BCFP Accuses Dept. of Education of Refusing to Share Documents Related to Navient Lawsuit

The Bureau of Consumer Financial Protection is accusing the Department of Education of blocking access to documents requested by the BCFP in its lawsuit against Navient, the nation’s largest student loan servicer.

Navient says it needs permission from the Education Department before it can release the documents and that permission has not yet been given, despite a request from the BCFP. The BCFP filed a lawsuit against Navient in January of 2017, accusing the servicer of misleading borrowers, steering them into paying more than they have to, and failing to correctly apply payments to their accounts.

A court filing this week revealed a request from the BCFP to have Navient produce documents to help identify which of the servicer’s borrowers have been affected. Navient, citing an interpretation of privacy laws from the Department of Education, says it needs the department’s approval before releasing the documents.

“These records are necessary for the Bureau’s litigation against Navient Solutions so that the Bureau can identify the consumers potentially harmed by the practices described in the Bureau’s complaint, and can quantify the amount of harm suffered by the consumers,” wrote Kristen Donoghue, the BCFP’s assistant director for enforcement, in a letter to Education Secretary Besty DeVos.

The refusal of Navient and the Education Department to cooperate could also affect other lawsuits filed against the servicer by state attorneys general in California, Pennsylvania, and Illinois, according to a published report.

The BCFP and the Department of Education had previously worked together to share information related to companies which have contracts with the federal government related to student loans, but the Education Department ended that agreement last year.