Student Loan Borrowers, Parents, Co-signers and Disabled Veterans… Rejoice. Help coming!
$300 BILLION, in six million accounts with 12 million borrowers manipulated. Consumers cheated. Finally, after years of deceit the collector sued on behalf of consumers. The travesty of Student Loan debt collector abuse is surfacing – becoming more transparent.
A former part of Sallie Mae, Navient, has been taking advantage of Student Loan borrowers for years. According to the lawsuit filed by the Consumer Finance Protection Bureau (CFPB), Navient deceived and cheated borrowers. Students, parents, grandparents who cosigned for loans and disabled borrowers including injured veterans have been boons-waggled and exploited into paying more, having their credit harmed, and being forced into delinquency and default.
Student Loan debt repayment plans are complicated and Navient, the largest Student Loan company in America has all the information. As managers of the loans they have the ability and duty to inform consumers of their rights under law. But, they didn’t!
They know that there are two kinds of Student Loan debt: Federal and Private. And, they know the different repayment plan rules and regulations connected with both types of loans. The hardship and trepidation they caused is outrageous. Why did they do it? Laziness on part of employees and managers; and make more money. Greed!
Here are a couple examples:
Struggling borrower: If a borrower loses a job or runs into substantial financial distress it is possible to apply for a repayment plan based on the student’s amount of income – an Income-driven Repayment Plan. This plan allows the student to make payments based on income. There is much paperwork including tax returns, family size, financial forms and data that is required every year according to specific deadlines set forth by law. While the student is making monthly payments according to this Income-driven Repayment Plan the interest charges are not added to the debt. And, the student is not delinquent or in default; events that carry sizable interest, costs and fees penalties garnered by the collector.
Not only did Navient steer consumers away from applying for this Income-driven plan, they pointed borrowers to “forbearance” plans that allow a student to take a short break from making payments. But, the interest continues! In approximately five (5) years, the collector added about $4 billion in interest charges. This additional interest is added to the principal of the debt, “capitalization”. The student borrowers were not told about their options or that their debt could increase exponentially.
Disabled veteran borrower: A disabled person has the right to seek loan forgiveness under the federal Total and Permanent Disability discharge program. Navient’s subsidiary Pioneer Credit Recovery lied to the credit reporting companies. They told the credit companies that the disabled had defaulted, which wrecked their credit. Then, they lied about that too by claiming that the adverse information about the defaulted loan would be erased.
And, there is so much more. Student loan borrowers can get information and submit a complaint to http://www.consumerfinance.gov/students.