Attorney General Becerra Joins Amicus Brief in Support of Pennsylvania Lawsuit Against Navient

SACRAMENTO – California Attorney General Xavier Becerra today, as part of a coalition of 32 attorneys general, filed an amicus brief in the U.S. Court of Appeals for the Third Circuit in support of Pennsylvania’s lawsuit against student loan servicer Navient for misconduct in the servicing and collection of federal student loans. In the brief, the coalition argues that the federal Higher Education Act does not preempt Pennsylvania’s state law claims and that Pennsylvania may sue Navient under the federal Consumer Financial Protection Act, adopted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 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.

“State attorneys general are the frontlines of consumer protection enforcement,” said Attorney General Becerra. “Navient profited from the misery of parents and students who sacrificed to pay for college. Last year alone, the company earned profits of $395 million, while American consumers scrambled to cover over $1.5 trillion in outstanding student loan debt. 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. Today’s brief makes clear that states retain important consumer protection enforcement authority in the student loan servicing market.”

Pennsylvania sued Navient in federal court for misconduct in servicing and collecting on federal student loans. For example, despite advertising through the Navient website and telling students that their company could help identify options and solutions that were right for borrowers, and would minimize borrowers’ total interest costs, the company instead steered students towards options that were more costly.

In June 2018, Attorney General Becerra filed a lawsuit against Navient and its subsidiaries. In the lawsuit, Attorney General Becerra alleges that Navient unlawfully misled student loan borrowers, engaged in illegal collections practices, and steered borrowers to more costly repayment options.

Attorney General Becerra has relentlessly pursued protections for Californians struggling with student loans, including improvements in federal student loan servicing and debt relief and assistance for defrauded students. 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 the 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 in 2017, Attorney General Becerra 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. In October 2018, and again in August 2019, Attorney General Becerra called on Secretary DeVos and Federal Student Aid Acting Chief Operating Officer Jim Manning to address the 99 percent denial rate for Public Service Loan Forgiveness applications. This program helps student loan borrowers who aspire to give back to their country or community by working in a public service field. In May 2019, Attorney General Becerra sent a letter urging the Department of Education to discharge the student loans of tens of thousands of veterans who were disabled as part of their service, by developing an automatic discharge program.

Attorney General Becerra joins the attorney generals of New York, Alaska, Colorado, Connecticut, Delaware, Hawai‘i, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia in filing the amicus brief.

 A copy of the brief can be found here.