Navient Student Loan Servicer Review
Navient Corporation is a student loan servicer and collector. Its parent company, Sallie Mae, was created in 1973, and was originally called the Student Loan Marketing Association.
Just so you don’t ask yourself this question for the remainder of this article, servicing student loans means taking care of the billing, support, payments, and collections for the loans. Servicers don’t originate new loans, but instead manage loans once they are in the repayment phase.
Sallie Mae was set up by the United States Congress as a private financial institution. Its original purpose was to support what was then called the guaranteed student loan program, which was created by the Higher Education Act of 1965. In 1994, Sallie Mae became a corporation.
Over time, Sallie Mae started taking care of much more than just student loan servicing. They began offering special savings plans for parents to save up for their children’s college educations. They also started offering savings accounts, CDs, checking accounts, credit cards, and insurance.
In 2014, Sallie Mae split its loan servicing from the rest of the company. Navient was formed, and since then, has been handling the servicing on millions of federal student loans.
Not only did Navient take over Sallie Mae’s federal student loan portfolio. The company also services a very large portfolio of private student loans.
What Does Navient Offer to Borrowers?
Since Navient is a servicer, the company doesn’t offer any loans themselves. However, it can be a big help in navigating repayment of your current student loans.
First off, if Navient is your student loan servicer, you need to check out its website. It offers tons of resources and information. Not only does it define all the terms in your current loan contract, it also offers repayment estimators, great customer service, and a user friendly customer account interface.
If you have any questions about repaying your loans and what kinds of repayment plans are available to you, Navient has a comprehensive section that explains all of your options.
Navient also tries to be crystal clear on your loan allocation, or what parts of your loans are getting paid down. Generally, there’s three parts to your loans: (1) fees, (2) interest, and (3) principle. As a rule of thumb, your monthly payments are applied first to any fees you may have incurred, then to interest, and finally to your actual loan principle.
Different kinds of loans have different ways of applying your payments. Navient has explanations for each of them, whether it’s for a federal or private loan.
Navient also has great explanations of how your loan interest is calculated, and how interest works with your particular loan. They also explain when your student loans begin accruing interest, and how you can receive tax benefits by paying interest on your loans. In addition to explaining the tax implications, Navient also provides the relevant tax forms.
If you are having a tough time making payments, or you know you will be having a tough time in the near future, Navient can help you understand the numerous way you might get some kind of relief. The company gives you a number to call if this is your situation, and also gives you all the resources your loan company has to offer.
Navient also has a portion of its website dedicated to students serving in the Military. It has a bunch of programs to help out servicemembers, and any forms you might need.
Class Action Lawsuit Against Navient
While Navient has a lot of resources and great information for current borrowers, if it is servicing your private student loans, there’s a chance you’ve been charged a big fee if you’ve made a late payment.
Navient was sued in August of 2015. The class action law suit, filed in California, alleges that Navient was charging some of its borrowers over 10 percent each year. Apparently this violates California Usury Laws, which don’t allow these loan servicers to charge over 10 percent interest. In some cases, Navient was charging over 18 percent on its loans.
The lawsuit also alleges that Navient charges a late fee of 5 percent for each missed payment on private loans. This 5 percent is equal to an annual interest rate of a whopping 120 percent. On top of the late fee, Navient continued to charge regular interest on the late payments, effectively forcing the borrowers to pay twice for a single late payment.
While this class action only involves private student loans that were taken out before 2006, it sheds casts some serious doubt on Navient’s operating practices.
Other Complaints Against Navient
Navient also has a history of overcharging military service members. They were fined $97 million for unlawfully charging active-duty service members high interest rates and late fees on its student loans.
Under the Servicemembers Civil Relief Act, active service members are entitled so federally backed legal and financial protections when it comes to their student loans.
However, when some active duty soldiers fell behind on their loans, even though Navient know they were in the military, some were hit with over $500 in excess interest, while others’ claims were denied altogether.
Navient even pursued legal action against some service members, and didn’t document their military service, which is a violation of the law. Navient claimed that the issues with the more than 60,000 affected service members were a result of poor procedures and lack of training.
What that really meant was service members were forced to submit a very large amount of forms to establish their eligibility as active military. This was completely unnecessary, since all that was required was a quick check in the Defense Department database.
Navient has remedied the situation, including urging credit bureaus to remove any black marks related to student loan debt on military members credit reports. They have also streamlined its process to verify a service member’s status in the military.
Navient has also cleaned up some of its more aggressive collections practices.
If you have a loan serviced by Navient, you need to be aware of their past transgressions. However, if there’s anything to learn it’s that you need to read what you’re signing. You also need to take potential late payments head on. Don’t sign anything you don’t understand, or that wasn’t included in your initial loan statements.
Navient has come a long way, and while it can always get better, staying in business is a pretty big priority for the company. It has changed quite a bit, and will continue to get better, as long as people speak up when something seems amiss.