*I am not a financial advisor, simply providing some 411 for you to make better financial decisions *

Incase you didn’t know there is a Navient lawsuit in the works, and I’m here to spill the tea on what that means for you and your student loans.

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About a year ago there was a whole big clerical error that was rumored to be in the works to cost the student loan companies a whopping 5 billions dollars in student loan forgiveness. Since news broke on this last June, I’ve heard little to any new information about it. But now the student loan industry (and it surely is an industry) has another legal spotlight on it as the Navient Lawsuit comes to the forefront of the news cycle.

But what does this lawsuit mean for your and your loans, and how does it connect back to that 5 billon dollar loan forgiveness rumor? Let’s dive into the information a bit further and figure it out together. (I’ve already figured it out but I want to walk you through the process too boo!)

navient lawsuit

What You Need To Know About The Navient Lawsuit

First and foremost it is not one Navient lawsuit in the works… it’s FIVE! What are they being sued for you might ask? These lawsuits are claiming that the company harmed student loan borrowers through the process of repayment. I don’t anticipate that these suits will reach a conclusion in the near future, and we can anticipate a long drawn out battle between all parties. However there are a few things you need to know specifically and a few things you can/and should do.

Who is suing Navient: Between January- October 2017 California, Pennsylvania, Illinois, and Washington’s attorney generals have all filed suits against Navient as well as the U.S Consumer Financial Protection Bureau. (*coughs* Hey New York how about we get in on the action…)

Why are they being sued: In common basic terms, they are being sued for being sneaky and manipulative. In specific terms they are being sued for misallocation of payments, providing unclear info about re-enrollemnt to their income driven repayment plans. This specific plan changes your monthly payments due to your income and can be as low as $ 0.00 dollars if you are making below a certain amount. So it is no surprise they wouldn’t want you enrolled in this program, because they wouldn’t be able to make as much money off of you. They are also being sued for steering borrowers into forbearance instead of the income driven repayment plan. All of this has also harmed the credit report of their borrowers who are disabled. Particularly many veterans.  So I like I said… sneakiness and manipulation is the name of their game.

How’s it looking: So far… right now… it’s looking like it will end well… however this will take years and will be a drawn out process. However a sign in the right direction is that an August 2017 motion to dismiss the case was denied. They are now in the discovery process. This means that evidence is being gathered against Navient, however during this process more motions for dismissal may arise, a settlement offer, or an actual trial may occur.

What can you do: So… here comes the good and bad news. If the the U.S Consumer Financial Protection Bureau is victorious in their suit there will be compensation for the borrowers. However that compensation will take quite a long time before it ever hits your bank account… and that is only if they win. There is no Navient Student Loan Forgiveness program so don’t be fooled.

If you have Navient as a loan provider (which I do) then you have very limited options. The only way to switch providers is to consolidate or refinance your loans. However I don’t suggest doing that merely to switch providers because you will face other penalties that may be far worse. Instead diligence will be your best friend. If you have federal loans you can still look into loan forgiveness through the federal student loan forgiveness plans provided by the government, despite who your loan provider is. These programs are usually income based or the public service loan forgiveness program. (Both of these will take at least 10 years of on time payments before any of your balance is forgiven)

You can also file complaints, ask about your repayment options, check your credit report regularly (at least 2-3 times a year) for any errors. The best thing to do is to not let them take advantage of you and know your rights as a borrower. That is for any loan provider you have (as most of them are going to be rather sneaky). If you want to file a complaint you can file with your lender, or the U.S. Department of Education, or Consumer Financial Protection Bureau. 

Hey there! I’m Melissa, co-founder of Trials n Tresses, natural hair and beauty lover, binge tv watcher and lover of life. When I am not creating content for TNT, I’m busy teaching the future of society.