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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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|2.47% – 6.23%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|