Chantel Grant of GM Law Firm on Predatory Student Loans

Nearly a year has passed since the Consumer Financial Protection Bureau (CFPB) announced that it was taking legal action against Navient (formerly known as Sallie Mae). The CFPB alleged that Navient, the largest student loan company in the nation, “systematically and illegally” failed borrowers by utilizing unfair, deceptive, and abusive tactics that promoted forbearance over income-based repayment plans.

Steering consumers struggling to repay student loans into forbearance, which places a temporary stop on payments, allowed the lender to continue to accumulate interest on the loan’s principal balance. According to the CFPB, Navient generated up to $4 billion in interest by pushing borrowers toward forbearance and away from other, more sensible options. When the news first broke, longtime observers like Chantel Grant of GM Law Firm were hardly taken aback.

Grant is owner of GM Law Firm, a Boca Raton-based consumer defense firm, which focuses on private student loan defense. Grant has dedicated her professional career to fighting against the unfair, deceptive, and abusive lending practices described in the lawsuit filed by the CFPB. With her extensive professional experience protecting the rights of consumers, Grant is all too familiar with Navient’s tactics and has seen firsthand the kind of damage these abusive tactics visit upon consumers and their families.

Grant also lamented the fact that lenders like Navient prey on borrowers when they are at their very weakest, pointing out the callousness required to profit off of someone else’s financial hardship. While the private student loan defense attorney was incensed to learn that so many consumers were misled in such a way, she was encouraged by the fact that the CFPB’s filing has since inspired several attorneys general to follow suit.

In September of 2017, the state of Pennsylvania joined the states of Washington and Illinois in filing suit against Navient. The states cited the very same practices outlined by the CFPB in alleging that Navient illegally deceived and abused borrowers. In a statement, the Pennsylvania Attorney General's Office outlined its compelling rationale for seeking restitution on behalf of borrowers: “Navient's deceptive practices and predatory conduct harmed student borrowers and put their own profits ahead of the interests of millions of families across our country who are struggling to repay student loans."

In addition to drawing the ire of state and federal attorneys -- not to mention the thousands of outraged borrowers -- Navient’s actions also angered its own shareholders, who filed suit against the company in December of 2017. In the filing, the shareholders alleged that Navient acted recklessly by failing to disclose any details concerning its lending practices, specifically those related to subprime student loans. One of the shareholders alleged that he had been deceived into buying “securities at artificially-installed prices”

According to Grant, consumers ought to be encouraged by the fact that the law is on their side when it comes to unfair, deceptive, and abusive lending practices. Upon default, for example, credit card or private student loan interest rates can spike to 29 percent, which means the total loan will have almost doubled in just three short years.

As the lawsuits continue to pile up against Navient, Grant hopes the widespread coverage will inspire consumers to take advantage of this particularly valuable financial education opportunity. In the meantime, legal advocates like Grant, GM Law Firm, and the CFPB will surely remain committed to relentlessly defending the rights of borrowers at every opportunity.