Illinois’ lawsuit against Navient can proceed — why student loan borrowers should pay attention

A lawsuit against a student loan giant can proceed, a judge ruled last week, in a decision that could make student-loan companies more vulnerable to lawsuits alleging they mislead borrowers.

The judge denied Navient’s motion to dismiss a lawsuit filed by the state of Illinois last year, alleging the company and its corporate predecessor, Sallie Mae, violated state consumer protection laws by misleading borrowers about the repayment options available to them and making it more difficult and expensive than necessary to repay their loans, among other claims. (Though the case against Navient NAVI, +0.94% can proceed, the judge granted a motion to dismiss the suit against Sallie Mae).

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