If you happen to have a large number of student loans, then you might be highly interested in reducing your monthly loan payments or getting out of debt as fast as possible. Having a student loan down your throat can be a cause of constant stress and anxiety while stopping your financial growth.
If the company Navient has serviced your loans, you are probably aware of Navient lawsuit by now and that those loans can be forgiven under certain circumstances. However, achieving Navient loan forgiveness might be a challenging process for students and is more problematic than it may sound.
It is vital to comprehend how you and your debt fit in. As of May 2018, there are four Navient lawsuits each of them blaming the company of hurting student loan borrowers during the process of repayment and demanding Navient loan forgiveness.
Navient lawsuit started in August 2015 by The Consumer Financial Protection Bureau or CFPB. Unfortunately, it is still not concluded and the parties requested a summary judgment. The Navient lawsuit can take a lot of time to conclude. Hence, a lot of student loan borrowers are rightly concerned about the future outcome of the Navient lawsuit 2020 process.
Do I qualify for a Navient Loan Forgiveness or Discharge?
The good news is, Navient’s request to dismiss the lawsuits which are pointed against them was denied. The Navient Corporation was claiming that States cannot control their business operations hoping to reject the Navient lawsuit.
What does that mean then? Well, it boosts the probability that Navient will eventually be forced to provide immense payouts to its harmed borrowers so you can get loan forgiveness.
This indicates and makes clear that student loan servicers aren’t immune to the laws of the state and must be held accountable for their wrongdoings. This is an outstanding piece of news which means we are going on the right path to receiving loan forgiveness.
However, there is a small problem. The Education Department doesn’t accept Borrower’s Defense to Repayment Discharge applications which are against Student Loan Servicing Companies.
It means the optimal way to get Navient loan forgiveness by pursuing a case against them is no longer an option. What you can do is to apply one against your school.
When can I File a Claim Against Navient?
The rest of this post gives detailed information about Navient lawsuits, what they mean for students like you who took out massive loans, and what we can expect from the future. There are lots of things you might need to know before filing a claim against the company to get Navient loan forgiveness.
Even if you can’t file a claim against the company to get Navient loan forgiveness, you have other choices to get you back on track if you have not yet gone into default. There are lots of options available for you to reduce your monthly payments by adjusting repayment plans or exploiting forgiveness programs.
How do Navient Lawsuits Affect You?
Navient lawsuits are a big deal proving that we are finally on the right path to solving the student loans crisis along with the Consumer Financial Protection Bureau, the Teacher’s Federation, and some States Attorney Generals. They are all standing up for ordinary people of the US and trying to fight the student loan servicing company that does not care about the students.
They are pursuing this to make sure that all harmed students can get loan forgiveness. Navient lawsuits show that the tide of the ocean is turning against large companies who have been robbing ordinary citizens of America for years. Therefore, decisive steps towards solving the student loan crisis should be celebrated because this problem is finally getting the attention it deserves.
All the current and prior students who have taken student loans from Navient, whether they finished the repayment program or not should keep following the news about Navient lawsuits because there is a chance that the Navient loan forgiveness program will offer massive payouts in case the Navient lawsuits prove to be successful.
Student Loan Debt Crisis and Navient’s Contributions
Student Loan debt crisis worsened after, allegedly, Navient thought that they could secure guaranteed repayment for their loans if they work as a lender, debt collection agency, and loan servicer for any debts that are in default. As a result, they got their hands on all three of the roles in controlling the whole cycle of student debt.
Allegedly, they were more interested in the loans that went into default so they could charge far more interest rates – as much as 15-25% compared to the loans that were still in repayment offering only five to seven percent.
It was claimed that they were interested in giving loans to borrowers who had low credit scores and without the ability to repay the amount. Navient gave student loans to anybody who was willing to take them and ended up having over 12,000,000 customers across the United States and more than 300 BILLION dollars in private and federal student loans.
The strategy worked very well for Navient; they reported a profit of over 250 million in 2017 – the same year they were hit with four massive lawsuits against them. It is not hard to imagine what they could accomplish if there were no Navient lawsuits.
Who Sues Navient?
The CFPB and some State Attorney Generals are all turning against Navient with massive lawsuits. The States Attorney Generals of Washington, Pennsylvania, and Illinois have all attacked Navient with three different lawsuits, while Consumer Financial Protection Bureau is suing the company with one lawsuit.
Each of the Navient lawsuits is accusing the company of allegedly making the student loan repayment process and the student loan servicing as expensive, confusing, and painful as possible.
However, keep in mind that Navient cannot be blamed for any of the cases until the lawsuit settles. Navient usually expresses its aim in helping students and notes that its employees take all the necessary actions to direct the students to the right path.
CFPB Lawsuit and Private and Federal Student Loans
The lawsuit brought by the CFPB does cover both Private and Federal student loans so that the lawsuits will help everybody regardless of the type of loans. The essential accusation from the Consumer Financial Protection Bureau’s lawsuit is establishing barriers to repayment by giving students misleading information, incorrectly processing the payments, and failing to react when the students disagreed.
The Illinois Lawsuit Complaints
The Illinois lawsuit accuses Navient of misleading student loan collection practices. Allegedly, Navient gave the borrowers false information about their options so they cannot get out of the default.
There is the Federal Student Loan Rehabilitation Program which was made to help students who fell behind on payments to help them get back on track and carry on repaying their loans without additional interests. There are certain cases where a student cannot repay her loan. The reason might be an injury, unemployment, or other financial difficulties.
It was claimed that Navient always tried to make sure that students never get out of the default by giving them deceptive information. The Federal Student Loan Rehabilitation Program was already very confusing, and allegedly, Navient took advantage of it and made it harder for its borrowers.
What I am about to tell you might sound a bit crazy but in case the Navient lawsuits are accepted, and you successfully get your loans discharged or forgiven you will have one last problem to solve which is the tax. When you receive loan forgiveness, the IRS considers it a taxable income. For example, if you owed 20,000 US dollars to Navient which is now forgiven, you might owe IRS about 4 to 6 thousand dollars.
The worst thing is that the IRS will demand the whole amount right away without giving you a chance of paying it monthly. But that should not make you devastated because there is and will be a lot of borrowers like you who will owe money to the IRS and it can also be resolved just like Navient loan forgiveness depending on the situation.
How Can I Avoid Future Issues with Loan Servicers?
The best way to ensure that the loan servicer does not mislead you is by getting familiar with your options, such as repayment plans, forgiveness, and discharge programs. Besides, you need to question every stage of communication and ask for more clarification if the issues are unclear to you. Only by having a full understanding of the debt repayment process you can avoid being the victim of mismanagement.
Where Can I File a Complaint?
If you think that the loan servicer engaged in unlawful or unethical action against you, you can file your complaint to multiple organizations. Establishments like the U.S Department of Education, State Education Department, State Attorney General, Federal Trade Commission, or the Consumer Financial Protection Bureau will be interested in your case.
Can I Discharge a Loan through a Lawsuit?
Although there are multiple lawsuits against Navient, there is no guarantee that they will end successfully. Even in the lawsuits that parties settled, Navient did not admit any wrongdoing. Besides, Navient lawsuit 2020 updates indicate that they can take several years to end. Hence, instead of lawsuits, looking for the best debt repayment options can be more effective and fast. Check your options like eligibility for forgiveness programs or transition to Income-driven plans.