What This Navient Lawsuit Means For Your Student Loans: Q&A
If you have a student loan, there is a good chance that it may be serviced by Navient.
Navient, which spun off from Sallie Mae, is the nation’s largest student loan servicer with more than 12 million customers and the servicer of more than $300 billion of government and private student loans.
As a follow up to “What This Navient Lawsuit Means For Your Student Loans,” here are some more action steps that you can take to protect your finances and take control of your student loans:
The Navient Lawsuit: Quick Summary
The California lawsuit focuses on federal student loans, which are backed by the federal government and follows action from the Consumer Financial Protection Bureau (CFPB), which also sued Navient in January 2017. According to the California attorney general’s office, about 1.5 million Californians have student loans serviced by Navient. According to Make Lemonade, this represents about 3.5% of the more than 44 million student loan borrowers who collectively owe $1.5 trillion in student loan debt.
The CFPB alleges that, among other allegations, Navient “systematically and illegally [failed] borrowers at every stage of repayment,” including:
- created obstacles to repayment by providing bad information;
- processed payments incorrectly;
- failed to act when borrowers complained;
- illegally cheated many struggling borrowers out of their rights to lower payments, which caused them to overpay for their student loans;
- deceived private student loan borrowers about requirements to release their co-signer from the loan; and
- harmed the credit of disabled borrowers, including severely injured veterans
The CFPB also alleges that Navient improperly directed borrowers into forbearance when these borrowers otherwise might have qualified for income-driven repayment plans, and did not adequately keep borrowers in income-driven plans informed of deadlines to maintain their eligibility under such plans.
Navient has denied the allegations publicly and in court filings. “The allegations are unfounded, and the lawsuit is another attempt to blame a single servicer for the failures of the higher education system and the federal student loan program to deliver desired outcomes,” said Jack Remondi, president and CEO of Navient, in a statement.
Q&A: Your Next Steps
Here are some popular questions and corresponding answers and action steps:
1. What is the best way to communicate with your student loan servicer to ensure there is no miscommunication?
If you have something material to share with your student loan servicer, then there’s only way to communicate: in writing.
Don’t provide instructions over the phone. Don’t expect that changes will just “be updated.”
Seriously, how many times have you called your student loan servicer and been assured that your request was processed only to find out later that it wasn’t? Not only is it frustrating, but it also may be difficult to dispute later — particularly if your student loan servicer’s error resulted in a late fee or some other expensive miscalculation.
Don’t take the risk: whether it’s payment instructions or formal requests, written correspondence is the way to go.
2. Who do I contact to file a complaint about my student loan servicer?
You have several options to file a complaint against your student loan lender or student loan servicer.
If you live in California, you can file a complaint in several ways:
- Online: California Attorney General
- Phone: 800-952-5225
- Mailing Address: California Department of Justice, Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244-2550.
3. I mailed my payment, but my student loan servicer said it was late and charged me a fee. What do I do?
The best way to pay your student loans is through automatic payment.
In many cases, you may be eligible for a 0.25% interest rate deduction when you enroll in automatic payments. This will also help ensure that your student loan payment reaches your student loan servicer on time each month. Do not rely on sending a paper check via regular mail because there is no guarantee that your check will arrive on time or at all.
Enroll directly with your student loan servicer’s online platform so that you can create a direct paper trail in case of any dispute. This is preferable to using free bill pay at some banks, which may send payments by paper check (rather than electronically through ACH), which can lead to further delay.
4. My student loan servicer sold my student loan. Is this even legal?
Not only is it legal, but you should expect it will happen to you at least once (and maybe more) over the course of your student loan term.
There’s no need to panic.
When your student loan servicer changes, make sure to update your automatic payment information to your new student loan servicer (and stop automatic payments for your previous student loan servicer).
5. My student loan servicer reported inaccurate information and it impacted my credit report. What do I do?
Don’t rely on your student loan servicer to make sure your student loan payments are reported accurately to credit bureaus. Expect that your student loan servicer may make multiple mistakes throughout the life of your student loan.
It is incumbent upon you to be vigilant and pro-active to spot any mistakes as soon as they happen so you can correct them. You’re right – this shouldn’t be your responsibility to have to double-check your student loan servicer. However, you will save time and avoid stress by monitoring your credit reports regularly to ensure accuracy.
There are three major credit bureaus: Experian, Equifax and Transunion. You can request a copy of your credit report from each lender, or check AnnualCreditReport.com.
6. My student loan servicer didn’t explain all my options to me and now I’m enrolled in the wrong payment plan.
Don’t rely solely on your student loan servicer to provide you with all the facts. Do your homework, invest the time and get informed.
One role of your student loan servicer is to help you understand your available options with regard to your student loans. However, your role is to get informed. Don’t let your student loan servicer steer you toward a short-term option when you should choose the long-term solution.
Whether it’s student loan refinancing, student loan consolidation or student loan forgiveness, make sure you understand all your options.
When you do, you’re in control of your financial life.