State attorney general alleges fraud at student loan company

CHICAGO (AP) - Illinois Attorney General Lisa Madigan's office is suing the nation's largest student loan company, alleging unfair and deceptive practices with lending and debt collection.

The lawsuit filed Wednesday in Cook County seeks restitution and penalties. It names Navient Corporation and several company subsidiaries, as well as Sallie Mae Bank. Navient formerly was part of Sallie Mae.

The U.S. Consumer Financial Protection Bureau filed a separate lawsuit Wednesday, alleging Navient made it harder to repay loans by giving bad information, processing payments incorrectly and failing to address complaints.

Madigan alleges the companies knowingly put students in expensive and risky loans they knew would fail. Madigan estimates tens of thousands of Illinoisans were affected. She says it's unknown how much money was involved.

Navient officials dispute the allegations in both lawsuits and claim they're politically motivated days ahead of a new presidential administration.

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This story has been corrected to say that Sallie Mae is not a subsidiary of Navient. Navient was formerly part of Sallie Mae.