Sallie Mae said in a statement that Navient “has accepted responsibility for all costs, expenses, losses and remediation arising from this matter.”<br />Perhaps more than any other company, Sallie Mae is synonymous in America with student<br />loans — and, in the years after the lending boom, crushing student debt.<br />New details unsealed last month in the state lawsuits against Navient shed light on how Sallie Mae used private subprime loans — some of which it expected<br />to default at rates as high as 92 percent — as a tool to build its business relationships with colleges and universities across the country.<br />But those accusations have overshadowed broader claims, detailed in two state lawsuits filed by the attorneys general in Illinois and Washington,<br />that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students like Ms. Hardin that never should have been made in the first place.<br />From 2000 to 2009, Navient’s predecessor company, Sallie Mae, from which it split off in 2014, made private, subprime<br />loans to borrowers it knew were likely to default, state attorneys general from Illinois and Washington said.<br />Those subprime loans were a bargaining chip, the government lawyers said, a tool Sallie Mae used to build relationships with schools so<br />that the company could make more federal loans to their students.<br />In recent months, the student loan giant Navient, which was spun off from Sallie Mae in 2014<br />and retained nearly all of the company’s loan portfolio, has come under fire for aggressive and sloppy loan collection practices, which led to a set of government lawsuits filed in January.
