On Wednesday, The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against student loan servicer giant, Navient.
Formally part of Sallie Mae, Navient is the largest student loan servicer in the country. The company services the loans of more than 12 million borrowers. This adds up to more than $300 billion in federal and private student debt.
This lawsuit could be HUGE for student loan borrowers who hold debt with Navient.
Navient Defrauds Millions of Student Loan Borrowers | Is the Allegation True?
Let’s Talk About The Allegations
The lawsuit alleges that Navient cheated student loan borrowers out of rights in relation to repaying their student loan debt. Specifically…
- They gave student loan borrowers incorrect information
- Disregarded complaints
- Processed payments inaccurately
- Guided borrowers who were consolidating student loans with bad credit toward repayment plans that were of a higher cost
By doing this, Navient was able to save on their operating costs (how convenient for them…)
As a result, many borrowers ended up paying more for their loans than they had to.
The CFPB claims that Navient has violated a number of regulations and laws:
- The Dodd-Frank reform act
- The Fair Credit Reporting Act
- The Fair Debt Collections Practices Act
The Two Sides
Richard Cordray, CFPB director, said,
“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.”
The CFPB aims to prevent any future harm to students borrowing college loans –with bad credit and good credit.
Additionally, they want to provide redress for those who have been affected by this.
Navient hasn’t been quiet about the allegations. They released a statement saying,
“Navient welcomes clear and well-designed guidelines that all parties can follow, and we had hoped our extensive engagement with the regulators would achieve this objective. Instead, the suit improperly seeks to impose penalties on Navient based on new servicing standards applied retroactively and applied only against one servicer. The regulator-asserted standards are inconsistent with the Department of Education regulations, and will harm student-loan borrowers, including through higher defaults.”
So, What does this Really Mean for Student Loan Borrowers?
Well… first off, student loan borrowers who have felt helpless, ripped off, lied to, and scammed out by student loan servicing companies should finally feel like they are getting their vengeance. In fact, because of these student loans, bad credit statuses were assigned to them.
However, this is good news for student loan borrowers. We should all be thanking the CFPB and sending them flowers for finally doing something about this. At least now, borrowers will have a chance at the best college loans available today.
Perhaps one of the saddest parts of all this is that Navient, formally Sallie Mae, is made out to be a company who is supposed to help students with a school loan and bad credit get out of debt.
But instead, since 2010, Navient has been found to raise interest rates, increase monthly student loan payments, private loans for bad credit, and intentionally hide student loan programs from borrowers who could get help from those programs.
How is that even the slightest bit fair for the borrower?
It’s not…
Because they are tricking borrowers into thinking that they are already in an ideal student loan situation when they really aren’t.
(Pro Tip: Want to quit playing the guessing game with your student loan servicer? Get all the essential information you need to ensure you are getting the best repayment plan benefits available to you with the 8-Plan Cheat Sheet to Student Loan Repayment Plans to Student Loan Repayment for free. To get your free download, click here.)
It’s something that we have been trying to make borrowers aware of and advocate against for years now.
There are a Few Things that Borrowers Can do in the Meantime…
The CFPB just served Navient the ice cold lawsuit last night at midnight, which means, this lawsuit is just getting started. And with 12 million borrowers being serviced by Navient, this could potentially go on for years to come.
Now, hopefully, that doesn’t happen. But there are a few things that borrowers can do right now to be safe…
- They can do nothing, and hope the CFPB lawsuit will not only prevail over Navient, but also come to a quick end
- They can continue to ask Navient to help them with their loans, even though there’ve been enough proof for CFPB to file a seemingly multi-million dollar lawsuit against them
- Or they can take matters into their own hands
By choosing the last option, borrowers can easily make sure they are truly in the best situation they can be in.
They can make sure they have a monthly student loan payment they can afford each month.
They can relook at their options with a professional and choose the one THEY think is the best option for them… not the option a company just accused of defrauding millions told them was the best option.
If you want the third option, it’s as easy as speaking to a truthful student loan counselor. We aren’t promising relief for everyone. We’re just here to advocate for the borrower as much as possible, and will jump through hoops to ensure you are in the best situation you can possibly be in.
