Navient Must Face Class Action Lawsuit Over Student Loan Borrower and Cosigners Issue
Former students who took out loans serviced by Navient have been granted permission to proceed with their class action lawsuit against the student loan servicer, alleging self-dealing and deceptive business practices.
Brian Manetta et al. v. Navient Corp. et al.
A federal judge in New Jersey has ruled that student borrowers may sue Navient Corp for fraudulently misallocating payments, thus, extending the life of student loans.
U.S. District Judge Susan Wigenton refused Navient’s request to dismiss the lawsuit on Thursday. She stated that the borrowers who filed the proposed class action last year had legitimate claims under the anti-fraud statute of New Jersey and the consumer protection laws of Florida, New Jersey, and New York.
Lisa Simonetti of Greenberg Traurig — who represents Navient — and Xavier Bailliard of Kranjac Tripodi & Partners — who represents the proposed class — did not reply immediately to requests for comment.
9 borrowers whose loans were serviced by Navient filed the lawsuit in June 2020. The class members, who are now professionals with advanced degrees, have brought fraud claims and allegations under the consumer and business laws of Delaware, Florida, New Jersey, and New York.
They allege that the business disproportionately applied payments to the interest instead of the principal. In addition, it capitalized interest incorrectly and diverted payments toward lower-interest loans.
In addition, they stated that the defendant’s website consists of inaccurate information.
According to the plaintiffs, Navient’s website and the fact that the company does not provide borrowers with amortization and this schedule limit borrowers’ ability to comprehend or resolve such issues.
Navient Cannot Shake Things Off
Navient filed a motion to dismiss the class action case in December 2020. In its most recent dismissal brief, it stated that the plaintiffs must be able to demonstrate that the conduct underlying the claims is unlawful in some way, which they have not done and could not do.
Judge Wigenton stated that the specific allegations — including the date and cash amount of the allegedly misapplied funds — were sufficient to make claims for fraud and violation of consumer protection laws.
She stated that it was early to consider if the lawsuit would proceed as a class action.
However, the judge agreed that Navient did not owe the borrowers any fiduciary duty.
Editor’s Note on Navient Student Loans Class Action Lawsuit 2021:
This article is written to inform you of Navient’s lawsuit over student loan borrowers and cosigners.
Case Name & No.: Brian Manetta et al. v. Navient Corp. et al., Case No. 2:20-cv-07712
Jurisdiction: U.S. District Court for the District of New Jersey
Products/Services: Student loans from Navient
Allegations: Navient conducted deceptive business practices, fraud, and violation of consumer protection laws
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