Government sues largest US student loan company for 'failing' borrowers

The Consumer Financial Protection Bureau believes the country's largest student loan company "systematically and illegally" failed borrowers at "every stage of repayment."

Student loan debt is the second-highest level of consumer debt in the country at $1.2 trillion. Navient, formerly a part of Sallie Mae, services about $300 billion worth of that money — or about 12 million borrowers.

The Consumer Financial Protection Bureau, or CFPB, is suing the Navient Corporation. The CFPB's suit features several serious allegations, such as processing payments incorrectly, deceiving consumers to save on operating costs and ignoring complaints from borrowers.

Navient has been in trouble with the federal government before. Back in 2014, Navient and Sallie Mae paid a combined $97 million to settle charges that they violated the Servicemembers Civil Relief Act, which caps loan interest rates at 6 percent for active duty military members.

As for the company in question, it calls the lawsuit an "unsubstantiated, unjustified and politically driven action," pointing to the suit being filed just hours before Donald Trump's administration takes over the White House.

Many outlets and analysts speculate the CFPB, created by the Obama administration, will suffer under President Trump, and there have been rumors the CFPB's current director, Richard Cordray, is going to be replaced.

The CFPB is asking Navient to provide financial relief for its borrowers.

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2016 issues: Education politics, student loans, common core
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2016 issues: Education politics, student loans, common core
UNITED STATES - JUNE 10: From left, Sen. Elizabeth Warren, D-Mass., Sen. Chuck Schumer, D-N.Y., and Sen. Brian Schatz, D-Hawaii, participate in the press conference in the Capitol to call for the elimination of student loan debt at public higher education institutions on Wednesday, June 10, 2015. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - JUNE 10: From left, Sen. Chuck Schumer, D-N.Y., and Sen. Brian Schatz, D-Hawaii, participate in the press conference in the Capitol to call for the elimination of student loan debt at public higher education institutions on Wednesday, June 10, 2015. (Photo By Bill Clark/CQ Roll Call)
EXETER, NH - AUGUST 10: Democratic presidential candidate Hillary Clinton speaks at a town hall meeting at Exeter High School August 10, 2015 in Exeter, New Hampshire. Clinton discussed college affordability and student debt relief. (Photo by Darren McCollester/Getty Images)
UNITED STATES - MAY 19: Sen. Bernie Sanders, I-Vt., attends a news conference with members of the National Nurses Association at the Senate swamp on legislation 'to eliminate undergraduate tuition at public colleges and universities and to expand work-study programs,' May 19, 2015. (Photo By Tom Williams/CQ Roll Call)
US President Barack Obama applauds a speaker after his introduction before signing a memorandum on reducing the burden of student loans on June 9, 2014 in the East Room of the White House in Washington, DC. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
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