FOR IMMEDIATE RELEASE
Contact: info@selendygay.com
NEW YORK – Selendy & Gay PLLC filed a class action suit today in the Southern District of New York against student loan servicer Navient alleging that the company misled borrowers in public service professions from accessing loan forgiveness in order to boost its own profits.
This landmark suit, brought by nine public servants on behalf of themselves and those similarly situated, asserts that Navient, a loan servicer retained by the Department of Education to assist borrowers in finding the best repayment options, has been misleading borrowers for over a decade. By directing public servants away from available loan forgiveness programs, Navient has been able to keep its servicing accounts and continue to profit. Instead of helping public servants, Navient pushes them into quick and easy loan plans such as forbearance – under which a borrower’s payments are temporarily suspended – but which can have devastating consequences because typically interest still accrues and it does not qualify for loan forgiveness. Navient has also informed borrowers that their loan payments qualify for loan forgiveness when they do not, or even worse, Navient has informed borrowers who could qualify that there is no available forgiveness plan for them.
“On behalf of all public servants – as many as 32 million borrowers who may qualify for loan forgiveness – we are asking the court to issue an injunction ordering Navient to stop affirmatively restricting borrowers’ ability to enroll in Public Service Loan Forgiveness,” said Lena Konanova.
The Federal Government created the Public Service Loan Forgiveness in 2007, with bi-partisan support, to encourage students to enter public service and to help them address the huge financial burdens they face in paying for their education. But the program has been mishandled and undermined by the Department of Education’s contracted servicers; only 96 people have qualified for forgiveness so far, out of 28,000 who have applied.
“Since 1983, the cost of higher education has risen more than 700% and over 40 million people have taken out student loans totaling over $1.5 trillion,” said Faith Gay. “But Navient has obstructed loan forgiveness at alarming rates, with horrifying effects on borrowers, their families and communities.”
“Navient has been profiting at the expense of teachers, nurses, first responders and other public servants by incentivizing its employees to keep calls with borrowers to under seven minutes – a woefully inadequate time to assess a borrower’s financial situation, analyze and present best options, and give advice,” said Maria Ginzburg.
According to AFT President Randi Weingarten, “We are proud to stand by our members, who are represented by the powerful women-led team at Selendy & Gay, a firm that shares AFT’s commitment to the public good.”
The Selendy & Gay team includes Faith Gay, Maria Ginzburg, Lena Konanova, and Maggie England.
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