Navient Corporation, our nation’s largest student loan servicer has been hit with three more lawsuits alleging they harmed student loan borrowers. The lawsuits may take years to play out, mainly due to the sheer volume of evidence that has been gathered against Navient. Navient services more than $300 billion in federal and private student loans for more than 12 million borrowers.
In January 2017, the U.S. Consumer Financial Protection Bureau (CFPB) and the Illinois and Washington Attorney Generals sued Navient. They allege, among other things, that Navient misallocated payments, steered borrowers toward multiple forbearances instead of income-driven repayment plans, gave unclear information as to re-enrolling in income-driven repayment plans and how to qualify for co-signer release. The suit asks Navient to compensate the borrowers who were harmed. Navient has filed motions to dismiss the three lawsuits.
In an April 25th report, the CFPB again showed a high amount of complaints against student loan servicers with almost 15,000 complaints from Nevada alone. The Bureau has handled approximately 44,000 student loan complaints from consumers as of April 1, 2017.
Around 64% of the complaints concern problems dealing with the servicer. These include not being informed about options that would allow them to repay or continue to repay their loans. Instead the borrowers are pushed into stopping their payments (forbearance) so that the interest continues to rise. Another complaint is misapplied payments by the servicer that lead to other harmful problems such as negative credit reporting and loss of loan benefits. Navient was called out as having enrolled over 2 million borrowers in two or more consecutive forbearances totaling 12 months or more creating an additional $4 billion in interest from the borrowers.
In the CFPB report, complaints are rampant about the difficulty in getting income-driven payments, the long delays in processing, the continued ‘loss’ of documents by the servicer, borrowers having to repeatedly send in documents and forms. Borrowers who get into the income-driven plan have to reapply each year. If they don’t renew, they’re automatically dropped from the program causing a rippling effect of higher payments and lost interest subsidies. The lawsuits claim Navient failed to alert the borrowers adequately to the deadlines and consequences of not renewing.
There were numerous errors, misrepresentations and manipulating by Navient that are laid out in the lawsuit regarding co-signers. According to the lawsuits, Navient created obstacles that made releases deceptively difficult to obtain. Navient is said to have manipulated the way it counted ‘larger than required payments’.
The lawsuits also allege borrowers who defaulted on their loans were “systematically misled” about the process of “Rehabilitation” by Pioneer Credit Recovery, Navient’s debt-collection subsidiary.
If you have questions concerning your student loans, options you may have, negotiating the terms of your loan, you can seek an attorney specializing in student loan debt.
Gantenbein Law Firm has experience with successful resolution of student loan debt for clients, including substantial settlements of student loan debt, student loan payment disputes, contract disputes and disputes of student loan accounting. For more information, or to request a free consult, call 303-618-2122.
Gantenbein Law Firm's lawyers also have extensive experience and knowledge in the legal areas of: Business Law; Real Estate Law; Probate Law; Wills, Trusts and Estate Planning; Disputes with Colorado HOAS, or Colorado Homeowner Associations, Credit Dispute and Credit Repair; Tax Law. For more information their Denver, Colorado attorneys, areas of practice, or to schedule a consult to discuss your best legal options for your case, visit www.gantenbeinlaw.com or call 303-618-2122.