Sallie Mae has long drawn the ire of student loan borrowers struggling to pay back their debt.
But as it turns out, they might have had a real reason to complain.
On Wednesday, the federal government sued Navient, formerly part of Sallie Mae, for allegedly cheating borrowers out of their repayment rights. And two additional lawsuits, filed by Attorneys General in Illinois and Washington, named both Navient and Sallie Mae.
The two companies handle student loan payments from millions of borrowers.
"At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs," said Richard Cordray, the director of the Consumer Financial Protection Bureau, which brought the federal suit.
Navient, which spun off from Sallie Mae in 2014, is currently the biggest student loan servicer in the country, handling more than 12 million accounts. About half of those borrowers have federal loans and the other half are private.
About one in four student loan borrowers have Navient as their loan servicer, according to the CFPB. That means Navient is where they're sending their monthly checks to pay off their loans.
The CFPB's allegations go back as far as 2010. It claims that Navient steered struggling borrowers toward paying more than they had to, and misallocated borrowers' payments when made across multiple loans, for example. It also alleges that in some cases, Navient erroneously reported borrowers had defaulted on their loans, damaging their credit score.
