Lawsuit against student loan giant Navient will test limits of private debt discharge – Yahoo Finance
A former student at the now-defunct ITT Technical Institute and his mother are suing student loan giant Navient (NAVI) over the company’s refusal to cancel his private student loans despite the U.S. government erasing thousands of federal student loans related to the notorious for-profit school.
The case could set a precedent for defrauded borrowers seeking relief from privately-held loans (as opposed to federally-backed loans).
“In filing this case, and expanding the discussion about private student loan cancellation, it sends a clear message to Navient and other private lenders that they can’t continue to deny students’ rights while profiting off of their debt,” Victoria Roytenberg, senior attorney at the Project on Predatory Student Lending and a lawyer for the plaintiffs, told Yahoo Finance. “All students should have the right to the cancellation and shouldn’t be stuck with that bogus debt.”
Navient declined a request for comment.
Jorge Villalba, who attended an ITT school in California for a bachelor’s degree in digital entertainment and game design in 2006, borrowed over $50,000 in federal student loans and $43,000 in private loans (that were co-signed by his mother). ITT shut down all campuses in 2016, affecting roughly an estimated 35,000 students, amid lawsuits and investigations over alleged predatory lending practices.