IN THE UNITED STATES DISTRICT COURT FOR THE …

Case 1:18-cv-09031-DLC Document 32 Filed 01/16/19 Page 1 of 132

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

KATHRYN HYLAND, MELISSA GARCIA, ELDON R. GAEDE, ELIZABETH TAYLOR, JESSICA SAINT-PAUL, REBECCA SPITLERLAWSON, MICHELLE MEANS, ELIZABETH KAPLAN, JENNIFER GUTH, MEGAN NOCERINO, and ANTHONY CHURCH, individually and on behalf of all others similarly situated,

No. 18-cv-9031-DLC JURY DEMANDED

Plaintiffs,

v.

NAVIENT CORPORATION and NAVIENT SOLUTIONS, LLC,

Defendants.

AMENDED CLASS ACTION COMPLAINT

Date: January 16, 2019

Mark Richard PHILLIPS, RICHARD & RIND, P.A. 9360 SW 72 Street, Suite 283 Miami, FL 33173 Telephone: 305-412-8322 E-mail: mrichard@ (pro hac vice)

Faith Gay Maria Ginzburg Yelena Konanova Margaret England SELENDY & GAY PLLC 1290 Avenue of the Americas New York, NY 10104 Telephone: 212-390-9000 E-mail: fgay@

mginzburg@ lkonanova@ mengland@

Attorneys for Plaintiffs

Case 1:18-cv-09031-DLC Document 32 Filed 01/16/19 Page 2 of 132

TABLE OF CONTENTS

Pages

NATURE OF ACTION .................................................................................................. 1

THE PARTIES ............................................................................................................. 21

Plaintiffs ............................................................................................................ 21

Defendants ........................................................................................................ 45

JURISDICTION........................................................................................................... 49

VENUE......................................................................................................................... 51

FACTUAL ALLEGATIONS ........................................................................................ 51

Background On Federal Student Loans........................................................... 51

The Life Of A Federal Student Loan................................................................ 55

The Public Service Loan Forgiveness Program ............................................... 64

The Loan Servicer: Navient.............................................................................. 72

CLASS ACTION ALLEGATIONS ............................................................................ 102

CAUSES OF ACTION ............................................................................................... 105

Count I ? Breach Of Contract For Violations Of The Servicing Contracts............................................................................................... 105

Count II ? Breach Of Implied Warranty Of Authority.................................. 107

Count III ? Tortious Interference With Contract .......................................... 109

Count IV ? Tortious Interference With Expectancy ...................................... 112

Count V ? Unjust Enrichment........................................................................ 114

Count VI ? Breach Of Fiduciary Duty ........................................................... 115

Count VII ? Negligence................................................................................... 117

Count VIII ? Negligent Misrepresentation.................................................... 118

Count IX ? Negligent Misrepresentation....................................................... 119

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Case 1:18-cv-09031-DLC Document 32 Filed 01/16/19 Page 3 of 132 Count X ? Negligent Misrepresentation ........................................................ 120 Count XI ? Negligent Misrepresentation....................................................... 121 Count XII ? Violations Of The Maryland Consumer Protection Act,

Md. Code Ann., Com. Law ? 13-301 et seq. ......................................... 122 Count XIII ? Violations Of The Florida Deceptive And Unfair Trade

Practices Act, Fla. Stat. ? 501.201 et seq. ........................................... 123 Count XIV ? Violations Of The New York Consumer Protection From

Deceptive Acts And Practices Law, New York General Business Law ? 349 et seq. .................................................................................. 124 Count XV ? Violations Of The California Consumers Legal Remedies Act, Cal. Civ. Code ? 1750 et seq. ........................................................ 125 PRAYER FOR RELIEF ............................................................................................. 127 JURY DEMAND ........................................................................................................ 129

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Case 1:18-cv-09031-DLC Document 32 Filed 01/16/19 Page 4 of 132

Plaintiffs Kathryn Hyland, Melissa Garcia, Eldon R. Gaede, Elizabeth Taylor, Jessica Saint-Paul, Rebecca Spitler-Lawson, Michelle Means, Elizabeth Kaplan, Jennifer Guth, Megan Nocerino, and Anthony Church, individually and on behalf of all others similarly situated, through their attorneys, Selendy & Gay PLLC and Phillips, Richard & Rind, P.A., allege the following against Defendants Navient Corporation and Navient Solutions, LLC (collectively, "Navient").

Plaintiffs allege the following on personal knowledge as to themselves and their own acts, and on information and belief as to all other matters. Plaintiffs' information and belief is based on, among other things, the independent investigation of the undersigned counsel.1

NATURE OF ACTION Since 1983, the cost of higher education has risen more than 700%--five times greater than inflation, and even faster than healthcare costs.2 In the face of the massive cost of education, over 40 million people in the United States--more than 10% of the nation's population--have taken out student loans, totaling over $1.4

1 This investigation included, but is not limited to, a review and analysis of: (i) interviews with affected individuals; (ii) public reports, news articles, and academic literature; and (iii) other publicly available material and data identified herein. The investigation into the factual allegations contained herein is continuing, and many of the facts supporting the allegations are known only to Navient or are exclusively within its custody or control. Plaintiffs believe a reasonable opportunity for discovery will afford further substantial evidentiary support for the allegations contained herein. 2 See Jack Remondi, Five Recommendations For Better Student Loans 2, NAVIENT (July 2018), .

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trillion.3 Loan volume has increased "substantially" since 1999.4 90% of the outstanding student loan volume is comprised of loans backed or funded by the Federal Government.5

The skyrocketing cost of education hits our public servants, including teachers, nurses, and police officers--the backbone of our nation--especially hard. Those workers, who have dedicated themselves to helping others, are forced to take out substantial student loans to meet requirements of their job and to maintain and enhance their professional certifications. Yet public service professionals are not highly compensated and struggle to pay back their student debt while meeting their day-to-day financial needs.

"In recent months, educators and other school personnel have walked out to demand a living wage in exchange for the jobs they love. Teachers are working in fast food restaurants or selling plasma to pay their bills."6 "[I]n no state does a teacher's assistant making the average salary earn enough to provide for the basics

3 See id. at 1; U.S. Dep't of the Treasury, A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation 122 (July 2018), ; Jessica Silver-Greenberg & Stacey Cowley, In Navient Lawsuits, Unsettling Echoes of Past Lending Crisis, N.Y. TIMES (Jan. 19, 2017), ; AFT Higher Education, On the Backs of Students and Families: Disinvestment in Higher Education and the Student Loan Debt Crisis 1, 14, .

4 Dep't of Educ., Student Loans Overview Fiscal Year 2019 Budget Proposal 29, .

5 U.S. Dep't of the Treasury, supra note 3, at 11.

6 Randi Weingarten, Public Service Debt Relief Is Broken, N.Y. TIMES (Sept. 27, 2018), .

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