What Student Loan Borrowers Need to Know About Navient Lawsuits

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1 What Student Loan Borrowers Need to Know About Navient Lawsuits Matt Ribe,U.S.News & World Report 4 hours ago, September 5 th, 2018 The number of lawsuits against a prominent federal student loan servicer has grown recently. Federal student loan servicers, such as Nelnet and Navient Corp., are companies that collect payments, respond to customer service inquiries and perform other administrative tasks on behalf of the U.S. Department of Education. State attorneys general in California, Pennsylvania, Illinois and Washington have filed suits against Navient, one of the largest of these servicers. The chain of recent lawsuits are in addition to an earlier suit brought by the Consumer Financial Protection Bureau in January The CFPB alleges that Navient processed student loan payments incorrectly and prevented struggling borrowers from making lower repayments. Readers often send the Student Loan Ranger questions about these lawsuits and what they might mean for their outstanding student debt. Here are tips for student loan borrowers to consider. Understand why states are suing Navient. While federal student loan servicers are contracted by the Department of Education to manage borrower communications and payments of federal student loans, consumer advocates say that the agency isn't doing enough to ensure borrower protections. [Read: How the Trump Administration May Reform Student Loans.] Under the Trump administration, the CFPB moved its Office of Students and Young Consumers -- a unit that had taken aggressive steps to regulate student loan servicers -- into the Office of Financial Education. Just recently, the CFPB's student loan ombudsman, Seth Frotman, resigned in protest, saying in his resignation letter, "By undermining the Bureau's own authority to oversee the student loan market, the Bureau has failed borrowers who depend on independent oversight to halt bad practices and bring accountability to the student loan industry." The CFPB's Office of Students had previously published a number of helpful resources for borrowers, such as sample instructions to loan servicers for applying monthly payments. In response to what they see as the federal government shifting resources away from consumer protections, the state attorneys general cite their responsibility to protect their constituents as justification for these new lawsuits. [Read: What to Know About Possible Bankruptcy Rule Changes for Student Debt.] Similar to the 2017 CFPB suit against Navient, the California case and other lawsuits allege that the Delaware-based company inappropriately put borrowers into temporary forbearances instead of helping them sign up for income-driven repayment plans.

2 When borrower are in forbearance, they don't have to make monthly payments, but interest still accrues on their loans. Moreover, the borrowers are still responsible for making the skipped payments once the forbearance ends, or the borrowers exhaust their available forbearance period. Forbearance is intended as a temporary relief for borrowers experiencing a short-term financial hardship, such as the loss of a job or an unanticipated expense. The attorneys general argue that borrowers would be better off in income-driven plans, since monthly payments can be quite low. That way, borrowers stay in the habit of making monthly payments and get closer to making the required number of payments to be eligible for a loan discharge. [Read: Tips for Borrowers to Ensure Student Loans Are Serviced Correctly.] Navient argues that the allegations in these lawsuits are unfounded, and that difficulties in selecting a repayment plan best suited for each borrower are ultimately caused by complexities in the federal student loan system, which features several loan types and repayment plans. Meanwhile, the Department of Education asserts that because student loans and servicers are regulated federally, states lack jurisdiction to oversee servicers. Know what student loan borrowers can do. Unfortunately, individual student borrowers are not able to join the state attorneys general lawsuits against Navient. While waiting on the court system to resolve these disputes, student loan borrowers should take extra steps to ensure their servicers are following their instructions and applying payments correctly. If borrowers sends in extra money, for instance, they need to advise their servicer explicitly on how the additional amount should be applied. Student borrowers should also take the time to learn the difference between deferments, forbearances and repayment options for their federal loans. With many different loan types and repayment plans, it's easy to get confused or overwhelmed. If you'd like to work with a certified nonprofit expert, the Student Loan Ranger recommends reaching out to a student loan counselor who can help you explore your options. Comments: Comment Guidelines Post: Top Latest My Comments Jennifer 30 min ago I used to work for Sallie Mae collections and I can tell you from first hand experience we were instructed to push forbearance over IBR programs. This is because it brought the account "current" and capitalized the interest so the principal balance was larger than every. We were also given bonuses based on how many accounts were brought current, either by payment of forbearance. I quit after 3 months due to having rationed restroom breaks of no more than 5 minutes a day. Show replies (2) Reply 6 1 Denise 17 min ago

