In one customer’s case cited in the Illinois state lawsuit, Navient “acknowledged<br />the repeated errors that occurred each month but offered no solutions.”<br />Many of Navient’s private student loans — those made outside the federal loan program — required<br />borrowers to obtain a co-signer, who is legally on the hook for making sure the loan is repaid.<br />To release a co-signer from a loan, Navient requires the borrower to make a minimum number — usually 12 — of “consecutive, on-time payments.” But if someone did not make a payment one month because their bill was $0, Navient treated<br />that as a failure to make “consecutive” payments — and it then reset the borrower’s consecutive-month payment count to zero.<br />Many of Navient’s customers — nearly half of those with direct federal loans,<br />according to Navient — did manage to enroll in income-based repayment plans.<br />When borrowers sent in lump-sum payments with instructions to pay off a specific loan, Navient sometimes<br />instead divided the payment among all of the loans in the borrower’s account, the consumer bureau said.<br />From 2000 to 2009, Navient’s predecessor company, Sallie Mae, from which it split off in 2014, made private,<br />subprime loans to borrowers it knew were likely to default, the state attorneys general said.<br />In particular, the company is said to have pushed many customers toward forbearance, which lets<br />borrowers stop making payments for up to 12 months — though interest continues accruing.
