T he Consumer Financial Protection Bureau (CFPB), a federal regulatory agency tasked with protecting consumer rights in the financial sector, brought a lawsuit against Navient, formerly part of Sallie Mae. The student loan servicer is the largest in the country, managing more than 12 million student loan accounts and $300 billion in federal and private loans. The lawsuit comes after a multi-year investigation of Navient’s practices in servicing student loans sparked from thousands of consumer complaints.

The CFPB alleges the student loan behemoth violated student loan borrower rights by:

  • Deterring borrowers from gaining access to income-based repayment programs and, instead, pushing them into costly forbearance
  • Failing to provide timely renewal information for borrowers in income-based repayment programs
  • Erroneously reporting delinquency or default for borrowers who were deemed totally and permanently disabled, including some veterans
  • Failing to accurately process federal and private student loan payments to reduce the principal

In the lawsuit, Navient’s debt collection arm, Pioneer, was also cited for violating consumer rights by misleading borrowers about the long-term effects of rehabilitation programs to remedy default. The combination of these violations steered borrowers in the wrong direction regarding repayment options for their student loans and in some cases, lined the pockets of Navient shareholders to the detriment of student loan borrowers.

Individuals who have Navient as a student loan servicer may feel like they are stuck between a rock and a hard place. Servicing companies are assigned at the time loans are disbursed or enter into repayment, and, for better or worse, they cannot be changed unless a borrower refinances debt into a private student loan. However, those who use Navient to manage student loans can take steps to protect their rights under the law.

Navient is the largest loan servicer in the country, managing more than 12 million student loan accounts totaling $300 billion+ in federal and private loans.

First, Know Your Rights!

Student loan borrowers carry some responsibilities when federal or private student loan debt is taken on, not the least of which is on-time repayment. However, several protections are extended to borrowers under a variety of federal acts, including the ability to request a change of a repayment plan should financial circumstances change. Most student loan borrowers are eligible for an income-based repayment program under federal law, and servicers are required to provide information regarding those plans when requested. The same goes for forbearance and other deferments based on financial hardship.

In addition to repayment plan options, student loan borrowers also have the right to fair credit reporting. This means that student loan servicers have a responsibility to provide accurate details about repayment, deferment, forbearance, and other loan details to the credit reporting agencies. Should erroneous information be provided, borrowers have the right to dispute the entry until it is corrected.

Work toward a Remedy

If a borrower feels they have been treated unfairly by Navient or another loan servicer and no headway is made by contacting the servicer itself, there are several ways in which a formal complaint can be made. The U.S. Department of Education and the Consumer Financial Protection Bureau both offer complaint guidelines on their respective websites, and they can work toward finding a solution or holding the servicer responsible. The Federal Trade Commission and state legislative office may also take complaints when no progress is made through direct contact with the servicer.

Student loans are a reality for millions of borrowers throughout the country, and making timely payments on that debt is a necessary part of maintaining a sound financial footing. However, the violations Navient is alleged to commit against student loan borrowers creates a landscape where responsible repayment of debt is an uphill battle. If Navient is your student loan servicer, take the first step toward protecting yourself by understanding your rights are as a consumer – and don’t be afraid to take Navient to task through other outlets if you’re one of the many wronged.