Navient Student Loan Relief: What it Means for You

Image by Dylan Gillis available via Unsplash

Due to the coronavirus pandemic of 2020, the federal government is suspending monthly student loan payments and freezing interest accruals until Sept. 30, 2020, under its CARES Act.

Navient, one of the largest federal student loan servicers, recently notified millions of borrowers that their balances will be frozen automatically, with no financial penalties. But not all borrowers and loans are eligible for relief, and some borrowers have received unexpected charges and phone calls from Navient about missed payments.

Here’s what you need to know to determine if your loans are eligible and how to get a refund or compensation from Navient.

Which loans qualify?

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To be eligible, your Navient student loans must be owned by the U.S. Department of Education. The federal relief does not extend to the nine million private sector and Federal Family Education Loan Program (FFELP) borrowers, which primarily include people who took out loans prior to 2010.

This has caused confusion among borrowers who weren’t expecting to pay interest on their FFELP loans with “Federal” in the title.

If your FFELP loan is owned by Navient, it will not receive the 0% interest rate. However, if the government owns your FFELP loan, you are eligible.

You can confirm if your loans received the 0% interest rate by logging into your Navient account and going to your Loan Details.

Federal Family Education Loan Program (FFELP) borrowers can also request three months of administrative forbearance from Navient, but read our Summary of the Student Loan Industry first to understand why this may not be your best option.

What do I need to do?

While the CARES Act states that automatic payments should be suspended, borrowers have taken to social media to complain about harassing phone calls, emails, and unexpected charges from Navient.

To confirm your scheduled payment status and avoid unexpected charges, log into your Navient account and confirm your loan type. If your loans are owned by the Department of Education, your automatic payments should already be suspended. If your Navient loans say Federal Family Education Loan Program or FFELP, you will still be responsible for meeting payment obligations during the COVID-19 shutdown.

If your loan payment was processed on or after March 13, you can request a refund by emailing Navient at socialmedia@navient.com or calling (888) 272-5543. However, one customer reported that Navient will take 4-6 weeks to return their payments.

If contacting Navient customer service fails, you can start a legal claim in under 10 minutes using the form below.

What if Navient made a mistake?

If Navient made errors that kept you in debt, you are not alone.

At FairShake, we have seen hundreds of people with loans serviced by Navient’s predatory lending practices such as steering people toward forbearance when they are eligible for repayment plans with better terms. Another common complaint is that Navient mishandles payments often due to billing inefficiencies, misleading sales reps, technical issues. Their errors have caused their customers to accumulate unnecessary interest, and garnish their customers’ paychecks, tax returns, and coronavirus stimulus checks. Many also report that Navient will send their accounts to collection agencies without any warning that they were behind on their payments, ruining their credit.

Navient has been the subject of lawsuits by the Consumer Financial Protection Bureau and five state attorneys general:

• In 2015, the CFPB’s investigation concluded that Navient overcharged borrowers and mistreated them in violation of federal consumer protection laws.
• In 2015, the DOJ found that Navient cheated active-duty troops and permanently disabled veterans on their student loans for nearly a decade by damaging their credit and making repeated errors in processing their payments.
• In 2017, the CFPB and the attorneys general of Illinois, Pennsylvania, Washington, California, and Mississippi filed a complaint that Navient levied abusive interest charges and hurt disabled veterans by making false statements on their credit histories. They also found that Navient purposefully concealed income-based repayment options from borrowers and steered them toward costly repayment plans instead of affordable long-term alternatives. Navient also obscured the annual notices and deadlines to renew desirable plans, causing financial harm.

Unfortunately, as an individual you cannot join one of these government lawsuits, but there are legal alternatives you can take that aren’t forbidden in your Navient contract.

For more information on Navient, please refer to our summary of the student loan industry.

If Navient told you that your loans were frozen yet double-billed you for late payments, you may be eligible for compensation. Fill out the form below to start an arbitration claim against Navient.