Earlier this week the federal government announced they were suing Navient for allegedly cheating student loan borrowers out of their repayment rights. The Attorneys General in Illinois and Washington also filed lawsuits against the student loan servicer.
Millions of student loan borrowers in the U.S. send their repayments to Navient, and these lawsuits could affect Navient dramatically. Here’s what you need to know if you’re a Navient customer.
On January 18, the Consumer Financial Protection Bureau (CFPB) filed a suit against Navient for “failing borrowers at every stage of repayment.”
The CFPB says that the company incorrectly applied borrowers’ payments, even going so far as to ignore the customers’ requests completely.
And if customers could not keep up with their payments, rather than direct them to income-driven repayment plans that could have helped them, the company pushed them into forbearance.
Other allegations include not informing borrowers of their options, misleading them about the student loan rehabilitation process, and over-collecting on delinquent accounts.
Navient issued a statement denying all charges.
4 actions Navient borrowers can take
If you’re a Navient customer, this lawsuit could impact you and your student loan debt. Below are a few steps you can take to protect yourself.
1. Monitor your credit report
One of the core allegations in the CFPB lawsuit is that Navient inappropriately listed borrowers’ accounts as “in default” when the government actually discharged them due to disability.
Therefore, if you’re a Navient student loan customer, check your credit report regularly to ensure your account is reported accurately. You can get a free credit report from each of the three credit bureaus–Experian, Equifax, and TransUnion–via AnnualCreditReport.com.
When you open your report, find your Navient account and make sure that the status is listed correctly.
2. Understand your repayment options
The CFPB is also accusing Navient of not informing customers about their options if they could not afford their monthly payments.
If you are struggling to keep up with your student loan bills and have a Navient student loan, there are income-driven repayment plans that can make your debt more manageable.
There are four income-driven repayment plans: income-based repayment (IBR), income-contingent repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).
While each of the plans is slightly different, they all share the same framework. The government caps your payments at a percentage of your discretionary income, and your repayment term is extended.
Depending on your income and family needs, you may qualify for payments as low as $0. And you can submit the application on your own, for free.
To apply for an income-driven repayment plan, just complete the request form online at StudentLoans.gov. Or, if you prefer, you can complete a paper application and mail it in instead.
To qualify for some of the plans, you need to demonstrate financial need. So be prepared to submit your adjusted gross income (AGI), which you can get from your tax return. Or, via the IRS data retrieval tool.
Alternatively, you can submit your pay stubs or unemployment benefits as proof of financial need as well.
3. Consider refinancing
If you’re unhappy with your lender and how they are treating you, you also have the option of refinancing with a private company.
By refinancing your student loans, you will be under a new lender. And, you may be able to get a lower interest rate as well as a smaller monthly payment.
While refinancing can help you save money and reduce your monthly bill, it does have some drawbacks if you have federal student loans. When you refinance those, you give up benefits like income-driven repayment plans and the ability to enter deferment or forbearance.
However, for some borrowers it’s a smart way to save money and accelerate repayment–all while getting rid of an unsatisfactory lender.
4. File a complaint
If you think the company has mishandled your account or your Navient student loan payments, you can file a complaint.
To make sure the CFPB and the Department of Education hear from real customers, it’s a good idea to reach out not only to a Navient contact but also to the CFPB.
If you want to contact Navient directly, you can email them at firstname.lastname@example.org. Or, mail a letter to:
Office of the Customer Advocate
P.O. Box 4200
Wilkes-Barre, PA 18773.
If you want to submit a complaint to the CFPB, you can reach them by phone at 855-411-2372.
Next steps for your Navient student loan
The accusations against Navient are serious. And this lawsuit could have serious implications for borrowers and the student loan industry as a whole.
But if you’re a Navient student loan borrower, you can take actions to protect yourself and ensure your lender handles your loans appropriately.
And, if you’re interested in signing up for an income-driven repayment plan or refinancing your loans, we can help you through the process for free.
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