I’m not a financial advisor, just helping spread some knowledge. All thoughts and opinions are my own.
It looks like we’ve got another student loan servicer under legal attack and I for one could not be happier. This time around I’m spilling all the tea on the FedLoan Servicing Lawsuit and how it is going to affect your loan forgiveness opportunities.
What You Should Know About The FedLoan Servicing Lawsuit
What is FedLoan Servicing: FedLoan Servicing (aka Sallie Mae) is one of the largest federal student loan services in the country. They also are in charge of keeping track of the PSLF program (public service loan forgiveness).
Who Is Suing Them: FedLoan Servicing is being sued by the Massachusetts State Attorney General as of August 2017. The Attorney General initiated the lawsuit citing that the financial futures of public servants across the country have been jeopardized.
Why Are They Being Sued: They are being sued for very similar reasons as the Navient lawsuit. Essentially because they have been mismanaging the debts of everyone enrolled in the Public Service Loan Forgiveness Program. They also have been mismanaging the debts of people enrolled in the TEACH Grant Teacher Loan Forgiveness Program. The gross amount of neglect, mismanagement, and illegal behavior has put a direct spotlight on FedLoan Servicing as well as their other loan managing counterparts.
Many people have fallen victim to the the criminal activity of FedLoan Servicing. Monthly student loan payments have been miscounted, and an immense amount of poor advice offered.
How Does It Affect You: Currently everything is still “hearsay” but the lawsuit is gaining some traction. Because the FedLoan servicing company mismanages the PSLF Program, this has set many many people behind in their loan forgiveness journeys as well as cost them more money than what they have borrowed. The annual certification process was screwed up so badly that it became impossible for people to keep track or keep records of their payments for the program.
The PSLF program came about in 2007 and was set to have it’s first set of forgiveness recipients at the end of 2017. Unfortunately out of the 900K that were eligible less than 200 actually received some sort of forgiveness.
This means that if this FedLoan servicing loses this lawsuit, there will hopefully be some type of reform that will improve the PSLF program for those who are eligible to receive it. This means a greater chance/ opportunity for you to receive student loan forgiveness.
So Now What: So… the lawsuit hasn’t reached a settlement as of yet, and like with most of these things it will take time before we see any real solutions. It will take time before anything is resolved, so it won’t be trickling down to us as of yet. The good thing is that every time these law suits are brought up to being dismissed, they are denied. So the government isn’t going to roll over and let these things slide. We just have to be patient!
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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.