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HARRISBURG, Pa. (AP) – A new federal lawsuit by Pennsylvania’s attorney general says the nation’s largest student loan company engaged in abusive practices that have cost borrowers billions of dollars.

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The complaint filed Thursday in federal court in Harrisburg, Pennsylvania, says Navient Corp. and Navient Solutions LLC sold “risky and expensive” subprime loans and damaged borrowers and co-signers by failing to perform core loan servicing duties.

The lawsuit says the companies funneled people into a program that added massive interest costs when they should have been directing them into repayment plans indexed to income.

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Navient issued a statement saying the allegations are completely unfounded and that it complies with federal rules for student loans.

The Consumer Financial Protection Bureau, Illinois and Washington state also sued over the loan practices earlier this year.

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