Feds sue largest student loan provider

A student enters Admissions Building at Harvard University

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A student enters Admissions Building at Harvard University

Many college students and graduates are beholden to Sallie Mae and its offshoot Navient after the companies provided student loans. Now Navient is the focus of a federal lawsuit for allegedly cheating its customers out of their repayment rights.

Attorneys general in both Illinois and Washington are also suing Navient, The Associated Press reported.

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The Consumer Financial Protection Bureau brought the suit on behalf of the government saying, "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs."

The complaints come from as far back as 2010, and say that Navient made its customers pay more than they had to and misallocated payments when there were multiple loans. There are also claims that Navient said that borrowers defaulted when they didn't, damaging credit scores, CNN Money reported.

Navient said in a statement that the allegations are false and that the timing of the lawsuit is politically motivated, rejecting an offer to settle out of court or be sued.

Navient broke off from Sallie Mae in 2014 and handles more than 12 million student loan accounts. It is one of nine that has agreements with the government to service federal student loans.

Click here to read more about the suit and the allegations facing Navient.

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