According to a lawsuit filed early this week, federal regulators say a local company that is the nation’s largest servicer of student loans, cheated millions of borrowers.
The Consumer Financial Protection Bureau filed a class-action lawsuit against the Wilmington, Dealware-based servicer, Navient.
The agency claims that Navient gave borrowers inaccurate information, incorrectly processed payments, ignored complaints from borrowers and steered them towards high-cost repayment plans. Navient provides loans to more than 12 million borrowers.
Washington state and Illinois have filed their own lawsuits against Navient.
Illinois attorney general Lisa Madigan accused the company of unfair and deceptive practices.
"They find themselves at a poorly or unaccredited for profit school being given a sub prime loan that both the school and the lender know that person is never going to get a degree to get a job to pay back that loan," said Madigan.
In a statement, Navient called the allegations "unfounded" and said, "The timing of this lawsuit - midnight action filed on the eve of a new administration - reflects their political motivations. Navient has a well-established, superior track-record of helping student loan borrowers succeed in repayment."