Navient Allegations
Student loans are a topic most college students do not want to think about or discuss; unfortunately, this is a reality for most. According to Student Loan Hero, 44 million borrowers owe almost $1.3 trillion dollars in student loan debt. Graduates from last year averaged $37,172 in debt, which is a 6 percent increase from the previous year.
As students take out more and more loans, it is very important to understand how it works and what your repayment options are;. However, Navient, the largest student loan servicer in the country, has allegedly made this difficult for borrowers. An important aspect to understand is what a student loan servicer actually is. Forbes describes it as “providing both customer service and repayment support during the life of your student loan.” Navient services more than $300 billion of government and private student loans and has more than 12 million customers. That’s a lot of customers, and if you take student loans out through Concord, you are one of those 12 million.
Forbes states that the Consumer Financial Protection Bureau alleges in its lawsuit that Navient “systematically and illegally [failed] borrowers at every stage of repayment.” They go on to state these allegations include: “created obstacles to repayment by providing bad information; processed payments incorrectly; failed to act when borrowers complained; illegally cheated many struggling borrowers out of their rights to lower payments, which caused them to overpay for their students loans; deceived private student loan borrowers about requirements to release their co-signer from the loan; and harmed the credit of disabled borrowers, including severely injured veterans.”
These are obviously big allegations and could very well apply to anyone who will be paying back loans through Navient if proven to be true. Forbes also goes on to state that the Consumer Financial Protection Bureau alleges that Navient “improperly directed borrowers into forbearance when these borrowers otherwise might have qualified for income-driven repayment plans, and did not adequately keep borrowers in income-driven plans informed of deadlines to maintain their eligibility under such plans.”
The Washington Post elaborates on this in their article. They said, “Among the most serious charges in the Consumer Financial Protection Bureau is an allegation that Navient incentivized employees to encourage borrowers to postpone payments through forbearance, an option in which interest continues to accrue, rather than enroll them in an income-driven repayment plan that would avoid fees.” As a result, Navient accumulated a lot of money in these interest charges. Their article states they amassed $4 billion from borrowers who were enrolled in multiple consecutive forbearances from January 2010 to March 2015.
The Washington Post go on to state that the Consumer Financial Protection Bureau and the state attorneys general are “all seeking financial redress for borrowers they say were harmed by Navient’s actions.”
Navient disputes all allegations. The Washington Post says, “Navient called the bureau’s lawsuit ‘unfounded’ and politically motivated. The company insists the standards the Consumer Financial Protection Bureau are using to reach its conclusions are ‘inconsistent’ with the Education Department’s regulations.”
Hannah Suydam, senior at Concord, is one of those students faced with paying back her student loans when she graduates in May. She states with the recent news of Navient, “It’s frustrating that we are being overcharged in interest rates etc., when it’s hard enough to pay back all the debt we have as [it] is.”
Many college students can relate to this. As a result, she wants to take more precautions when it is time to start paying her loans back. “[I want to] make sure to really keep track of how much I’ve paid and how much I still owe each month. [It’s] easier to catch changes in price or whatever that way,” Suydam states.
Unfortunately, some students are not aware that this lawsuit is happening. It is important for anyone who has taken out loans to understand the situation and realize the implications of this in the future. Suydam states, “I believe it’s a part of their [Concord’s] responsibility to help us be aware of these things to make sure we are the most successful we can be.”
As a result of this being brought forward to the public, it should make students aware of what will happen with their finances in their future. It’s never a bad idea to keep a close eye on your finances.
Concord University’s Financial Aid has no information at this time; however, if more clarification or insight is provided it will be included in the next edition.
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