Sallie Mae Sued For Overcharging on Student Loans-
College grads, rejoice. Your prayers for student loan forgiveness may have been answered. Call (844) 236-3332 for more information.
Sallie Mae and the federal government struck a deal to resolve accusations that the nation’s largest student loan lender cheated student loan borrowers who were being charged pricey late fees. According to Sallie Mae Bank, it will pay “$3.3 million in fines and oversee the refund of up to $30 million in late fees.”
In addition, the Consumer Financial Protection Bureau investigated whether the company violated federal consumer protection laws that prohibit discriminatory lending, while wrongfully processing borrowers’ monthly payments. Sallie Mae was ordered to pay $96.6 million in restitution and penalties. Because of the never-ending charges and hefty fees, it’s become increasingly difficult for college grads to pay off student loan debts, causing a lifetime of financial obligations to the lender.
Navient, formerly part of Sallie Mae, created repayment obstacles for tens of thousands of student borrowers by providing incorrect payment information, processing payments incorrectly and failing to act when borrowers complained, according to the federal lawsuit filed.
The company also cheated borrowers out of their rights to lower repayments, according to the CFPB lawsuit, which seeks financial relief for student borrowers who were harmed. Call 844-236-3332 for more information.
“For years, Navient failed consumers who counted on the company to pay back their student loans,” said CFPB Director Richard Cordray. “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”
The Justice Department has ordered Sallie Mae to pay $60 million in restitution and a $55,000 penalty in a settlement that needs court approval. In a separate case, the Federal Deposit Insurance Corp. has ordered the company to refund troops up to $30 million in late fees assessed on loans and imposed a $6.6 million civil fine.
Eligible service members will be contacted by an independent administrator who will distribute compensation.
All but $3.3 million of the fines will be paid by Navient, the student-loan servicing company that was spun out of Sallie Mae last month. Under the terms of the separation, which was initiated last May, Navient absorbed Sallie Mae’s liabilities and 95 percent of its assets, including servicing rights to nearly $300 billion in student loans.
Neither Navient nor Sallie Mae admitted or denied wrongdoing. But the chief executives of both companies apologized for the harm done to service members.
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“Once that review is complete, we will use the information to determine what appropriate actions — if any — should be taken against Sallie Mae’s contract with the federal government,” Education Secretary Arne Duncan said at Tuesday’s news conference.
Duncan did not rule out terminating the department’s contract with Navient, an agreement that is set to expire in June.
He said that the Federal Student Aid office will also comb through the records of the 10 other loan servicers, including Great Lakes and Nelnet, to make sure they are not charging more than the 6 percent interest permitted by the law. About $717 billion in federal student loans are managed by servicers, with American Education Service overseeing the largest portion of the portfolio.