Consumer complaint received 2024-05-08
Product: Student loan — Private student loan
Issue: Getting a loan — Confusing or misleading advertising
Company: Navient Solutions, LLC. (FL)

I attended an XXXX XXXX XXXX XXXX XXXX school beginning in XXXX, deceived by false advertising and inflated success metrics. In order to cover the absurd cost of attendance, I was pressured by school counselors to take out private loans, in addition to federal ones. 

The outright fraud and misconduct perpetrated by the XXXX XXXX and its owners, XXXX XXXX XXXX ( XXXX ) and then XXXX XXXX XXXX XXXX ( XXXX ), are well documented and reported ( see the attachments in this filing ). However, the coordination of Navient Corporation ( previously known as Sallie Mae ) and for-XXXX XXXX XXXX, like the XXXX XXXX , to entrap students in insurmountable private student loan debt has only recently received serious attention. ( The CFPB itself was aware of Navients misconduct at least as far back as XXXXXXXX of XXXX, when it sued Navient for failing borrowers at every stage of repayment ; see attached article. ) In  XXXX of XXXX, Navient settled with XXXX state attorneys general to provide relief totaling {$1.00} XXXX, to resolve allegations of rampant deceptive student loan servicing practices, as well as abuses in originating predatory loans. The summary of the settlement states, Navient also allegedly originated predatory subprime private loans to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of such borrowers would be unable to repay the loans. Navient allegedly made these risky subprime loans as an inducement to get schools to use Navient as a preferred lender for highly-profitable federal and prime private loans, without regard for borrowers and their families, many of whom were unknowingly ensnared in debts they could never repay. 

On XX/XX/XXXX, Senator XXXX XXXX, along with XXXX other senators, wrote to Navient, urging it to cancel its fraudulent private student loans, under the FTCs Holder Rule. The letter lists the various abusive and deceptive activities committed by Navient and its partner schools, and it would do the letter injustice to offer a summary -- the letter is included with this filing. 

On XX/XX/XXXX, after the Biden Administration approved {$6.00} XXXX in student debt cancellation for XXXX borrowers who attended the XXXX XXXX, the XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX issued a statement, saying, XXXX also partnered with Sallie Mae ( now known as Navient ), to convince XXXX borrowers to take out private student loans to augment their federal student loans. These private loans enabled XXXX to maintain access to federal student aid dollars, and Navient benefited by being a preferred lender of federally-guaranteed student loans for XXXX students. Both XXXX and Navient knew students would not be able to repay these subprime loans and had a side agreement that protected Navient against losses. These private loans are not resolved by todays federal action and will need to be addressed separately with Navient to ensure XXXX  students get full relief. 

XXXX XXXX, the President and Executive Director of XXXX, reiterated, We also urge Navient to recognize that the private student loans it made to XXXX students are also not enforceable and should be cancelled immediately. 

During its XXXX XXXX earnings call, Navient stated that it reserved {$35.00} XXXX due to internal policy changes [ ] made to meet new regulatory expectations related to school misconduct discharges on certain legacy private loans. In addition, Navient plans to transfer these loans to XXXX ( this is also addressed in Senator XXXX  letter ). These are most likely responses not only to the Biden Administrations actions to provide relief to defrauded borrowers, but also to the recent victory of borrowers in the XXXX XXXX XXXX XXXX  ( aided by XXXX  ), in which students who attended certain predatory schools ultimately won federal student loan debt relief, including refunds. Navients portfolio contains many private loans taken out by borrowers who attended these schools ; its only reasonable that Navient should anticipate and prepare for adverse action, especially given XXXX involvement and the mounting scrutiny from Senator XXXX and her colleagues, as well as various state attorneys general.