CAMDEN, N.J. (Legal Newsline) – Two New Jersey consumers allege their student loans were fraudulently serviced.
Maulik Sanghavi and Michelle Robalino-Sanghavi filed a complaint on Jan. 8 in the U.S. District Court for the District of New Jersey against Navient Corp.; Navient Solutions Inc., formerly known as Sallie Mae Inc.; and SLM Corp. for alleged violation of the New Jersey Consumer Fraud Act.
According to the complaint, the plaintiffs allege that they "have diligently made their monthly loan payments and have tried to get out of debt sooner by making deliberate extra payments to principal. Defendants, however have developed a repayment system intended ... to inflate interest and thwart early repayment of principal in order to increase their own interest income," the suit states.
"To ensure student loan borrowers stay in debt as long as possible, defendants routinely engage in unfair, deceptive and illegal practices by implementing a scheme designed to misallocate extra student loan payments towards interest – a method which is most beneficial to themselves and most detrimental to the borrower," the suit states.
The plaintiffs holds Navient Corp., Navient Solutions Inc., and SLM Corp. responsible because the defendants allegedly applied payments meant for the principal to both principal and interest or interest only and refusing to apply payments as directed by the plaintiffs.
The plaintiffs request a trial by jury and seek an award of compensatory and treble damages, attorneys' fees, filing fees, costs of suit, exemplary and punitive damages, and such other and further relief as the court may deem just and proper. They are represented by Maulik M. Sanghavi of Maulik M. Sanghavi in Cranford, New Jersey.
U.S. District Court for the District of New Jersey case number 2:18-cv-00233-KM-CLW