Navient (NAVI) crashed on Thursday after the Pennsylvania attorney general sued the company, alleging "widespread abuses" in its student loan origination and servicing segments and deceptive lending practices.
The lawsuit comes after the Consumer Financial Protection Bureau also sued Navient in January, saying the company "cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans."
Washington and Illinois have also sued the company.
Pennsylvania Attorney General Josh Shapiro filed the lawsuit today in the U.S. District Court for the Middle District of Pennsylvania. Residents of the state had filed more than 1,000 complaints against the company with the CFPB, according to a statement released by Shapiro's office.
The lawsuit, he said, also had affected Pennsylvanians who got a private student loan from Sallie Mae (SLM), of which Navient was once a part.
"Navient's deceptive practices and predatory conduct harmed student borrowers and put their own profits ahead of the interests of millions of families across our country who are struggling to
repay student loans," Shapiro said.
Sallie Mae (SLM) shares fell 3.6%.
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