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If you have a student loan, there are some lawsuits you need to watch.

Navient, the country’s largest student loan servicer, is facing several lawsuits by attorneys general accusing the company of, among other things, steering borrowers to payment options that cost them more money.

Last week, California Attorney General Xavier Becerra filed a lawsuit against Navient and two of its subsidiaries, Pioneer and General Revenue Corp., alleging misconduct that included misrepresenting the order in which the company would apply extra loan payments and failing to properly discharge federal student debt for borrowers with a total and permanent disability.

Becerra said Navient services about $300 billion in federal and private student loans for 12 million borrowers, of whom about 1.5 million live in California.

At issue is an alleged practice to encourage “borrowers to postpone payments through forbearance, an option in which interest continues to accrue, rather than enroll in an income-driven repayment plan that would avoid fees,” reported The Washington Post’s Danielle Douglas-Gabriel. “Consumer advocates say loan servicers steer borrowers toward forbearance because it requires substantially less paperwork than enrolling them in low-cost plans that peg monthly payments to a percentage of income. Navient has long countered that it has one of the highest rates of enrollment in income-driven plans, denying there is a nefarious plan afoot to deny borrowers the option.”

The lawsuit also includes claims from Becerra that Navient’s subsidiaries violated California law by, among other things, providing false information about collection fees on loans people were trying to get out of default and inaccurately telling borrowers that disability loan forgiveness required a permanent inability to work, although no such requirement exists.

“Our students can’t afford to be cheated out of any more money than they legally owe simply because Navient knew how to game the system,” Becerra said in a release about the lawsuit.

The California action is the latest lawsuit to be filed over Navient’s practices. As Douglas-Gabriel reported, Navient is facing similar suits in Illinois, Washington and Pennsylvania, as well as a lawsuit filed by the Consumer Financial Protection Bureau.

Navient punched back over the California lawsuit.

“The allegations are unfounded, and the lawsuit is another attempt to blame a single servicer for the failures of the higher education system and the federal student loan program to deliver desired outcomes,” Jack Remondi, president and CEO of Navient, said in a statement.

Read more: Student loans not always wise

Not withstanding the merits of the lawsuits, as a loan servicer for the Education Department, Navient isn’t wrong in pointing out the following in its response to the latest legal action against it:

— It doesn’t set the tuition prices that result in students having to borrow so much.

— The company isn’t responsible for the complex repayment options and enrollment requirements for borrowers (although it is supposed to fairly inform students of their repayment options).

— It’s not the first point of contact for providing advice to students and families about how much it will cost to earn a degree and how student loans might end up being a burden in the future. “All of these decisions are made prior to the servicer entering the picture,” the company said. “If the parties were truly interested in addressing the real issues in higher education and student debt, they would direct their focus to . . . improve financial literacy of students and families and provide better information about the full cost of earning their degree and the cost of any debt incurred to finance that degree — before they enroll in college.”

Navient has said allegations in the various lawsuits are unfounded.

Read more: Defaulted on student loans? Here’s a new chance to make things right.

In the past, Navient, which was formerly part of Sallie Mae, has had to settle with the government for overcharging military service members.

In 2014, the Justice Department settled with Navient, which paid nearly 78,000 service members $60 million in compensation for having charged excess interest on their student loans. That lawsuit alleged a nationwide practice of failing to provide members of the military the 6 percent interest rate cap to which they were entitled for loans incurred before their military service began, according to a Justice Department statement at the time. The average check was about $771.

Neither Navient nor Sallie Mae admitted or denied wrongdoing. Remondi said the overcharges were due to “processing errors.”

Becerra’s office said Californians who believe that Navient may have victimized them should file a complaint at www.oag.ca.gov/report, call 800-952-5225 or send a letter to: California Department of Justice, Public Inquiry Unit, P.O. Box 944255, Sacramento, Calif. 94244-2550.

From NerdWallet: Navient Lawsuit: What Student Loan Borrowers Need to Know

Just in case you think a student loan is good debt, read the following columns:

Yes, all debt is bad — even mortgages and student loans

Debt: Smack it or hug it? My debate with Michelle Singletary.

Total student loan debt is more than $1.5 trillion. Whatever happens with the Navient lawsuits, it’s a valid argument on the company’s part that we should be talking more about the amount of loans that students and their families are taking out to fund a college education.

Read more: Let your children move back home until they pay off student loan debt

Color of Money question of the week
Have you experienced issues with paying your student loan? Send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Student Loans.”

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What’s the best credit card for college students?

Since there’s already a lot of financial pressure on students, with so many taking out student loans, I don’t recommend they add to their burden by getting a credit card.

Instead, at least during the first few years of college, let them learn how to manage with the cash in their bank account. See how they handle a debit card — one without the safety and cost of overdraft protection.

What’s the best credit card for students?

Last week I asked: When did you get your first credit card, and what mistakes, if any, did you make in using it?

Tom Martin of Woodbridge, Va., wrote: “My first credit card was for a gas station. More than 30 years later, I still have that same account, making it the oldest account in my credit report. For anyone who wants to help their student build credit, I tell them to consider a gas-station card. The primary purpose of the card is to gas up the car, but if you check out which gas stations are in the vicinity of the college, you can plan to get one for a gas station that also performs minor auto services such as oil changes and state inspections. Neither the student nor a hacker can use the card for extravagant purchases. Major financial companies run these card accounts, and they keep a sharp eye on the account activity. If unusual purchases start to show up, the card company will call the account holder to verify what’s going on. This kind of card is a good choice for a student who has enough sense to use it properly. If the student is financially foolish, it’s just as bad as any other credit account.”

Steve Tripoli of the District wrote: “My story isn’t exactly about student cards but is about getting a card when quite young, and how things have changed. I think it illustrates how the consumer credit landscape has changed in ways that are not at all friendly to consumers. In the late 1970s I was about three years out of college, earning about $10,000 a year as a small-town journalist, and already a longtime savings hound with no — zero — debt ever. I had already saved about half a year’s pay, and had bought a used car with cash. I applied for a Sears credit card and was turned down. Puzzled, I went to see the vice president of my local bank (yes, you could do that in those days, but I also knew him as a reporter). He told me I could not get a credit card, despite my excellent finances, because I had not yet established credit — a bit of a Catch-22. So he told me to take out a six-month ‘passbook loan’ secured by $1,000 in my savings account — the interest rate would be 1 percent above what my savings account was earning. I, of course, paid it off promptly in six installments, got my first credit card, and the rest is history.”

A friend’s credit card saved Gretchen Stone of Maineville, Ohio. She wrote: “I always used cash, and borrowed as little as possible to make it through medical school. Just before completing my family practice residency, I bought a ticket to Hawaii that cost only $99 each way. But the airline went bankrupt while we were backpacking, leaving empty desks and a recording suggesting that we make other arrangements. Those were the days of travelers’ checks, and I certainly had not brought enough for another plane ticket. Fortunately I had a cousin with a credit card, who loaned me money to get home. A few weeks later, fully qualified as a doctor, but no credit rating to my name, my mother accompanied me to co-sign for a credit card at our small-town bank.”

“I attended Brooklyn College from 1991 to 1995 and everyday a new credit card company set up shop on the street just outside the college, between two buildings,” wrote Nikhila Pai of Berkeley, Calif. “As a freshman, I couldn’t resist the free candy bars, Frisbees and other junk they offered. I was also so pleased when I filled out the paper forms and soon got approved. Eventually I had 22 credit cards and kept them all in my wallet. I never spent money — I didn’t have any — but I loved the possibility of how much I could spend. While on an especially long escalator in a subway station, a thief opened my backpack and easily slipped my wallet out. Suddenly, I had to remember all those candy bars, Frisbees and cards attached to report the theft. Luckily, I liked paper and had proof of all the cards I held. I ended up canceling all but two and never fell for the free swag again. On my mother’s advice, I’d spend something now and then using the cards to keep them active. Holding those cards for decades and the occasional large purchase (paid back quickly) built my credit beautifully. When I graduated college, I had no problem renting an apartment. While I recognize having 22 cards was silly, I don’t agree having zero cards is a smart way to learn either. It depends on the child, but one or two cards NOT for emergencies but specifically to build credit can be a useful tool.”

