Borrowers must always ask how to lower your Navient student loan payment. No matter how much you owe, there are ways to help you manage monthly payments and overall interest. Although private student loans help borrowers a lot, they can be difficult to repay. Here’s what you need to know to help you lower your student loan payments.
The 411 on How to Lower Your Navient Student Loan Payment
In this article, you will learn about:
- Navient is Part of an American Student Loan Bubble
- Even If You’re Struggling to Make Payments, It’s Something You’ve Got to Do
- Missing One Payment Is Not Missing Only One Payment
- How to Bring Those Payments Down
- Traditional Repayment Plans
- Income-Based Repayment Plans
- Other Strategies
Navient is a student loan servicer. According to their site, Navient regularly buys groups of loans that “include one or more of your federal student loans.”
It was formed in 2014 when Sallie Mae broke into two distinct entities. Navient took on the managing of educational loans, and Sallie Mae started handling personal financing. Navient is among the leading players in the student loan scene, managing the most student loans of any company. Here’s a comprehensive guide on Sallie Mae Navient terms and conditions.
Not Without Controversy
There were a few issues which swirled around Navient since it started. A number of federal student loan borrowers had difficulties with the corporation. This kind of problem with shifting from federal loans to private loans is common.
- Not logging repayments promptly
- Failing to cap their loans at 6% as was legislated by the Servicemembers Civil Relief Act
- Faulty assessment of repayments
Navient has had more than its fair share of disgruntled customers. In fact, on January 18, the Consumer Financial Protection Bureau (CFPB) filed a class action lawsuit against Navient for knowingly defrauding millions of student loan borrowers. You can read more about Navient’s class action lawsuit here.
What’s the point? This is the number one thing to consider when dealing with Navient. If you’re struggling with them, you are most certainly not alone.
Navient is Part of an American Student Loan Bubble
Struggling to make payments? You are by no means the only one. Refund issues are a relatively common occurrence. According to the WallStreet Journal, a staggering 43 percent of student loan recipients are behind in their federal loan repayments. In the last financial year, an astonishing 1.1 million Americans defaulted on federal loans.
Our friends at Student Loan Hero recently came out with a report that noted student loan debt is north of $1.44 trillion dollars. The overall debt numbers are terrifying.
To put that into perspective: you can treat every American with heart disease or diabetes, immunize every child in the world, and double the amount of money spent on cancer research, and you’d have only spent half the money. It’s pretty remarkable.
In their report, SLH noted the average student debt per graduate stood at $31,200. The important thing to remember is a lot of people, 44.2 million to be exact, were or are still in the same boat.
They’ve got a lot of student debt, and a lot of them are unsure on how they’re going to repay it. Unfortunately, loan forgiveness with private loans is not possible. Since they are a private company, the federal government cannot do anything about it.
Even If You’re Struggling to Make Payments, It’s Something You’ve Got to Do
It’s a difficult thing to hear but when you’re struggling to make your payments, the worst thing you can do is miss one. Late charges can quickly add up. Not to mention the interest on those late charges will rapidly add to the overall cost of your loan.
And they’re not the only negative impact–your student loans are an installment loan that reports to the three credit agencies: Experian, Equifax, and TransUnion. Missing a payment will result in a lower credit score. According to National Credit Federation, there are several ways student loans affect your credit score. If you’re about to miss a payment or you already have, it’s a great article to help you navigate through that.
Missing One Payment Is Not Missing Only One Payment
Many student loans are regarded as a series of loans, with each disbursement of funds considered as a separate loan. Miss a monthly repayment and you’re not missing a repayment on one loan, you’re missing one on several.
The cumulative damage to your credit score can be a huge drag factor in your post-college life, making it more expensive to borrow any sort of money. That’s not all, should you be delinquent or fall into default on your student loan repayments, there are a number of possible outcomes:
- You can have money withheld from your paycheck.
- Credit collection agencies may send threats your way.
- In the worst case scenario, you may find yourself being taken to court.
Most people don’t get taken to trial, but it’s important to be aware your lenders have that option at their disposal. According to the Department of Education, your student loan is a legal contract, and you are contractually obliged to make the repayments. Even if the worst case scenarios don’t occur, you’ll still struggle to get any more help further down the line. Further aid, deferment, or forbearance will be off the table.
It’s crucial to act early to give yourself the opportunity to use these options at a later date should it become necessary to do so. In essence, once you start missing payments, it’s a downward spiral. If your monthly payments are too large, what you need to do is bring it down to something more manageable. So now, we need to look at how you can take control of the situation, and bring those debt repayments down to something doable.
How to Bring Those Payments Down
There are some strategies available for those who need to bring their monthly payments down. It’s worth taking the time to do your research and see which one will be the best fit for you. It can reap dividends in the long run if you get the best plan possible.
