An estimated 1.5 million Navient student borrowers live in California
SACRAMENTO -- California Attorney General Xavier Becerra today announced that he will be filing a lawsuit this week against Navient Corporation (Navient) and its subsidiaries, Pioneer and General Revenue Corporation, for misconduct in the servicing and collection of federal student loans. Navient services approximately $300 billion in federal and private student loans held by 12 million borrowers. An estimated 1.5 million Navient borrowers live in California.
“Navient exploited every family’s dream of witnessing our children graduate from college. Our families are now facing a student loan debt crisis. America’s college students owe $1.5 trillion in outstanding student loans — more than the entire amount Americans owe in credit card debt. It’s $123 billion in federal student loan debt in California alone,” said Attorney General Becerra. “Navient’s loan servicing abuses have compounded the misery of parents and students who sacrificed to pay for college. Our students can’t afford to be cheated out of any more money than they legally owe simply because Navient knew how to game the system. We are ready to hold Navient accountable.”
In the lawsuit, Attorney General Becerra will allege that Navient, which contracts with the federal Department of Education to service federal student loans, violated California’s Unfair Competition and False Advertising Laws by:
In the lawsuit, Attorney General Becerra will further allege that Navient’s subsidiaries, Pioneer and General Revenue Corporation, also violated California’s Unfair Competition and False Advertising Laws. Once a borrower defaults on his or her student loan, the loan is typically assigned to a private firm for collection. Navient has assigned thousands of California student loans to its subsidiaries, Pioneer and General Revenue Corporation. Attorney General Becerra will allege that Pioneer and General Revenue Corporation:
Attorney General Becerra has relentlessly pursued debt relief and assistance for defrauded students in California. Since taking office, he has announced an outreach program encouraging thousands of affected California residents to apply for federal loan cancellation. He has filed lawsuits against the U.S. Department of Education and Secretary Betsy DeVos for illegally withholding promised student loan debt relief for tens of thousands of students of now-defunct, predatory for-profit Corinthian Colleges and for unlawfully delaying key federal regulations – the Gainful Employment Rule and Borrower Defense Regulations – that would help protect students and taxpayers from misconduct by for-profit schools. Additionally, Attorney General Becerra recently announced a settlement against Aequitas Capital Management that secured more than $51 million in debt relief for Californians who attended Corinthian and a settlement against Balboa Student Loan Trust that secured another $67 million. In 2017, Attorney General Becerra sued Ashford University, another for-profit school, and its parent company, Bridgepoint Education, for unlawful activity against its students; that lawsuit is pending in Alameda County Superior Court. He has also denounced the Trump Administration’s decision to eliminate the CFPB office dedicated to protecting students.
Californians who believe they are victims of Navient’s misconduct should file a complaint at www.oag.ca.gov/report with the California Attorney General’s Office. Victims may also call (800) 952-5225 or send a letter to: California Department of Justice, Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244-2550.