Navient

We are currently representing student loan borrowers with complaints about Navient, the third largest student loan servicer in the United States.

One complaint is that Navient steered borrowers toward forbearances instead of income-based repayment plans, which are generally more beneficial and less costly for the borower.

A 2017 audit of Navient by the U.S. Department of Education reviewed about 2,400 calls between Navient and borrowers from 2014 to 2017. In about 10% of the calls, the Navient representative did not offer the borrower all of the options they could have offered, mainly income-based repayment options. These representatives did not ask questions to find out if the borrower would have benefited from such a plan, according to the audit.

A lawsuit against Navient by the Consumer Financial Protection Bureau is pending. The CFPB alleged that the failure to offer income based repayment plans was deceptive, and that between 2010 and 2015, Navient added about $4 billion in interest to those borrowers’ loans through use of forbearance for persons qualifying for income based repayment.

When loans are in forbearance, they still accumulate interest. Forbearance is therefore more costly to the borrower in the long term. In its lawsuit, the CFPB alleged that Navient’s compensation policies for customer service representatives incentivize this practice. Navient compensates representatives for lowering the average call time. Employees know that lengthy conversations, as ones about someone’s full financial picture tend to be, would be financially detrimental to them.

Navient claimed that it is no worse than other student loan servicers and, according to the Associated Press, "We (are not) aware of any requirement that borrowers receive all of their repayment options … on each and every call”.

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