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Judge rejects Navient bid to dismiss U.S. lawsuit

Aug 7 (Reuters) - A Pennsylvania federal judge has rejected Navient Corp's bid to dismiss a U.S. regulator's lawsuit accusing the nation's largest student loan servicer of misleading millions of borrowers and driving up their loan repayment costs.

In a decision late Friday, U.S. District Judge Robert Mariani said the U.S. Consumer Financial Protection Bureau had authority to sue without first engaging in rulemaking.

He also rejected Navient's argument that the lawsuit should be dismissed because the CFPB itself is unconstitutional.

Navient did not immediately respond on Monday to requests for comment.

The CFPB had accused Navient of "systematically and illegally failing borrowers at every stage of repayment," including by providing bad information, processing payments incorrectly and failing to fix known problems.

Navient was split off from Sallie Mae in 2014. (Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum)