Class Action Alleges Navient Has No License to Collect Student Loan Debts in Maryland

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A proposed class action lawsuit originally filed in Prince George’s County Circuit Court in Maryland against Navient and SLM Private Credit Student Loan Trust 2005-A has been removed to federal court. The lawsuit, filed in December 2017, outlines allegations that the defendants violated Maryland debt collection and consumer protection laws with their activities related to the collection of student loans. 

The plaintiff claims that within the last three years, Navient has unlawfully failed to obtain and/or maintain a collection agency license from the Maryland Commission of Financial Regulation, a requirement set by the Maryland Collection Agency Licensing Act. According to the lawsuit, the plaintiff, while enrolled full-time as a graduate student in October 2014, began receiving collection letters and calls from Navient regarding her student loan account even though her payments should have been deferred due to her full-time-student status.

“From October of 2014 through March of 2016, while still matriculating as a full-time student [the plaintiff] either received a monthly collection letter from Navient or a monthly collection phone [call] from the same,” the case says.

Co-defendant SLM Private Credit Student Loan Trust 2005-A reportedly sued the plaintiff in January 2017, claiming they were the true owner of the plaintiff’s student loan account and that said account was in default. During the discovery phase of that lawsuit, the plaintiff says it was revealed that Navient “was in fact a 3^rd-party debt collector for SLM 2005 Trust.” Moreover, the complaint says it was also found out during discovery that:

• Navient did not have a debt collection license in Maryland;
• Navient had no ownership interest in SLM Private Credit Student Loan Trust 2005-A;
• Navient had no ownership interest in the plaintiff’s student loan;
• SLM “has no employees, thus all actions taken on behalf of the trust was conducted unilaterally” by Navient; and
• Navient, on behalf of SLM, retained the services of debt collection attorneys in order to sue the plaintiff.

“A review of records reveals that Navient as an unlicensed debt collector has caused the filing of over 1,000 lawsuits in the state of Maryland in an effort to collect on consumer loans on behalf of unregistered corporate trusts,” the complaint states, adding that the plaintiff has paid more than $3,000 to the allegedly unlicensed debt collector.