3 I would like to suggest the option of paying off school loans in more than one option, maybe a sort of community service, heck I would serve time to pay it off faster because it is not realistic for me to ever get the kind of job that would afford paying them back so I will make payments the rest of my life; therefore, I would love to be given a public service assignment that is worth the 50k I borrowed and be done with it. This way no one would dare accuse me of not working to pay the money back. I will volunteer my time for whatever cause in lieu of 50k. :) Show replies (1) Reply 5 Kevin 43 min ago There were times my wife and I rationed food to pay our loans. We both had huge loans right out of school. Neither one of us could find a job that paid enough to support those loans so we took on multiple jobs. After twenty years I have mine paid off and hers is down to $5,000. She still works two jobs seven days a week to be able to keep paying her loans. This is what you have to do sometimes. You have to make sacrifices to get where you want. We both have better paying jobs now but still want to get out of debt so we still work the second jobs at this point. Today's young ones seem to think they should just walk out and get a job handed to them that will pay that loan off in a couple of years. Sorry... not how it works. Most of the loans are structured to be paid off over twenty years or longer. It is worth it in the end if you are willing to put in the work. Quit expecting to be handed everything in life and get a work ethic. I do not mean being a professional blogger 18 hours a day. People have to learn to do without. We make our coffee at home. We don't buy it every day. Stuff like that. It is OK to drink Folgers. You will live. Show replies (4) Reply 9 8 quebec 39 min ago My private lenders keep raising the interest rate. I am now at 12% on one and 11% on another! Beautifulwmn New York 33 min ago The federal student loan business is a huge fraud against students in this country with the department of education allowing lenders to commit fraud against students. Citibank stole millions while partnering with Loan guarantee companies like Edfund in California. Edfund was stealing millions and illegally allowing loans to default so they could collect higher fees and repayments with higher interest. Meanwhile the Edfund employees voted themselves six figure salaries and took european vacations, had starbucks delivered to their office while students struggled to repay loans that had ballooned from $10k to over $100k, leaving students with no way to pay back ever. Nelnet stole over $25 million in their scams against students, and then the crooked department of education hired Nelnet to oversee disability discharges. Nelnet never paid back the money. Federal Student Loans are one-sided contracts which illegally violate all the rights of the students. Student loan defaults are now in the Billions. Financial Aid offices were in a get rich scheme to defraud students with paybacks from Citibank and other lenders to be the sole primary lender. When they were all confronted with their illegal schemes, Citibank was allowed to pay a mere $2 million into a supposed slush fund to educated students on loans. California is the Scam Capitol of the world with elected officials, and agencies profiting off of fraud

4 against consumers and Taxpayers. There is over 60 Billion in Medicare Fraud per year and California is in the middle of the Fraud. Reply 4 Desktop 24 min ago The solution here is not just, 'pay it back' when the servicer is doing everything possible to not allow hardworking, reputable students, in good paying positions to pay them back because there is a financial based incentive to keep changing the rules. The issue here, has always been about the moving target that is taking shape called the 'payback'. Show replies (1) Reply 1 1 Michael 38 min ago My wife is a doctor by way of Columbia medical in NYC. 200k in student loans. You would think government would forgive some. NJ just allocated 2.5 million to give free legal to illegal immigrants. I don't remember that being on a vote. Why are we allowing these criminals to allocate our money. Where is taxation. Without representation. What are we doing voring these crooks into office. Show replies (4) Reply 6 2 MikeP 15 min ago The problem with student loans is that they exist. Follow me here, when the government went into the business of providing loans, colleges got the bright idea, hey these kids can get the money from the government, let's raise tuition. Had the government never gotten into the business of being a bank, colleges would have been forced to keep costs low because to survive they would have to compete for the smaller pool of money. Colleges are really not your friend when it comes to a liberal arts degree, perhaps in a science or advanced technology you could offset the costs, but really a BA in fine arts where are you gonna go with that? Fifi 25 min ago My son still lives with me at 35 years and still paying student loans. He will never leave we have come to that point. Yet in NY they have now free college if you meet the standards which most do. So why can't we be forgiven the loans for at least 2 years worth. You gave the next generation free college. That's totally unfair. Millions have paid into student loans for years, and years and we get zero. How is that fair? Reply 6 3 Jennam75 16 min ago Navient is a bear to content with. I paid on my $40k loan for 21 years, and from 2004 (when my loan came to be with Navient) until recently, EVERY SINGLE PAYMENT WAS INTEREST ONLY! I tried so hard to chip away at the principle by paying a few hundred extra a month when I could, and I just couldn't do it. I called them about 3 years ago and was told I'd need to increase my monthly payment to $2500 to

5 make that happen. That's absurd! I was told unless I did that the loan will likely never be paid off as I would have continued to only pay interest. It was so frustrating. In April of this year I received a surprise inheritance from a relative and I was told it was for a down payment on a house, but I decided to pay off my loan instead. I'd rather rent for a few more years and be debt free...and damn doesn't it feel wonderful! Show more comments