What You Need to Know about Navient Loans and the Navient Lawsuits
People take out student loans to make their lives better through education.
The last things they want to think about are scams and illegal behavior affecting their loans and their credit. So Navient complaints may be worrisome.
We are here to explain everything you will need to know about the company Navient and Navient loans. We will:
- Introduce you to the Navient company and explain its history
- List all the services they offer (Navient student loan forgiveness, Navient deferment, etc.)
- Explain all the aspects of the Navient student loan lawsuit
- Show you online Navient reviews
- Help you decide of this Navient scam will affect your Navient student loan choices
With student loan debt now totaling $1.4 trillion, the issue of how that student loan debt is being handled is a real concern for everyone in our country—especially those paying off student loans or applying for new loans.
So read on to understand if a Navient student loan is right for you and what the Navient lawsuits mean for everyone involved.
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Important Student Loan Definitions
In order to fully describe everything in our Navient reviews and to understand the Navient lawsuits, there are a few terms we will describe first.
Navient student loan forgiveness/Navient loan forgiveness: Forgiveness happens when you qualify to have your loan paid off in total; teachers can often take advantage of loan forgiveness if their school qualifies.
Navient deferment: Deferment is when you do not have to repay the principal or the interest of your loan for a temporary time period. This can happen when you are back in college part-time, unable to find full-time employment, in a period of economic hardship, etc.
Navient forbearance: Forbearance is when you do not qualify for deferment, yet your student loan company allows you to stop making payments for up to a year; during this time interest will still accrue.
Navient income-based repayment: To avoid forbearance, you can qualify for income-based repayment that helps make payments affordable for the amount of money you make and your family’s size.
Who Is Navient? The History of Navient Loans
Navient is a large student loan company. It is so large, in fact, that payments on Navient loans for students come from more than 12 million people in the United States totally $300 billion, including many contracts from the Education Department.
Image Source: Navient
Originally, Navient was Sallie Mae, which started in the 1970s for federal student loans. Eventually, Sallie Mae was privatized and also offered private student loans.
Then in 2014, Sallie Mae split. One branch stayed the Sallie Mae Bank and focused on consumer banking. The other branch was renamed Navient and continued to offer Navient student loan services.
The CEO of Navient is Jack Remondi. Remondi had been with Sallie Mae since 1999, left in 2005 for another position, and returned in 2008 as their vice chairman and CFO. He became CEO in 2013.
Navient has received attention and celebration for women’s equality because its board was comprised of more than 50% women.
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What Services Does Navient Offer?
We know that this company offers Navient student loan options, but what do their services look like specifically? These are the three main Navient student loan services:
- Department of Education Loan Servicing
- Private Student Loan Servicing
- Asset Recovery and Collections Services
They offer help to loans to customers, schools, and those in need of professional services.
Through this company’s website you can also find helpful information on:
- How Navient student loan repayment works
- Navient student loan forgiveness for the public
- Navient loan forgiveness/help for teachers and military
- How to postpone Navient student loan payments
- Where to find all Navient loans documents and forms
- Info on Navient deferment/Navient forbearance
The Navient Scam?
To simply look at Navient website, you may only see normal student loan behavior and services: Navient student loan plans, Navient loan forgiveness, Navient deferment, etc.
So why is the New York Times calling Navient’s business practices “the kind of sloppiness and misleading tactics that emerged in the mortgage market in the years after the financial crisis”?
This brings us to questions of a Navient scam on the January 2017 Navient lawsuits. We will breakdown everything you need to know to understand the Navient lawsuits—largely based around Navient income-based repayment issues.
The Navient Lawsuits: Who Is Filing Them?
Before we get into the specifics of each Navient student loan lawsuit, let’s see who is filing each Navient student loan lawsuit.
- Consumer Financial Protection Bureau (CFPB): The CFPB, a government entity, filed an 18-page lawsuit combatting the “unfair, deceptive, and unlawful” behavior
- Lisa Madigan, Illinois Attorney General: Madigan wants all Navient loans with Illinois citizens to be rescinded or reformed
- Bob Ferguson, Washington Attorney General: In addition to his Navient student loan lawsuit, Ferguson is calling for legislation to fix student loan problems
These three are each filing a Navient student loan lawsuit on behalf of the clients who claimed they were ripped off and misled by the practices of Navient, particularly with Navient payment options.
The New York Times describes many of the situations these Navient student loan holders have found themselves in with Navient payment options.
This includes one man who has been in Navient forbearance for more than five years with loans growing higher than $90,000 during that process.
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The Navient Lawsuits: What Are They About?
