Navient Student Loan Lawsuits and Information

How the Navient loans lawsuit could affect you.

When you take out student loans, even federal student loans, you are assigned a loan servicer, which is a company that manages the billing and repayment of your balance.  In 2017, the Consumer Financial Protection Bureau announced it was filing a lawsuit against Navient, the largest loan servicer company in the nation. Read on to learn about the types of student loans that Navient offers and how the Navient lawsuit affects your loan or student loan refinancing.

Navient Lawsuit Allegations

The CFPB lawsuit alleged that Navient duped student loan borrowers in a variety of ways. Aside from ignoring the many complaints by the borrowers, the list of allegations includes:

  • Providing Bad Information: Navient allegedly failed to inform borrowers about repayment options and deadlines for selecting different repayment plans.
  • Incorrectly Processing Payments: The company was supposed to listen to borrowers and apply their payments to the loans that the borrowers directed.
  • Denied Rights to Lower Repayment Options: Federal student loans offer multiple repayment plan options, including income-based repayment, which allows borrowers to repay less when they earn less. However, the CFPB alleges that Navient directed borrowers to rely on forbearance, which allows the borrowers to take a short break from making payments, while the student loan interest rates pile up on those payments.
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As a result, the CFPB alleges that Navient’s actions caused borrowers to overpay on student loans. Subsequently, lawsuits in multiple states — including New York, Washington, Illinois and Pennsylvania — were also filed against Navient.

If you believe you’ve been affected, you can file a complaint through the CFPB website. However, you generally don’t need to do anything to become part of the class action. If Navient is found to have violated any laws and a settlement is awarded, you will be contacted regarding how to file your claim for a portion of that award.

How to Contact Navient About Your Student Loans

If you have loans serviced by Navient, you can reach out to the company with any question you might have. You can log on to your account through the Navient website to contact the company. Alternatively, you can also contact the company by phone:

  • For loans issued by the federal government, call 800-722-1300
  • For FFELP loans and HEAL loans, call 888-272-5543
  • For private loans, call 888-272-5543
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See: 7 Types of Student Loan Forgiveness

Types of Federal Student Loans Offered by Navient

Navient is the largest student loan servicer, responsible for the loans of over 12 million borrowers who owe over $300 billion in student loans, including both federal and private student loans. Here is a list of the types of loans that Navient services:

See Also: How One Woman Paid Off $81,000 in Student Loans While She Was Broke 

William D. Ford Federal (Direct Loan) Program

These are loans made by the U.S. Department of Education to undergraduate and graduate students, as well as their parents through Direct PLUS Loans for parents. These loans can be either subsidized or unsubsidized. Having a subsidized loan means that the federal government pays the interest on your behalf during the time you’re at school.

Unsubsidized loans accrue interest starting from the day the loan is issued, but you can defer making payments during the time you are in school. Direct loans also include consolidation loans.

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The Federal Family Education Loan Program (FFELP)

Until June 30, 2010, the federal government managed student loans through FFELP, including Stafford subsidized and unsubsidized loans, FFELP PLUS loans and FFELP consolidation loans. These loans were issued by private lenders but were insured by guarantee agencies. Even though the FFELP has been discontinued, you might still be paying back loans that were issued under this program.

Health Education Assistance Loan (HEAL) Program

The HEAL program provided loans made by private lenders to graduate students in medical and health-related areas of study until the program was discontinued in 1998.

Federal Perkins Loan Program

Perkins loans are loans made available to undergraduate and graduate students with substantial financial need. The loans are made directly through your school, using federal government funds, and the interest rate is set at 5 percent.

Private Student Loans

These are loans made by private lenders, rather than the federal government. These student loans can vary widely with different interest rates and repayment terms.

Up Next: What Another Fed Rate Hike in 2017 Means for Your Wallet

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About the Author

Michael Keenan

Michael Keenan is a writer based in the Kansas City area, specializing in personal finance, taxation, and business topics. He has been writing since 2009 and has been published by Quicken, TurboTax and The Motley Fool.

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