What the Navient Lawsuit(s) Means For Your Student Loans

This post originally appeared on genprogress.org

Five lawsuits against the country’s largest student loan servicer, Navient, could have an impact on your loans.
CREDIT: Pexels.

BY SENYA MERCHANT | FEBRUARY 15, 2017 AT 5:29 PM

• Updated August 6, 2018 to reflect additional state lawsuits from California and Missouri.

In the aftermath of the Consumer Financial Protection Bureau’s (CFPB) lawsuit against Navient, the largest student loan servicer in the country, we wanted to get in touch with our readers about what this could mean for their own student loans.

“Navient–formerly known as Sallie Mae–allegedly cheated consumers at every stage of the repayment process,” student loan expert Rohit Chopra told Generation Progress. “If you believe you were a victim of shortcuts or deception, you should file a complaint with the Consumer Financial Protection Bureau to get immediate help.”

It’s worth noting that four separate consumer action lawsuits have been filed since the CFPB announced their 2017 lawsuit for borrowers that attempted to pay off their loans earlier by making larger payments than their monthly payment plan required them to. You can read more about whether you qualify for restitution under the Florida consumer class action lawsuit here. If you are in California and would like to file a complaint against Navient with the CA Attorney General’s office, you can do so here.

Read on even if Navient is not your student loan servicer. We think this lawsuit serves as a warning shot to other servicers who may be getting away with the same practices that put financial interests above consumers’ interests.

If Navient is your loan servicer:

1. Compensation for injury is not guaranteed: The CFPB is requesting that the court order Navient to pay restitution to affected borrowers in addition to a financial penalty. But because CFPB is a government agency and this lawsuit is not a class action lawsuit you should not expect redress at this particular point in time.
2. You may be able to fire Navient: For borrowers with older federal student loans (under the FFEL program), you can consolidate your loans into Direct Loans and choose your servicer. You’ll also be able to enroll in more generous income-driven repayment plans and Public Service Loan Forgiveness.
3. You should keep making your monthly payments on time: If you can afford to keep making your monthly payments on normal schedule you should absolutely do so. If you can no longer make your monthly payments, visit studentloans.gov to enroll in an Income-Driven-Repayment (IDR) plan. This can help you even if you are currently unemployed.

You can follow the progress of the CFPB lawsuit here.

If Navient is not your loan servicer:

1. Find out who your lender and servicer are: You can find out who your loan servicer is and get their contact info by logging onto your Federal Student Aid profile with your Federal Student Aid ID. Create an FSA ID if you don’t already have one.
2. Know your rights as a borrower: You can find the full extent of your rights as a student loan borrower here.
3. Understand all of your repayment options: Your loan servicer is supposed to help you navigate the many ways you can successfully repay your student loans but, as history shows us, these companies don’t always have consumers’ best interests in mind. That’s why it’s so important to educate yourself on the many repayment options for your unique financial situation. Find out about student loan refinancing, income-driven repayment, federal student loan consolidationand student loan forgiveness.
4. Additional hot tips:
   1. If you’ve made payment decisions with your loan-servicer over the phone make sure you also confirm any changes in writing.
   2. Enroll in automatic monthly payments, which may reduce your interest rate and also guarantees your loan-servicer is always receiving your payments.
5. File a complaint: If you’ve had a bad experience with your loan servicer or you think it is committing some of the same acts that Navient was sued over, you should file a complaint with:
   1. Consumer Financial Protection Bureau
   2. U.S. Department of Education
   3. Your lender
   4. Your servicer