Now let’s take a look what these three Navient lawsuits are claiming. Here are four allegations from the three lawsuits:
Incentivizing Employees
The lawsuits claim Navient gave incentives to employees, so they would tell the Navient student loan borrowers to delay payment, bringing their loans into Navient forbearance instead of creating a Navient income-based repayment plan.
Claims say that $4 billion in interest has come to the company from this Navient forbearance practice.
Misrepresenting Navient Income-Based Repayment
The lawsuits claim that Navient deceived clients when it came to stipulations and renewals for the Navient income-based repayment plans, options that could help those who are struggling.
Instead of creating these plans Navient income-based repayment, Navient would allegedly keep pushing for Navient forbearance. In fact, around 1.5 million had been enrolled in Navient forbearance for at least two times.
Pioneer Credit Recovery
One of Navient’s subsidiaries is Pioneer Credit Recovery, a debt collection agency. The Navient lawsuits claim was illegally misrepresenting “the federal loan rehabilitation program available to defaulted borrowers.”
Claims say Pioneer Credit did not represent all available Navient payment options.
Navient and Sallie Mae
The lawsuits claim that Navient, along with its former “parent company” Sallie Mae, was offering high interest rate, subprime Navient student loan options that were both too expensive and too risky.
Cosigners
The Navient lawsuits claim cosigners were too broadly defined, suggesting that only few cosigners were truly qualified.
The Navient Lawsuits: What Do They Want from Navient?
We know what the Navient complaints are about, but what does each of the three Navient lawsuits hope to see change?
Image Source: Pixabay
According to The Washington Post, “The CFPB and the state attorneys general are all seeking financial redress for borrowers they say were harmed by Navient’s actions.”
They also want the Navient student loan practices to change in general.
It is assumed that these proceedings could take years, unless Navient settles.
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The Navient Lawsuits: How Has Navient Responded?
Navient is responding to the Navient student loan lawsuit by saying they plan to defend themselves against what they call “false allegations.” The company said about the Navient lawsuits:
“The timing of this lawsuit—midnight action filed on the eve of a new administration—reflects their political motivations… We cannot and will not accept agenda-driven ultimatums designed to get headlines rather than help for student borrowers. We will vigorously defend against these false allegations and continue to help our customers achieve financial success.”
Outside of standing by their company against the Navient student loan lawsuit, the Navient loans website has an entire section dedicated to the company’s “transparency in policy engagement and political participation.” This includes information on:
- State and federal engagement
- Federal lobbying
- Political contributions
- State contributions
- Trade associations
- Other political activity
- Employee engagement
The Navient loans websites also highlights the company’s philanthropic efforts as well as awards and recognitions.
The Navient Lawsuits: Has Navient Been Here Before?
These Navient lawsuits are not the first time Navient has been under investigation by government officials. The first time, the Navient complaints were in regard to our military.
In 2015, more than 77,000 military service members were to receive $60 million in financial compensation because they were charged excess interest on their Navient loans for students.
This settlement decision came after the first Navient student loan lawsuit from the federal government, saying Navient violated the rights of military service members under the Service Members Civil Relief Act (SCRA).
Navient student loan options for service people had not been abiding by the 6% cap on interest rates for Navient loans they received before their service.
Outside of the compensation from these Navient complaints, Navient had to:
- Pay a civil penalty of $55,000 to the United States
- Request deletion of negative credit histories from all credit bureaus for all incidents caused by Navient’s overcharges and defaults
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What About Navient Reviews Online?
As we delve further into this potential Navient scam, it is important to step outside the Navient lawsuits and see how the company is viewed elsewhere through Navient reviews online.
- On Consumer Affairs, Navient receives 1 out of 5 stars.
- The Better Business Bureau (BBB) has 1,883 complaints and 3.68 out of 5 stars for Navient reviews. However, the BBB itself gives Navient an A+ rating.
- On Credit Karma, Navient loans receive 2.7 out of 5 stars.
As you can see, the overall Navient reviews are not necessarily favorable to the company, with the exception of the high rating from the Better Business Bureau.
Is This Navient Scam a Real Problem?
To determine whether these Navient complaints and Navient lawsuits will stand is a matter of waiting for the proceedings.
At this moment, we only have the information from those saying Navient student loan practices are misleading and from Navient defending its organization.
To determine whether this is a Navient scam at this time is difficult. However, there are enough negative Navient reviews that anybody should move forward with a Navient student loan with caution.
Conclusion: Navient Loans and You
Now that you have all the basic information you need to know about Navient loans, the Navient lawsuits, Navient complaints, Navient-income based repayment, and Navient forbearance.
You will have to take the information into consideration before you choose whether to get a Navient student loan to help fund your education.
If you already have a loan or multiple loans from Navient, you are aware of Navient forbearance and Navient income-based repayment. Be sure to consult a legal professional with any other questions.
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