Navient Accused of Engaging in Deceptive Loan Practices
Navient Corporation (NAVI) emphasized the company’s commitment to compliance and customer centricity in its public filings, noting its “customer first” approach. However, the complaint alleges that rather than helping its customers as the company advertised, Navient engaged in deceptive practices to facilitate the origination of subprime loans. In addition, Navient steered student borrowers into payment plans that postponed bills, allowing interest to accumulate, rather than helping them enroll in income-driven repayment plans. On October 5, 2017, Pennsylvania Attorney General Josh Shapiro announced the filing of a lawsuit against Navient alleging that the company engaged in unfair and deceptive lending and failed to offer proper prepayment plans to students. On this news, Navient’s stock fell $2.10 per share, or over 14%, to close at $12.60 per share on October 5, 2017, and has yet to recover from this drop.