If you have federal student loans, there’s a strong possibility that Navient is your loan servicer. Navient is one of the primary agencies that service loans for the U.S. Department of Education. If Navient services your federal student loans, you should be aware of the present and ongoing Navient lawsuits.
Who is Navient?
- Navient is the largest student loan servicer in the nation.
- As a federal loan servicer, Navient is responsible for managing federal student loan accounts, processing monthly loan payments, and communicating with borrowers.
- Navient was formerly part of Sallie Mae.
What are the Active Navient Lawsuits?
There are currently several lawsuits against Navient, with the most significant being launched by the Consumer Financial Protection Bureau (CFPB) in 2017.
Each Navient lawsuit is seeking compensation for student borrowers who were harmed by Navient. In some cases, the parties are also suing for changes within Navient and other student loan servicers.
Why is Navient Being Sued?
The lawsuits against Navient are being pursued by different parties, but most of the claims are similar. To summarize, Navient has been accused of mishandling student loans and student borrowers in multiple ways, including:
- Mishandling payments by applying them incorrectly;
- Suggesting options that go against borrowers’ best interests;
- Making the repayment process more difficult for borrowers;
- Obscuring the process to remain enrolled in beneficial programs such as Income-Driven Repayment; and more.
The charges against Navient are serious because they violate the company’s contract with the U.S. Department of Education.
As a federal student loan servicer, Navient is entrusted with acting as a middle man between borrowers and their federal disbursements. Servicers for federal student loans are tasked with distributing loan amounts, accepting payments, and communicating responsibly with borrowers.
If the charges against Navient are found valid by the Courts, Navient could be required to issue repayments to borrowers whose loans they serviced.
The lawsuits against Navient are pending, and they could take years to reach a resolution. In the meantime, you may be wondering about the details of the Navient lawsuits, and what you should do while you wait for them to reach a conclusion.
In this guide, we’ll go over the most important legal actions against Navient, from most recent to least.
CFPB Navient Lawsuit (2017)
The CFPB claims the following:
- Navient guided borrowers towards costly forbearance options instead of more affordable repayment plans.
- Navient processed loan payments incorrectly.
- Navient reported the status of disabled borrowers’ loans incorrectly.
- Navient misled borrowers about how to release loan cosigners.
- Navient has violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act.
The Consumer Financial Protection Bureau (CFPB) was the first to launch a lawsuit against Navient, back in January of 2017.
According to the governing agency, Navient “systematically and illegally failed borrowers at every stage of repayment.”
The Bureau also includes allegations against Navient’s subsidiary, Pioneer, for providing false information that would ultimately lead customers to damage their credit scores.
The lawsuit brought by the CFPB seeks restitution for consumers who were harmed by this alleged conduct. It also seeks to enact changes within the student loan process and to enforce consumer protections more effectively in the future.
Navient Lawsuit by the American Federation of Teachers (2018)
The parties suing Navient claim that:
- Navient broke its federal contract by ignoring borrowers’ best interests.
- Navient purposefully misled public service employees; it recommended programs and types of forbearance that would disqualify them from PSLF.
- Navient worked strategically to prevent borrowers from moving their loans to FedLoan, a competing loan servicer which is the exclusive administer of PSLF.
In October of 2018, nine teachers, supported by the American Federation of Teachers, filed a class-action lawsuit against Navient.
The complaint claims that Navient knowingly misled borrowers who were eligible for PSLF, ultimately preventing them from accessing the program.
PSLF (Public Service Loan Forgiveness) is a federal program that helps public service professionals pay less on their student loans. After ten years of qualifying work (and 120 qualified monthly payments), public service employees are eligible for forgiveness of the remaining balance on their federal student loans.
The PSLF program is serviced exclusively by FedLoan—Navient’s competitor in the loan servicing arena. The 2018 class-action complaint alleges that Navient systematically misled borrowers into programs and types of forbearance that would make them ineligible for PSLF.
It claims that Navient misinformed these borrowers to prevent them from transferring their loans to FedLoan, in an attempt to avoid losing the associated servicing fees for those federal loans.
As a result, the class-action lawsuit claims, the affected teachers and public servants are paying millions more than they otherwise would have on their student loans.
The lawsuit alleges that in this and other actions, Navient went against its borrowers’ best interests, which is in violation of the company’s contract with the federal government.
State Navient Lawsuits (2017 and 2018)
- See CFPB lawsuit claims below.
Five U.S. states have independently pursued lawsuits against Navient.
You may wonder why states are suing Navient, when the servicer is contracted with the federal government.
While the U.S. Department of Education contracts with loan servicers like Navient, consumer advocates and state legislators believe the agency isn’t adequately protecting borrowers.
The attorneys general for the states listed above are among those advocates who believe the U.S. Department of Education could be doing more.
The claims brought by the attorneys general of these five states echo those brought by the Consumer Financial Protection Bureau (see below).
How Do the Navient Lawsuits Affect You?
If Navient is your federal loan servicer, you may rightly be concerned about how these lawsuits could affect you.
