ILLINOIS — Attorney General Lisa Madigan is suing the largest student loan corporation for misleading customers. Madigan’s office says Navient and Sallie Mae handed out high-interest loans to students who couldn’t afford to pay them back.
Tens of thousands were impacted. The lawsuit says most of the targets were students at some of the worst ranked schools in the country.
The state’s consumer watchdog agency is taking action against some of the largest student loan companies for handing out unfair, high interest loans to students.
“Navient and Sallie Mae treated student loan borrowers unfairly from start to finish.”
Madigan says many students were targeted because the companies knew they wouldn’t be able to pay back the loan.
“One of the most egregious offenses we found is that Navient saddled students with expensive and risky subprime loans that designed it to fail.”
Former student Angie Stille knows firsthand how difficult it is to live with the burden of student loan debt.
“It’s going to take forever. I”m kind of like, I’m going to die with these, as opposed to I’m going to pay them off in the near future.”
While Stille did not get her loans through the companies being sued by Madigan, she says she was also a victim of misleading practices.
“Oh yeah, this is totally normal. It’s no big deal. Just sign on the dotted line and we’ll give you money.”
Navient is also being accused of repeatedly failing to tell borrowers about a repayment plan offered to all customers.
“I just feel like they’re not sitting them down and saying, ‘You are signing away a lot of money. This is going to take you decades.’ My student loan payments are more than my rent.”
Madigan says students are not the only ones being penalized.
“A growing number of loans require cosigners, so you’ve seen parents and grandparents are now on the hook sometimes, for some very difficult loans.”
Stille says this is a small step in the right direction and hopes more students don’t get misled. However,she says more needs to be done.
“I’m first generation that’s not going to be financially better off than my parents and I think a lot of that has to do with our crippling student loan debt.”
Madigan estimates tens of thousands of Illinoisans were affected. She says it’s still unknown how much money was involved.
Madigan also filed suit against Pioneer Credit Recovery and General Revenue Corporation.