The Law Office of Kim Covington

Call For A Free 1-Hour Consultation
541-393-2790 | 800-673-1891

Please Ask For Kim Directly When Scheduling An Appointment

Student loan abuse alleged to be central factor in lawsuits

Debt, whether it comes from credit cards, auto loans, medical bills or other sources, continues to be a top cause of financial strain for people in Eugene and elsewhere. Student loan debt also falls into this category. In fact, student loans can be more difficult for consumers to deal with, since, unlike credit card debt, federal student loans cannot be discharged through bankruptcy in most cases.

Recently, the Illinois Attorney General sued banking giant Sallie Mae Bank and one of the nation’s largest student loan institutions, Navient Corporation, among several other firms. The lawsuit accused these lenders of repeated abuses against those borrowing for their educations, resulting in billions of dollars in consumer debt. The United States Consumer Financial Protection Bureau also filed a lawsuit against Navient, stating that the institution did not adequately handle complaints and made it difficult for borrowers to repay their loans.

Sallie Mae and Navient are alleged to have approved student loans that were “designed to fail,” and included exorbitant fees and interest rates. Additionally, the institutions were accused of failing to tell troubled borrowers about repayment options based on income and of increasing their overall loan burden when they sought help.

The result of these lawsuits remains to be seen. The fact remains, however, that those who are fresh out of college may have difficulty making enough money to cover their loans and other expenses. Borrowers and those who are considering applying for student loans may hope that procedures will be changed to prevent student loan abuse and assist consumers in being able to repay their debt.

Source: NBC Chicago, "Madigan Sues Sallie Mae, Navient for Alleged 'Student Loan Abuses,'" Jan. 18, 2017

No Comments

Leave a comment
Comment Information
email us for a response

Learn More About Your Fresh Financial Start

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

The Law Office of Kim Covington

The Law Office of Kim Covington
1445 Willamette Street, Suite 9
Eugene, OR 97401

Toll Free: 800-673-1891
Phone: 541-393-2790
Fax: 541-344-6466
Eugene Law Office Map

P: 541-393-2790

T: 800-673-1891

F: 541-344-6466