Consumer Financial Protection Bureau sues nation’s largest student loan company Navient for failing borrowers at every stage of repayment

Consumer Financial Protection Bureau sues nation’s largest student loan company Navient for failing borrowers at every stage of repayment

Navient, Formerly Part of Sallie Mae, Illegally Cheated Borrowers Out of Repayment Rights Through Shortcuts and Deception   WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) is suing the nation’s largest servicer of both federal and private student loans for systematically and illegally failing borrowers at every stage of repayment. For years, Navient, formerly part of Sallie Mae, created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained. Through shortcuts and deception, the company also illegally cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans. The Bureau seeks to recover significant relief for the borrowers harmed by these illegal servicing failures. “For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs,” said CFPB Director Richard Cordray. “Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.” Formerly part of Sallie Mae, Inc., Navient is the largest student loan servicer in the United States. It services the loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the U.S. Department of Education. Altogether, it services more than $300 billion in federal and private student loans. Named in today’s lawsuit are Navient Corporation and two of its subsidiaries. Navient Solutions is a division responsible for loan servicing...
Student Loan Relief Companies Cash in on Confusion

Student Loan Relief Companies Cash in on Confusion

New data show student loan borrowers who pay for help shell out more than $600 on average for federal services they can get for free. They capitalize on confusion. Student debt relief companies collect fees to enroll borrowers in federal consolidation, forgiveness and repayment plans, appealing to millions of student loan borrowers itching to shed their debt. The upfront and monthly charges cost borrowers hundreds or even thousands of dollars — a price tag that becomes infuriating to borrowers who later realize they can sign up for those programs for free through their loan servicers. Debt relief practices are legal in theory; some liken it to paying a tax preparer to do your taxes. But “student debt relief companies can easily cross over into practices that violate key consumer laws,” according to a 2013 report by the National Consumer Law Center. With upfront fees, misrepresentation of federal programs and aggressive advertising tactics, student debt relief companies aren’t curbing borrower confusion, by and large; they’re adding to it. “It’s very difficult to tell the difference between legitimate information providers and for-profit companies,” says Noelle Griffis, a 34-year-old student loan borrower from New York. She reports getting phone calls and direct mail from companies offering loan consolidation and forgiveness and seeing advertisements for such companies on social media. Griffis is one of 6,363 respondents from a July survey by NerdWallet and Student Debt Crisis, a nonprofit higher education advocacy group. The survey asked respondents about their experiences with companies charging for student loan consolidation, forgiveness and other forms of debt relief. The respondents are part of Student Debt Crisis’ email list of around 800,000 people and are...
CFPB REPORT: Bank marketing deals with colleges can mean costly fees and risks for students.

CFPB REPORT: Bank marketing deals with colleges can mean costly fees and risks for students.

CONSUMER FINANCIAL PROTECTION BUREAU FINDS BANK MARKETING DEALS WITH COLLEGES CAN MEAN COSTLY FEES AND RISKS FOR STUDENTS   Bureau Urges Schools and Banks to Put Students Best Financial Interest First   Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB) released a report raising new concerns about costly fees and risky features that can be attached to certain college-sponsored accounts. The Bureau’s analysis of roughly 500 marketing deals between these schools and large banks found that many deals allow for risky features that can lead students to rack up hundreds of dollars in fees per year. The report also examines trends in the school-sponsored credit card market.  The CFPB also issued a bulletin today reminding colleges and universities they are required to publicly disclose marketing agreements with credit card companies.   “Deals between big banks and schools can drive students into accounts that contain high fees,” said Director Richard Cordray. “Today’s report shows that many schools are more focused on their bottom line than their students’ well-being when they agree to sponsor financial accounts. Many young people struggle to manage money while at school and we urge schools to put students’ financial interest first.”   “Colleges across the country continue to make deals with banks to promote products that have high fees, despite the availability of safer and more affordable products,” said CFPB Student Loan Ombudsman Seth Frotman. “Students shouldn’t get stuck with the bill when their school inks a deal for an account that’s not in their best interest. ”   The campus banking report is available at: http://files.consumerfinance.gov/f/documents/201612_cfpb_StudentBankingReport2016.pdf   Around 10 million students attend a college or university that has...
4 Simple Steps for Student Loan Voters

4 Simple Steps for Student Loan Voters

 It’s Time to Get Out The Vote!  Today, Americans will cast their ballots. Will you commit to being a student loan voter? It’s easy – follow these four simple steps and you’ll have everything you need to make your voting plan.    ✔︎ Step 1: Find Your Polling Place. ✔︎ Step 2: Make informed decisions by creating a personalized voter guide. ✔︎ Step 3: Make a voting plan: Are you voting in the morning, afternoon or evening? How are you getting to your polling place? ✔︎ Step 4: VOTE!   Extra Credit: Share your “I Voted” selfie on Twitter, Instagram and/or Facebook using the hashtag #StudentLoanVoter.                 If you experience voter intimidation, have comments and concerns, or have any questions about confusing laws please, call the numbers below:   English: 866-OUR-VOTE Spanish: 888-VE-Y-VOTA Asian Languages: 888-API-VOTE Arabic: 844-418-1682   The SDC Election Survey results are in! We asked our members to tell us how significant a factor student debt plays when casting their vote.   ...
Why college debt should be a prime campaign issue

Why college debt should be a prime campaign issue

 Too many student loan borrowers are being left behind due to breakdowns in the federal programs  College debt, which more than 43 million Americans carry, is among the reasons for widespread economic anger in this vitriolic election year. Many of those who are saddled with this $1.3 trillion albatross are barely moving ahead economically. Congress is doing almost nothing to help them. Many graduates who should be saving for retirement, buying homes and starting families are unable to do so because of the financial anchor of college loans. Most of them should be able to refinance or lower their borrowing burden, but they don’t know about government programs designed to help them. In reviewing more than 5,500 complaints against student loan servicing firms in a recent report, the Consumer Financial Protection Bureau (CFPB) found that borrowers were uninformed on how they could reduce their loan payments and avoid default, which damages their credit ratings. This report offers further evidence that industry practices and needless red tape can turn a student loan into an unbearable burden. Where is the government failing when it comes to student loans? Here are some glaring trouble spots: Communications with borrowers on how they can avoid defaults is awful. “The Department of Education estimates that more than 8 million student loan borrowers have gone at least 12 months without making a required monthly payment and have fallen into default,” the report found…   Continue Reading at CBS...