The Consumer Finance Protection Bureau, along with attorney generals from both Illinois and Washington have filed a lawsuit against Navient — the largest student loan organization in the nation — for allegedly cheating borrowers out of money on Wednesday.
Ohio State spokesman Benjamin Johnson said that the bursar and financial services are conversing about the issue, but cannot release any information until they have looked into how this will affect the university.
The CFPB released a statement claiming that Navient — formerly part of Sallie Mae, the consumer banking company and student loan provider — will be charged with “systematically and illegally failing borrowers at every stage of repayment.” This includes: steering borrowers to pay more than they have to, obscuring information about student loans, inaccurately representing information in regards to releasing a cosigner from a loan and damaging the credit reports of the disabled including injured veterans.
“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans,” said Richard Cordray, director of the CFPB and former professor at the Moritz College of Law, in the statement posted by CFPB. “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”
The CFPB set an ultimatum for Navient to settle — through repayment of harmed consumers and discontinuation of illegal practices — by Inauguration Day. Navient rejected the ultimatum, releasing a statement calling the allegations false.
No settlement has been made between the two organizations. For now, Johnson said OSU is looking into how this lawsuit will affect the students and if there is anything that the university can do to help the situation.