Navient does offer some different repayment options, from the traditional types to income-based strategies. Here’s an infographic we put together depicting some of those options:
Traditional Repayment Plans
There are three main types of traditional repayment plans:
- Standard Repayment Plan
- Extended Repayment Plan
- Graduated Repayment Plan
A Standard Repayment Plan is, as the name suggests, the standard. It is simply a regular monthly repayment of a minimum of $50 up to ten years. In the long run, this works out cheapest as you’re paying the least interest. But, the payments may be high as this is the repayment with the shortest term.
An Extended Repayment Plan gives you the option of repaying your loan over a longer timeframe. Loans can be repaid over a period of 25 years. This is an option for those students whose debts exceed $30,000. This has the advantage of lower monthly payments as the loan is repaid in more months. But, the downside is you will, over the lifetime of the loan, pay far more in interest.
Graduated Repayment Plans are those which take into account the likelihood of your financial situation improving after you graduate and move forward in your career. Payments start low and increase every two years. The main drawback here is you will end up paying more in interest over the lifetime of the loan.
Income-Based Repayment Plans
Income-based repayment plans are those catering your payments to your income. These are good options for people whose debt is quite large in relation to their income. There are four main types of income-based repayment plans:
- Pay as you earn repayment plan
- Revised pay as you earn repayment plan
- Income-based repayment plan
- Income-contingent repayment plan
Pay as you earn repayment plans often come with the cheapest monthly repayment amount. Repayments are calculated as 10 percent of your discretionary income. To qualify for such a repayment plan, you need to able to demonstrate the monthly amount you’d have to pay under a standard repayment plan will be higher than that under pay as you earn.
Revised pay as you earn is similar to pay as you earn in the calculation of your repayments. But, it has the bonus of only paying 50 percent of the interest which accrues over the life of the loan. Given that these loan periods are typically 20-25 years, this is a considerable saving.
Income-based repayment plans, like pay as you earn, take your income and family size into consideration. They also look at the size of your family and your state of residence. With Navient, these repayment plans are also available for FFELP loans. This is the only income-based repayment plan for which this type of loan is eligible.
Income-contingent repayment is designed for graduates who are less likely to have relatively well-paying jobs, such as those who are intent on entering public service where there is a limit to how much you can earn. Typically, they have slightly higher payments than income-based plans, but they do benefit from fixed interest rates. When you’re talking about a 25-year loan, this becomes very beneficial.
There are pros and cons to all income-based savings plans. They generally offer affordable repayments, but their lengthy terms mean the total interest paid may be higher. You have to check your eligibility, as not all plans are available to all people, but they do offer the option of loans being forgiven after 20 years of payments.
Keep in mind that any forgiven loan amount can be regarded as taxable income. One important aspect of income-based plans is the flexibility. You do always have the option of making extra repayments without penalties. So if you’re having a good month, why not chip a little extra off the student loans?
It isn’t only a shift in the repayment plan that can help reduce your student debt; there are other options available:
A consolidation loan is an option for those who have multiple student loans. It gives you the opportunity to combine the multiple debts into one single loan. This strategy has some strong pros.
Certainly, the simplicity of it is appealing. Rather than trying to track various payments, you only need to worry about one. Repayment periods of up to 30 years can bring the monthly cost down a great deal. Yet, don’t forget, the more repayments mean more interest though. You may also lose benefits on your original loans, such as interest discounts or cancellation benefits.
Refinancing may also be an option. There may be a provider out there willing to take your loan at a lower interest rate than you’re currently paying. It never hurts to ask. There are a variety of loan providers out there; you may not be with the best one. So, don’t be afraid to shop around a little bit.
Check whether or not automating your payments is an option for you. Automation often goes hand in hand with a reduction in interest rates and has the bonus of only taking the matter out of your hands. Set up an auto-payment and only leave it alone, but only if it’s at a repayment rate you know you can afford.
Student loan debt can seem like an insurmountable burden. If you’re wondering how to lower your Navient student loan payment, it can feel as though there’s no way out. Nonetheless, it’s important to remember there are many options available, not just for Navient, but all student loan servicers.
You’re not alone in this, and there’s a lot you can do to take control. The main thing is to plan ahead and do your research. There are a lot of plans out there, and all have their benefits and drawbacks. Sit down and work out what’s right for you. If you’re looking for other options, you may want to check out Nelnet student loans as well.
If you want to give this company a shot, review all the terms and conditions before signing up for a plan. Here’s the Navient student loan login page to get you started on how to lower your Navient student loan payment.
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Editor’s Note – This post was originally published in January 2017 and has been updated for quality and relevancy.