As a follow up to “What This Navient Lawsuit Means For Your Student Loans” and “What This Navient Lawsuit Means For Your Student Loans: Q&A,” here are some more questions, answers and action steps that you can take to protect your finances and take control of your student loans:
The Navient Lawsuit: Quick Summary
The California lawsuit focuses on federal student loans serviced by Navient and follows action from the Consumer Financial Protection Bureau (CFPB), which also sued Navient in January 2017. The CFPB alleges that, among other allegations, Navient “systematically and illegally [failed] borrowers at every stage of repayment,” including:
- 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 student 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
The CFPB also 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.
Navient has denied the allegations publicly and in court filings.
More Questions & Answers
1. Is Navient my student loan servicer?
It’s easy to determine which student loan servicer services your student loans. Here’s how:
- Federal Student Loans: You can find your federal student loans on the Federal Student Aid website. With your FSA ID, you can locate your “Current ED Servicer” by clicking on the blue numbers.
- Private Student Loans: If you have student loans and your student loans do not appear on the Federal Student Aid website, then those student loans are private student loans. You can determine your student loan servicer by logging into your online account or by contacting the company that sends you your student loan bill.
- Not Sure Which Loans You Have: Check your credit report for a full list of your federal and private student loans.
Here is the contact information of the top student loan servicers:
- FedLoan Servicing (1-800-699-2908)
- Great Lakes (1-800-236-4300)
- Navient (1-800-722-1300)
- Nelnet (1-888-486-4722)
- Cornerstone (1-800-663-1662)
- Granite State (1-888-556-0022)
- HESC/Edfinancial (1-855-337-6884)
- MOHELA (1-888-866-4352)
- OSLA Servicing (1-866-264-9762)
- Debt Management & Collections System (1-800-621-3115)
2. Is Navient student loan forgiveness a real thing?
Nope. There’s no much thing as Navient student loan forgiveness.
Student loan forgiveness is offered through the federal government for federal student loans only. Private student loans are not eligible for student loan forgiveness.
Student loan forgiveness can take anywhere from 10-25 years depending if you choose public service loan forgiveness or an income-driven repayment plan as REPAYE. With income-driven repayment plans, you are responsible for income taxes on the amount you receive in student loan forgiveness.
3. Can I choose my student loan servicer?
No. Your student loan servicer is assigned to you.
If you have a federal loan, the U.S. Department of Education will assign you a student loan servicer after your student loan is disbursed. Similarly, if you have a private student loan, your lender will assign a student loan servicer.
4. Can I change my student loan servicer?
It’s one of the top questions that we receive at Make Lemonade. Generally, you cannot change your student loan servicer.
However, you should expect that your student loan servicer will change at least once during the course of your student loan repayment. Why? The U.S. Department of Education may transfer your federal student loan to a new student loan servicer to ensure that you have proper customer service and repayment support.
One way that you can change your student loan servicer is through student loan consolidation. However, there is no guarantee that after your select a student loan servicer that your student loan will not be transferred to another student loan servicer.
The other way that you can change your student loan servicer is through student loan refinancing. When you refinance student loans, you receive a new student loan, a new student loan servicer and new monthly payment. Most importantly, you receive a lower interest rate, which can save you money.
With student loan refinancing, the good news is that many customer-focused lenders now service their own student loans.
5. What happens if the Navient lawsuit is “successful?” Do I get compensated?
The lawsuit against Navient was filed by the Consumer Financial Protection Bureau (CFPB), which is a federal government agency.
Subsequent lawsuits have been filed at the state level, including by attorneys general in California, Illinois, Pennsylvania and Washington.
Since these lawsuits are not private, civil litigation matters, you probably should not expect any compensation at this juncture if your student loans are serviced by Navient.
6. Can you please explain the difference between consolidating student loans and refinancing student loans?
The difference between student loan consolidation and student loan refinancing can be tricky, but making the right choice can potentially save you thousands of dollars.
Student Loan Consolidation: Student loan consolidation is through the federal government for federal student loans only. However, your interest rate will not decrease, and instead will be equal to a weighted average of the interest rates on your federal student loans. If you plan to seek public service loan forgiveness, an income-driven repayment plan or forbearance, you may want to consider a Direct Consolidation Loan.
Student Loan Refinancing: Student loan refinancing is available for your federal student loans, private student loans or both. When you refinance student loans, you can receive a lower interest rate, single monthly payment and single student loan servicer.
If saving money is your primary goal, then student loan refinancing can save you money through a lower interest rate. While you won’t have access to federal repayment plans, many lenders now offer payment plans if you face economic hardship. You can increase your chances of approval for student loan refinance by applying with a qualified co-signer and applying to multiple lenders at once.