Janet Madigan of Herndon, Va., made a good point about carrying a debit card. She wrote: “Whether a student has a debit or credit card, I think they need to be aware of what to do in case of fraud. My daughter’s debit card number was stolen when she was in college and used to charge $800 worth of goods from an Australian pharmacy. Since she went to school in Boston and walked into her bank the same day, it was fairly easy to prove she didn’t make that purchase. They told her, however, that there could be a delay in getting her money back into her account. That had the potential to mess up rent payments, etc., and she had to dip into emergency savings to ensure there wasn’t an even worse impact from the fraud. She was lucky to have that savings account. (Not to mention parents who insisted she set one up!)”

Jayne Hansen of Houston wrote: “My first credit card didn’t come until five years after I was out of college. Back in the late ’70s and early ’80s, a single woman could not easily get a credit card. My dad co-signed for my first car, but even though I paid 100 percent of all the payments, I could not get credit. I still remember that Sears turned me down and I’ve held it against them ever since. Finally, American Express came along and it was perfect for me. I paid my balance every month anyway so it was a win/win. Eventually, I was able to get all the credit cards I wanted, but I will always be thankful to American Express for taking a chance on a single woman who always paid her bills on time.”

“Back when I went to college in the mid 1970s college students did not get credit cards,” wrote Steve Mueller of Austin. “The banks would not issue one if you did not have a verifiable income. Also, credit card purchases were a manual affair. A multipart credit card form would be run on an imprinter. You signed this form and the merchant would give you a carbon copy. The merchant would keep another copy and the original (along with another copy) would be deposited into the merchant’s bank as a cash deposit. Eventually the original and copy would make its way to the credit card company. It would then send you a monthly statement with one of the carbons as proof of your purchase. I was about 25 and looked like a college student, even though I had a full-time job. The merchant eyed me up and down. He was thinking what kind of student has a credit card. He took the charge. I have never seen a credit card slip processed so fast! The purchase was on May 15 and it was posted to my account on May 17. Most of the time, those credit card slips had a float of 1 to 2 weeks!”

Kate Flynn of Reston, Va., wrote: “I got my first credit card about 1973, a year or so before I graduated college. Happy to report that I never made any mistakes using credit cards. I have never carried a balance, paying in full each month. In all that time, there have been relatively few times where I missed or was late making a payment (related to moving or being away on a long trip). All told, I doubt I have paid more than $25 in interest.”

Laura McAfee of Catonsville, Md., wrote: “My mom made me an authorized user on her card when I was still in high school because she wanted me to do the grocery shopping. Back then (in the Stone Ages, a/k/a the 1980s), I do think a credit card for emergencies was a reasonable choice, because pre-Internet, it was actually very hard to move cash long distances very quickly. I went away to college, so I had a different bank because Maryland National Bank didn’t have out-of-state branches. I also never had more than a couple hundred dollars in my account (I was also a scholarship kid, so the only cash I had available was whatever part of my summer earnings didn’t go to tuition and whatever I could make from work study). Oh, and if my parents needed to buy me a plane ticket, the airline would have had to mail me a paper ticket. In that situation, I thought it was perfectly reasonable for my mom to make me an authorized user on her credit card, so I could just go to the airport and buy a ticket on the first flight home if I needed to. Now, though, when my daughter does the grocery shopping, I can give her money in literally ten seconds. We both have bank accounts at the same bank, so I use their app to transfer whatever amount she needs from our account to hers, and she pays with her ATM card, which is also a debit card. And because our bank is a national bank, I plan to do exactly the same thing when she goes away to college next year. With all of the other college choice stress, I am happy that choosing a credit card for her is one thing I don’t have to deal with!”

Color of Money columns this week
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