by Associated Press

SEATTLE — Washington state is suing the nation’s largest student loan company, joining the federal government and the state of Illinois in alleging unfair and deceptive practices with lending and debt collection.

Attorney General Bob Ferguson says Navient Corp., which was spun off from Sallie Mae Bank, made subprime, predatory loans to students attending for-profit colleges with low graduation rates.

The company is also accused of steering financially strapped borrowers into short-term forbearances; the borrowers were allowed to stop paying temporarily, but the interest continued to accumulate and became part of the principal they owed.

The lawsuit was filed January 18 in King County Superior Court following a joint investigation with the state of Illinois and the federal Consumer Financial Protection Bureau, which each filed their own lawsuits. Navient officials have called the allegations unfounded and politically motivated.

Washington is asking for restitution on behalf of borrowers as well as fines.