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Student Loan Servicers in Trouble: Navient May Experience Greater Leniency Than Expected

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Paying back student loans is stressful enough on its own without having to worry about loan servicer challenges too; however, it turns out that added difficulty is exactly what Navient heaped on borrowers of all ages with misdeeds such as:

  • Misallocation of payments.
  • Erroneous credit reporting for borrowers with debts already forgiven (made worse by the fact that many of these borrowers were disabled).
  • Poor advising regarding repayment plans, leading borrowers into paying more than they should have.

Sued by both the Justice Department (Navient was forced to pay out over $60 million in damages) and more recently the Consumer Financial Protection Bureau (CFPB), Navient administrators have said that they will fight, and that their massive legal plight is due to current politics (see more background on this topic in our previous blog about Navient).

Now, recent news points out that a large settlement being negotiated by the CFPB and Navient seems to have broken down, with some pointing to new leniency by the CFPB on the student loan servicer (along with under industries that may have been under greater fire previously). Keeping the pressure on, however, several more states are suing Navient—and two of those just filed recently.

“There is growing concern among myself and state attorneys general that the federal government is not only losing interest in holding student loan servicers like Navient accountable, but that the federal government is actively looking for ways to shut down state enforcement actions against Navient and other student loan servicers,” said Jim Hood, the Mississippi attorney general, who sued Navient in July. “The timing of filing our lawsuit reflects that concern.”

Despite the previous payout, Navient still refuses to take accountability for misconduct, stating instead all that they have done to help borrowers in terms of repayment. With current lawsuits pending, they may still have to pay out billions and make changes to their servicing techniques; along with that, other servicers could be affected too in their practices.

“These problems are not just limited to Navient; these are practices we have seen at many different servicers,” said Persis Yu, the director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “It’s critical to finally have a federal agency acknowledge the problems and hold a company accountable for them.”

Have you experienced problems with your loan service provider, or are you in danger of defaulting on your student loan? Contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you.

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at info@debtorprotectors.com.

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