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U.S. NEWS Saturday 30 June 2018
California sues nation's largest student loan servicer

By DON THOMPSON attempt to blame a single
SACRAMENTO, Calif. (AP) servicer for the failures of
— California's attorney the higher education sys-
general announced Thurs- tem and the federal stu-
day he is suing the nation's dent loan program to de-
largest student loan pro- liver desired outcomes."
cessor, alleging it is harm- "The need to blame some-
ing consumers by failing to one has driven these law-
properly service the debts. suits," Remondi said in a
Attorney General Xavier statement citing the com-
Becerra said the state pany's low default rates
will sue Navient Corp. this and high enrollment in al-
week, contending the Del- ternative repayment pro-
aware-based company grams. About 4.6 million
financially harmed thou- Americans were in default
sands of Californians. on their student loans as
He said the firm systemati- of December, according
cally and illegally failed to to the Department of Edu-
properly service federal stu- cation. That's more than
dent loans by steering bor- double what it was four
rowers to more expensive years ago, and more than
repayment plans, failing to 10 percent of the 42.8 mil-
tell them how to switch to lion Americans who cur-
income-driven repayment rently have a student loan
plans or how those with backed by the depart-
disabilities could end their ment. Of the roughly 12
debts and misrepresenting million borrowers serviced In this Jan. 24, 2018, file photo California Attorney General Xavier Becerra talks during a news
conference in Sacramento, Calif. Becerra announced Thursday, June 28, 2018 that the state is
how it handled payments. by Navient, Becerra said suing Navient Corp., the largest student loan processor, alleging it is harming consumers by failing
"No one should have their about 1.5 million live in Cali- to properly service the debts.
American dream shattered fornia. Becerra said Navient Associated Press
because some loan servic- also assigned thousands of
ing company is cheating delinquent loans to its sub- ra said. Publicly traded Na- sued the firm in October Corinthian Colleges.
these future leaders of a sidiaries, Pioneer and Gen- vient was formerly part of over its riskier subprime stu- On Wednesday, a federal
chance to move ahead," eral Revenue Corp., and Sallie Mae, which began as dent loans. magistrate in San Francis-
Becerra said, a Democrat alleged those subsidiaries a government entity that Last month, the Trump ad- co dismissed a separate
running in the November misled borrowers about serviced federal education ministration announced it Becerra lawsuit alleging
election. their options. loans. Navient became a was closing the consumer the Trump administration il-
Navient president and The state may seek debt re- separate company in 2014. bureau's student lending legally backed away from
CEO Jack Remondi called lief, repayment of overpay- The U.S. Consumer Finan- office, potentially limiting its an Obama-era promise to
the allegations unfounded ments, forgiveness of loans cial Protection Bureau and investigation of abuses by quickly forgive the loans
and the lawsuit "another and other remedies, Becer- attorneys general in Illinois companies in the $1.5 tril- of Corinthian students. The
and Washington sued Na- lion student loan market. magistrate gave the state
Key figure charged in vient early last year alleg- The federal office also in- 30 days to show it has the
right to sue the U.S. Depart-
ing similar violations. Penn-
vestigated and sued for-
sylvania's attorney general profit education company ment of Education.q
fatal warehouse fire

nears plea deal

By PAUL ELIAS meeting to finalize the deal
Associated Press with a judge. The parties
SAN FRANCISCO (AP) — were still negotiating Friday
A plea deal is close at afternoon.
hand for the central figure "We are 85 percent there,"
charged in connection Serra said.
with a Northern California Almena, 48, rented the
warehouse fire that killed Oakland warehouse
three dozen partygoers at dubbed the “Ghost Ship”
an unlicensed concert in and illegally converted it
2016, his attorney said Fri- into a residence and en-
day. tertainment venue. Pros-
Derick Almena and pros- ecutors charged Almena
ecutors have tentatively with turning the cluttered
agreed to an eight-year building into a “death
prison sentence to resolve trap” with few exits, rickety
36 charges of involuntary stairs and dark and dan-
manslaughter, defense gerous passageways. Al-
lawyer Tony Serra said. He ameda County prosecutor
warned that talks could Teresa Drenick declined to
still break down during a comment.q