Dynamic Accident Lawyers: Student Loan Class Action Lawsuit Settled With Navient

Navient class action lawsuit Last week, the parties in a class action lawsuit accusing student loan company Navient Corp. of misappropriating advance payments on student loan accounts reached a settlement agreement, according to court documents.

Lead plaintiff Diana Wise alleged in her class action lawsuit that the student loan company Navient engaged in an “unfair, deceptive and illegal” practice by taking extra money that borrowers made toward their debt and applied it to future payments instead of applying it to the principal balance.

Wise further alleged that by applying these additional payments to future payments, Navient was able to keep interest payments higher.

“Logically, the student loan borrower would pay less interest thereafter on a $9,900 principal balance, rather than a $10,000 principal balance,” Wise said in her class action lawsuit describing a situation in which a borrower paid an extra $100 on a $10,000 loan.

“If, however,” the Navient class action lawsuit continued, “defendants refused to apply the $100 extra loan payment to principal only, but rather applied it ahead to future payments or to other loans, the student loan borrower who should only accrue interest on $9,900 would still actually pay interest on the higher $10,000 principal amount.”

The loan company is an offshoot of the massive student loan company Sallie Mae, according to court documents. Navient had engaged in a protracted legal battle in response to the student loan class action lawsuit alleging that the plaintiff’s counsel was not qualified to act as the representative for the class because he and the plaintiff are married.

Navient’s argument was dismissed in U.S. District Court because the judge determined that since the Class had not even been certified, arguing about the attorney representing the Class was premature. Similarly, the Seventh Circuit dismissed Navient’s argument on appeal finding there was no legitimate question of law in the defendant’s motion.

Under the terms of the proposed settlement, the Navient class action lawsuit will be dismissed with prejudice from Illinois federal court. The representative for the plaintiff stated that the settlement agreement was reached just this December, but the terms will not be shared with the public. The plaintiff filed a stipulation of dismissal with Illinois federal court on Monday, Jan. 4 of this year. According to the filing, each party of to bear its own costs.

More information about the proposed Navient class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

Wise is represented by Brandon M. Wise of The Wise Firm LLC.

The Navient Pre-Payment Penalty Class Action Lawsuit was Diana Wise v. SLM Corp., et al., Case No. 3:14-cv-01426, in the U.S. District Court for the Southern District of Illinois.

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