Until the lawsuits come to a close, your loans won’t be changed or affected in any way. But while the Navient lawsuits are still ongoing, there are some steps you can take.
What You Can Do if Navient is Your Loan Servicer
If you’re not sure who your servicer is for your federal student loans, you can visit the National Student Loan Data System (NLDS) to find out.
If Navient is your loan servicer, use the following tips to make sure you’re protected:
- Keep Paying Your Loans
One thing you don’t want to do while you’re waiting to see how the Navient lawsuits pan out is stop making payments on your student loans.
Loan payments are still due while Navient goes through the process of defending itself in the courts, and missing payments will impact your ability to qualify for programs like PSLF and IDR plans.
If the Navient lawsuits come to a resolution that affects you as a borrower, you will receive a notice in the mail at a later date with instructions on how to receive compensation.
- Conduct Independent Research
Your loan servicer is supposed to help you choose the repayment programs and strategies that will best benefit you. But it’s always best to conduct your own independent research, too.
Make sure you’re well-informed about your options when it comes to PSLF, loan consolidation, IDR plans, loan forgiveness, and other federal programs.
- Keep an Eye on Student Loan Regulations
Navient isn’t the only student loan servicer who has faced lawsuits in recent years, but it is the largest. Navient services more than 12 million borrowers’ loans, totaling about $300 billion.
The U.S. Department of Education itself is facing repercussions for potentially-unsavory practices concerning student loans. More than150,000 former students filed a suit against Education Secretary, Betsy DeVos, in June of 2019, claiming the Department has failed to implement a regulation known as Borrower Defense.
The legal actions taking place in the realm of student loans are set to impact regulations in the future. Whether your loans are serviced by Navient or another agency, it’s a good idea to keep your finger on the pulse of student loan reform.
- Stay Organized and Communicate
One of the best ways to protect yourself in any business matter is staying organized. Keep a record of your student loan payments and any correspondence with your loan servicer.
When communicating with your student loan servicer, it’s best to do so in writing so that you have an accurate record.
- File a Complaint
Whether you’re covered by one of the existing class-action lawsuits against Navient or not, you can file a complaint against the company if you’ve been affected negatively.
Filing a consumer complaint with the Consumer Finance Protection Bureau, the U.S. Department of Education, or with your state’s attorney general office can help provide valuable information for the ongoing lawsuits.
Can I Switch Student Loan Servicers?
Switching student loan servicers is possible through private loan refinancing or federal loan consolidation. But there are potential risks involved with both refinancing and consolidation, and you shouldn’t go through the process with the sole purpose of switching loan servicers.
Additionally, there is no guarantee that switching loan servicers will leave you with a loan company that you like better. Many loan servicers are being scrutinized for unsavory practices, and you may end up with one that is just as bad, or worse, than the one you have now.
Your best bet is to inform yourself on how to best handle your student loans, and only refinance or consolidate if it is in your best interest to do so.
How Do I Sign Up for the Navient Class-Action Lawsuit?
If a class-action lawsuit settles, those affected will receive a notice by mail. You don’t need to do anything to be included in the action.
If you’re identified as a class member (someone who was affected by Navient in the manner described by the lawsuit), the notice you receive will include instructions on how to claim your part of the settlement.
The lawsuits against Navient are not class-action cases you can sign up for or participate indirectly. However, you feel that you’ve been negatively affected by Navient’s practices, you can file a complaint as described above, which will help inform the prosecution going forward in the case.
What Will Happen as a Result of the Navient Lawsuit?
The legalese and in-depth analysis of class-action lawsuits can be challenging to follow. What many consumers are most interested to know is: what happens if the suit is successful?
The Consumer Financial Protection Bureau seeks to hold Navient accountable for “appropriate restitution” to borrowers it has harmed. If the lawsuit brought against Navient is successful, consumers who worked with Navient could see some monetary compensation. The lawsuit also seeks to require Navient to institute appropriate and legal processes.
Smaller Navient Lawsuits
Described above are the main lawsuits being pursued against Navient. But several smaller lawsuits are being pursued in the courts, as well.
These smaller class-actions are typically opened and closed more frequently. If you want to check and see whether a class-action lawsuit against Navient applies to you, search “Navient” on classaction.org. This will provide you with a list of open and settled cases, as well as investigations into the Navient lawsuits.
Navient Student Loan Forgiveness
It’s important to note that there is no such thing as “Navient student loan forgiveness.” There is no form of loan forgiveness that is unique to Navient-serviced loans.
If you have Navient-serviced federal student loans, you can take advantage of federal forgiveness programs. To earn more, review the forgiveness options for Navient loans.
Stay Updated on the Navient Lawsuits
The Navient lawsuits are moving slowly through the courts, and in 2019, the cases haven’t made much progress. Until they reach a conclusion, the best thing you can do as a student loan borrower is stay informed about the cases and about your student loan options.
No matter who your loan servicer is for your federal student loans, the best thing you can do is educate yourself about programs like PSLF, IDR, and other legitimate loan forgiveness programs to make sure you’re able to pursue the best options.
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College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.