We’ve spent the last 5 years speaking to recent college grads and student loan borrowers helping them weigh their options and reach their financial goals by helping them find the relief they want from their student loans. Just this past year, we’ve been able to help over 15,000 student loan borrowers reach their goals.
So what you do with this information, 100% your choice, but after dealing with a company like Sallie Mae/Navient, there may not be a better option for student loan borrowers than taking matters into their own hands.
Read more here Forbes.com, Latimes.com, USAToday.com.
Are your loans serviced by Navient? We want to hear from you!
Let us know what you think about these allegations against them. Or tell us if you believe you have been treated fairly or unfairly by Navient/Sallie Mae.
UP NEXT: How To Lower Your Navient Student Loan Payment
Editor’s Note: This post was first published on January 19, 2017, and has been updated for quality and relevancy.
After 20 years I have gotten nowhere paying off student loans… Have not missed a payment
I’ve been paying on my loan for 10 years, we pay $350 a month sometimes even $700. Every time we get under $8000 they raise the interest rate again. I’m up to 11% now. Last year I called them and they told me if we continued making $350 payments that I would be done in two years, which would have put me at having it paid off at the end of this year. Now they are saying I won’t pay it off till 2023. That’s 16 years! For a $25,000 loan! They are disgusting. And there is NO relief! I don’t want to lower my payment so I can keep paying double the time I have left on it. I just want the damn thing gone!
I just logged onto my navient account. Last night, all of my loans INCREASED instead of decreased, and I am talking some by 27%. I am about to cut them off completely and take my losses on the credit report. I pay and pay and they don’t move down – now they increased by nearly 50%.
I will be paying on mine till the day I day with no relief. Sallie Mae refused to lower my interest rate because I started school 1/4 too early. Was locked in at 8%. Could never earn enough to pay it back and had to keep deferring it. Sucks
Hey Conrad,
Dealing with your loan servicers can be super frustrating, we hear stories like this all the time.
Are you currently on a repayment plan that works for you, or are your loans still in deferment?
If you’d like to look at some of your options when it comes to paying back your student loans, please feel free to give us a call at 877.433.7501. One of our experienced student loan counselors will be able to look at your loans with you and hopefully help you lower that monthly payment to a manageable amount!
I’ve been going thru Navient for about 2 years now. It seems like my balance NEVER goes down! Right now, I pay $187 month (if I can).. My balance is over $14,000 with an interest rate of at least 7% on each loan (4 different loans). At this rate, I’ll never get these paid off!!
Hey Kristy,
Unfortunately, we never hear the end of the complaints when it comes to Navient. It seems like almost everyone has an issue with them.
Have you looked into any options to lower your monthly payments, not through Navient?
If you’d like to speak with a Student Loan Specialist, please give us a call at 877.433.7501. One of our specialists will be able to go through your loans with you to make sure you’re on the right repayment plan and not overpaying!
I know I have been a part of their fraudulent activities preying on people who have student loans with outrageous interest rates and payments. My loan debt is over 100,000. and I can’t afford to pay the huge monthly amount. I have had numerous deferments and tacked on additional interest rates that makes it impossible to pay back. I am 62 and I don’t want to leave this to my children but how can I pay this back in my lifetime. I made a contract for debt forgiveness and paid out a lump sum with low monthly payments of 29.00 but now they have re-certified and decided I need to pay quadrupled the amount. No guaranteed to forgive or cancel debt.
I have about $58,000 with Navient right now and they are crooks. My loans and my payments doubled in the last two years with absolutely no explanation …..my interest-rate’s (2 loans) went up and my payments doubled, like I said, and I called the loan servicer,who used to be Sallie Mae, which the article states. But is now Navient. They were absolutely no help at all….they hung up on me….they could not speak English… and they had no explanation as to why my interest Rate went up and why my payments have doubled. They are crooks and the federal government needs to step in and help us do something. They had no problems stepping in and helping build out the big banks, and yet they do nothing for the consumer that keeps the banks in business. Maybe having a businessman run our country now can help out with something. Who knows, but I am going to watch this closely and maybe some of us should start a class-action lawsuit. Could we? Or not in this case. Pain and suffering it seems is the least of all our worries. That’s just the first thing on a long list of issues this causes all of us.
