IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN ...

Case 1:18-cv-09031 Document 1 Filed 10/03/18 Page 1 of 117

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

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

Plaintiffs,

v.

NAVIENT CORPORATION and NAVIENT SOLUTIONS, LLC,

Defendants.

Case No. __________ JURY DEMANDED

CLASS ACTION COMPLAINT

Date: October 3, 2018

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 forthcoming)

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 Document 1 Filed 10/03/18 Page 2 of 117

TABLE OF CONTENTS

Pages

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

THE PARTIES ............................................................................................................. 19

Plaintiffs ............................................................................................................ 19

Defendants ........................................................................................................ 36

JURISDICTION........................................................................................................... 41

VENUE......................................................................................................................... 41

FACTUAL ALLEGATIONS ........................................................................................ 42

Background On Federal Student Loans........................................................... 42

The Life Of A Federal Student Loan ................................................................ 45

The Public Service Loan Forgiveness Program ............................................... 54

The Loan Servicer: Navient .............................................................................. 62

CLASS ACTION ALLEGATIONS .............................................................................. 90

CAUSES OF ACTION ................................................................................................. 94

Count I ? Breach Of Contract For Violations of the MPN Contracts ............. 94

Count II ? Tortious Interference With Contract.............................................. 96

Count III ? Tortious Interference With Expectancy........................................ 97

Count IV ? Breach Of Contract For Violations of the Servicing Contracts................................................................................................. 99

Count V ? Unjust Enrichment........................................................................ 101

Count VI ? Breach Of Fiduciary Duty ........................................................... 102

Count VII ? Negligence................................................................................... 103

Count VIII ? Negligent Misrepresentation .................................................... 104

Count IX ? Negligent Misrepresentation ....................................................... 105

ii

Case 1:18-cv-09031 Document 1 Filed 10/03/18 Page 3 of 117 Count X ? Negligent Misrepresentation ........................................................ 106 Count XI ? Negligent Misrepresentation ....................................................... 107 Count XII ? Violations Of The Maryland Consumer Protection Act,

Md. Code Ann., Com. Law ? 13-301 et seq. ......................................... 108 Count XIII ? Violations Of The Florida Deceptive And Unfair Trade

Practices Act, Fla. Stat. ? 501.201 et seq. ........................................... 109 Count XIV ? Violations Of The New York Consumer Protection From

Deceptive Acts And Practices Law, New York General Business Law ? 349 et seq. .................................................................................. 110 Count XV ? Violations Of The California Consumers Legal Remedies Act, Cal. Civ. Code ? 1750 et seq. ........................................................ 111 PRAYER FOR RELIEF ............................................................................................. 112 JURY DEMAND ........................................................................................................ 113

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Case 1:18-cv-09031 Document 1 Filed 10/03/18 Page 4 of 117

Plaintiffs Kathryn Hyland, Melissa Garcia, Eldon R. Gaede, Jessica SaintPaul, Rebecca Spitler-Lawson, Michelle Means, Elizabeth Kaplan, Jennifer Guth, and Megan Nocerino, 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 ("Navient").

Plaintiffs allege the following upon personal knowledge as to themselves and their own acts, and upon 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 1. 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 $1.5

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 90% of the outstanding student loan volume is comprised of loans backed or funded by the Federal Government.4

2. The skyrocketing cost of education hits our public servants especially hard, including teachers, nurses, and police officers--the backbone of our nation. 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.

3. "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."5 "[I]n no state does a teacher's assistant making the average salary earn enough to provide for the basics for him- or herself and one child."6 "In 38 states, the average teacher salary in 2018

3 See id.; 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 and 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, . 4 U.S. Dep't of the Treasury, supra note 3, at 11. 5 Randi Weingarten, Public Service Debt Relief Is Broken, N.Y. TIMES, (Sept. 27, 2018). 6 AFT, A Decade of Neglect: Public Education Funding in the Aftermath of the Great Recession 4, (2018).

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