January 14, 2022

Navient Lawsuit Settlement: What it Means for Your Student Loans

News

Navient, a servicer of loans, settled six lawsuits from different government entities. These cases began in 2017 and have been long debated in court. The US Consumer Financial Protection Bureau and several other states filed cases against Navient. The company allegedly misappropriated funds and made it difficult for borrowers.

The Allegations

According to the Navient lawsuit, Navient has misallocated many payments as early as January 2010. The accusations also include the following:

  • Lack of clear information that prevented borrowers from accessing income-driven repayment plans
  • Purposefully steered borrowers towards forbearances rather than help them

Navient has denied the claims to be true. According to them, the accusations happened because of recent changes applied retroactively. These were now making them the target of scrutiny. The issues have caused Navient’s contract with the government to expire last 2021, meaning they can no longer handle any federal loans.

The Navient Settlement

The lawsuit was extended because of Navient’s unwillingness and the allegations from the plaintiffs. The court dismissed most allegations because of a lack of proof or detail. However, the lawsuit affected Navient’s reputation and caused them to bleed money. In the end, they agreed to the following terms:

  • Paying $15,000 to ten of the plaintiffs
  • Pay $1.75 million to establish an independent organization. This organization will educate people about the Public Service Loan Forgiveness (PSLF) program.
  • Create a standard template for borrowers who want to learn about public service loan forgiveness.
  • Train and monitor their customer service to ensure they are educating borrowers about PSLF

What Does This Mean?

The lawsuit settlement bodes well for those under Navient student loans. The government will assure they will be doing a better job helping their borrowers. If you’ve dealt with any unresolved problems, this should be the time to talk to them as they are eager to be of a better image to the public.

If you find further resistance, you can file complaints. The CFPB is now responsible for overseeing Navient’s actions moving forward.

If you are uncomfortable with having Navient as your servicer, you can find ways to switch. The most common way would be to refinance a student loan, but it has pros and cons.

Most of their federal loans are moving to other services. It isn’t likely for Direct Loan borrowers to deal with Navient for the foreseeable future.

Always Have a Backup Plan

While Navient is still a service that's informing their borrowers, it does not mean that they are fiduciaries. They are still a company that’s out to make money first. That’s why it’s best to connect with organizations that can help. Whether it’s a lawyer or someone within the Department of Education, their word can go a long way to help you.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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