Had a parent plus loan with Navient. HIGH interest rate and made it really difficult to help take some of the burden off our student for her loans. Loans should be lower interest for student loans and parent loans to really help put our children through college. Sad that Navient and Sallie Mae can’t keep that in mind when doing loans.
I would love to know more~is there going to be a class action suit? I want in, if so,
they have raised a$7k loan into 20-35K loan because the payments are so high i cant make them and survive (live), now cause i have missed payments they want to raise it again!!!!!!! I just want them to drop it back down to the original amt minus all the added interest and service fees, so i can get it paid off! and it wasnt even my loan, it was for my son, (a parent plus loan)…. HELP PLEASE!!!!!!
Thanks for this value information.
I would like to know for sure if they are going to give that money back to us students who had been placed in rehabilitation programs, montly payments and my loans are way to high.
I co-signed for my daughter to obtain a student loan w Sallie Mae for her first year of college in 2005 because she was only 17 at the beginning of the first semester. She graduated in May 2009 and repayment at that time was deferred. When I retired I satisfied the first year loan at approx 32,000. I used my retirement funds because I could NOT afford to have that much debt on my credit report and I did NOT anticipate that the interest accrued on the loan would be that much. The initial loan secured in 2005 was approx 17,000. Because of interest capitalizing, whatever that means, the loan balance almost doubled. Why have such a process for students who do not have jobs?
My student is 35,000. I graduate from Everest University in 2013. They didn’t help me find a job,Like the Advertise. The program I choose was Homeland security. I still haven’t find no job in my field. I am working job to to job making $10. I am a single mother of 4 kids. One of my daughter’s born with one hand so she has to go the Physical therapy 3 time week. So that cut into my check. It’s impossible to pay this loan off. I would some Love some help
Yeah!! It’s good that I read this!! Because it’s true! Because one day I saw that the amount of my loan was the double!!! And I called them and ask for an explanation and the lady told me that the amount is higher because I had consolidate the loans, and I said noo!! I am supposed to do it in the next months! I hadn’t make anything and she star looking at my records and told me that she can’t find any evidence of the consolidation at that time, and gave me a phone number to call so they can help me!!! And when I told her that I was requesting help from USSLC she start talking like bad things of this company that they’re going to charge me money for processing the aid, that I can do it for free by myself… and I told her: but why if you know about this free aid of Obama either you or my counselor never explain me that so I didn’t have to pay you the loan? And she stay like quiet and change the conversation theme and never gave me an explanation! ? And because I was in the final days to receive the approval for my Aid with USSLC I just leave it like that. But it’s a lot!!! Of money! I have no regrets on requesting this Aid!
I am trying to find out what my total debt is in student loans and have not gotten anywhere. I don’t think that us as students should have to pay back soooo much interest. I would love to get my students loans paid off.
I feel that all student loan suppliers take advantage of us and we don’t realize it until it is to late and in indebt to no end.
At this point my wages are being garnished at a rate of @650. Per month I have just been evicted from my home and they said they never received my documents and just refuse to lower my payments and added an additional 17k. Onto my loan my loans were supposed to be consolidated and they show as closed accts(15) on my credit report affecting my score the ability to get a better paying job so I can repay consistently
I am currently in default AGAIN. I graduated in 1994 (I think). My student loan was about $14k. I jad paid on this loan. Been in defaukt, was put on a payment plan for YEARS where they were garnishing my paycheck in addition to me making additional payments with a promise thst if I did that for 11 months, I would be able to have someone buy the loan & make very small payments & get it off my credit report. That went on for about 3 years. I have paid in excess of $30,000.00 or more since I got out of school. Would love some help getting out from under this. I have never been able to buy a home or great good rates on anything because of this.
I think I have been cheated by Navient . How can a 1200 student loan get up to 16000 in a couple of months and I would like it to disappear.
Mines actually tripled