What is the Navient Lawsuit?
The Navient Lawsuit is a case filed against Navient. In January 2017, the U.S. Consumer Financial Protection Bureau, Illinois and Washington attorneys general sued Navient.
Furthermore, Pennsylvania’s attorney general filed a suit in October 2017. Also, the California and Mississippi attorneys general filed suits in June and July 2018, respectively. All these suits are against Navient. These suits alleges that since at least January 2010, Navient has:
- Mis-allocated payments.
- Steered struggling borrowers toward multiple forbearance instead of income-driven repayment plans.
- Also, provided unclear information about how to re-enroll in income-driven repayment plans.
- Additionally, provided unclear information on how to qualify for a co-signer release.
Thus, the suit is asking Navient to compensate the borrowers that were harmed. However, Navient believes the CFPB’s claims are “unfounded”. Also, Navient says the ‘Navient Lawsuit’ is based on new servicing standards that are being applied retroactively. This is according to an October 2017 fact sheet.
When carrying out research on Navient lawsuit, please note. It’s necessary you take a look at where it began. Also, how we got to where we are today.
1. The CFPB Lawsuit
In January 2017, the Consumer Finance Protection Bureau filed a lawsuit against Navient. The CFPB accused Navient of failing to act in its customers’ best interests. Among other things, the CFPB charged that Navient:
- Failed to correctly apply or allocate borrower payments to their accounts.
- Also, steered struggling borrowers toward multiple forbearances instead of an income-driven repayment (IDR) plan
- Furthermore, deceived private student loan borrowers about cosigner release requirements.
- Reported loans incorrectly to the credit bureaus.
- Also, failed to inform borrowers of IDR plan renewal deadlines.
In August 2017, Navient filed a motion for the CFPB lawsuit to be dismissed. A federal judge denied the motion.
2. State Lawsuits
The CFPB lawsuit has been followed up with suits from the following states:
- Illinois (January 2017).
- Washington (January 2017).
- Pennsylvania (October 2017).
- California (June 2018).
- Mississippi (July 2018).
The allegations made by the attorney generals in each of these states are similar to those made by the CFPB.
3. Teacher Lawsuit
In October of 2018, nine teachers filed suit against Navient. They were supported by the American Federation of Teachers. This is the second-largest teacher’s union in the U.S.
In their lawsuit, the teachers allege that Navient misled borrowers in public service professions. This was when they tried to access Public Service Loan Forgiveness (PSLF).
Additionally, these teachers claim that:
- Navient attempted to keep borrowers from transferring their loans to FedLoan Servicing (the exclusive servicer for PSLF) in order to avoid losing the associated fees.
Situation on Ground Concerning Navient Lawsuit
The situation on ground concerning the Navient Lawsuit is this. All of these lawsuits are ongoing. Each of the lawsuits are seeking financial compensation for misled borrowers.
It’s important to take note. Despite all these, there’s no such thing as ‘Navient Student Loan Forgiveness’ But if you’re a Navient customer, you may qualify for one of the federal government’s student loan forgiveness programs.
With the sheer amount of data that will be needed to present in these cases, it could take years before any of them is resolved.
Concerning the Navient lawsuit, please note. From the beginning, Navient has claimed to be innocent. It argues that it has serviced loans to the best of its ability.
Also, on its site, Navient responded to the CFPB’s allegations. Here are two of its key responses:
- Borrowers serviced by Navient are 37% less likely to default than borrowers serviced by Navient’s peers.
- 53% of student loan balances serviced by Navient for the government are enrolled in income-driven repayment programs. Navient believe this is more than any comparable servicer.
Furthermore, Navient says there’s a good reason why it recommends forbearances so often to borrowers. It explains that forbearance is often a required tool. This is to help people eventually become eligible to enroll in IDR plans.
Also, Navient says that servicers are paid up to 60% less for borrowers in forbearance. In other words, it would have no financial incentive to recommend a forbearance over IDR.
In short, Navient feels like it’s being picked on in these Navient lawsuits. It contends that it hasn’t done any worse than the other federal student loan servicers,
There are opinions concerning the Navient Lawsuit. Some people claim that despite its faults, Navient isn’t wrong. They claim it isn’t wrong in protesting that the student loan system as a whole is broken.
They hold these claim because, for them:
- The people working for federal loan servicers are overworked.
- Also, they often are not given proper training.
- Furthermore, they may be too busy to give personalized advice to every borrower. As such, they can read from the script.
- When the federal government first introduced the PSLF program in 2007, the Department of Education didn’t give a guidebook about how to handle it. Many servicers simply didn’t understand the rules.
With the Navient lawsuit ongoing, it is important you know this. If your federal student loans are currently with Navient, these lawsuits may have you worried. But don’t panic. There’s a good chance your loan is being serviced exactly as it should be.
However, if you notice any problems with your student loans, contact Navient immediately. With all the bad PR Navient has dealt with over the past two years, it should be eager to fix mistakes.
But if you come across an issue Navient won’t resolve, you can file a complaint with the CFPB. Also, you can file with the Department of Education.
How to Switch Servicers
As a result of the Navient lawsuit you may want a switch. Do you want to switch your student loan servicers altogether? If yes, then note. Unfortunately, that’s not easy to do. The federal government only allows borrowers to switch servicers during a Direct Loan Consolidation.
However, you could switch student loan servicers by refinancing your student loans. But, you may lose out on federal student loan benefits. This includes eligibility for student loan forgiveness programs like PSLF.
In a Nutshell
The above is the latest information on the Navient lawsuit. With the problems surrounding Navient, you may want to reconsider some choices.
However, is Navient or any other federal loan servicer failing you? Or, are they not giving you the personalized student debt advice you need?
If yes, then try student loan Planner. Student Loan Planner can help. Student Loan Planner offers good advice on your loan problems.