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Meyer v. Navient Solutions, LLC

United States District Court, E.D. Wisconsin

May 30, 2019




         On June 18, 2018, Thomas Meyer (“Thomas”), his wife Christilynn Meyer (“Christilynn”), and their son Logan Meyer (“Logan”) (collectively, “Plaintiffs”) filed this diversity action against Navient Solutions, LLC (“Navient”), claiming violations of the Wisconsin Consumer Protection Act. (Docket #1). On March 1, 2019, Navient filed a motion for summary judgment, which is now fully briefed.[1] (Docket #25). For the reasons explained below, Navient's motion will be granted in part and denied in part.


         Federal Rule of Civil Procedure 56 provides that the Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Boss v. Castro, 816 F.3d 910, 916 (7th Cir. 2016). A fact is “material” if it “might affect the outcome of the suit” under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute of fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The Court construes all facts and reasonable inferences in the light most favorable to the non-movant. Bridge v. New Holland Logansport, Inc., 815 F.3d 356, 360 (7th Cir. 2016). The Court must not weigh the evidence presented or determine credibility of witnesses; the Seventh Circuit instructs that “we leave those tasks to factfinders.” Berry v. Chi. Transit Auth., 618 F.3d 688, 691 (7th Cir. 2010). The party opposing summary judgment “need not match the movant witness for witness, nor persuade the [C]ourt that [his] case is convincing, [he] need only come forward with appropriate evidence demonstrating that there is a pending dispute of material fact.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 921 (7th Cir. 1994).

         2. RELEVANT FACTS

         On September 12, 2013, Thomas executed a Federal Direct Parent PLUS Loan Application and Promissory Note worth $4, 000.00 so that his son, Trevor, could attend college. The loan was disbursed in $2, 000.00 increments on September 23, 2013 and January 14, 2014. The following year, Thomas executed the same type of loan so that his other son, Logan, could attend college. This time the loan was for $13, 260.000, which was disbursed in $6, 655.00 and $6, 605.00 increments on September 24, 2014 and February 9, 2015. The interest rate for both loans is 7.9%. Any unpaid interest that the loans accrue is capitalized, which means that any unpaid interest on each loan is added to the principal. If the interest is not paid, the loans grow in size, with correspondingly higher interest rates. These loans, though governmental, are serviced by a private company called “Navient.”

         The repayment period of the loans began on the day of the final disbursement for each loan. In other words, Trevor's loan became repayable on January 14, 2014, and Logan's loan became repayable on February 9, 2015. Loan payments could be deferred while the student was enrolled at least part-time in an eligible school, but such deferment was discretionary. Navient receives information regarding students' enrollment status from the National Student Loan Database System (“NSLDS”). On January 7, 2014, Navient received a report from the NSLDS indicating that Trevor was enrolled full-time. Thereafter, Navient received regular reports from NSLDS indicating the students' enrollment. As the signatory parent, Thomas was required to pay the interest on the loans even if the loans were in deferment.

         The parties dispute whether the loans would be automatically deferred while the students were appropriately enrolled in eligible schools.

The loan document states that, you may receive a deferment while you are enrolled in school on at least a half-time basis. . .if (1) you submit a deferment request form to your servicer along with documentation of your eligibility for the deferment, or (2) your servicer receives information from the school you are attending that indicates you are enrolled at least half time. If your servicer processes a deferment based on information received from your school, you will be notified of the deferment and will have the option of canceling the deferment and continuing to make payments on your loan. (emphasis added).

         Plaintiffs did not request a deferment or receive a notification that the loans were deferred. Nevertheless, based on this language, they believed the deferment was automatic.

         Direct PLUS Loans taken out by parents are governed by 34 C.F.R. § 685.204(c)(2), which states that loans are eligible for deferral under the following circumstances:

(i) Upon the request of the borrower, during the period when the student on whose behalf the loan was obtained is enrolled at an eligible institution on at least a half-time basis; and (ii) Upon the request of the borrower, during the six-month period that begins on the later of the day after the student on whose behalf the loan was obtained ceases to be enrolled on at least a half-time basis or, if the parent borrower is also a student, the day after the parent borrower ceases to be enrolled on at least a half-time basis. (emphasis added).

         Based on these regulations, Navient submits that Thomas, as the borrower, needed to request a deferment. The parties dispute whether Navient knew that Trevor and Logan were enrolled full-time in eligible schools. In any case, Thomas did not make payments on the repayment due date that began in 2014 because he believed that the loans were automatically deferred.

         From April 2014 to November 2016, Navient made approximately 105 calls to the Plaintiffs regarding the status of the loans, including at least one on Christmas Eve. On December 27, 2014, Navient contacted Thomas and informed him that payment on the loans was past-due. Thomas explained that the students were both in school, but Navient informed Thomas that it did not have the enrollment information necessary to defer the ...

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