks to our talented, dedicated teams, Navient is a leader in helping student loan borrowers succeed in repayment. In fact, in fact, 49 percent of balances serviced by Navient for the government are enrolled in income-driven repayment plans and borrowers with Navient-serviced loans are 37 percent less likely to default than those serviced by other organizations. I am proud of this record and our team, which I believe, will prevail over these false allegations. "

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