Student Loan Lawsuits

With an increasing number of student loan applicants, student loan defaulters and student loan servicers, it is really possible that the applicant falls prey to scams and misleading information. Here we aim to provide insights on what you need to know on student loan lawsuits.

Posted by Theres Ann on 20th March 2019


Lawsuits are a proceeding of parties against each other in a court of law. ‘Suit in Law’ is the old-fashioned word used to describe these. In a lawsuit, a legal or equitable remedy is demanded. The response has to be made to the plaintiff’s complaint. Plaintiff is successful if the judgment is in the Plaintiff’s favor. To prevent future legal disputes, a declaratory judgment is made. The conduction of a lawsuit is known as litigation.

The attorneys representing the plaintiffs and defendants are known as litigators. Separate statutory laws, case laws, and constitutional provisions define the rights of parties to a lawsuit. The procedure of litigation varies from jurisdiction to jurisdiction. The rules of procedures are very important for litigants to know.


Table of Contents

Numbers Topics
1 Basic procedures in a lawsuit
2 Types of popular lawsuits in the United States
3 Navient Lawsuit
4 Tips to avoid student loan lawsuits
5 How to handle if you get sued?
6 How can Navient lawsuits lead to loan forgiveness?
7 What are the Allegations of CFPB lawsuits?
8 Are Federal and Private Loans covered by CFPB Lawsuits?
9 Will the Navient’s loans be forgiven?
10 How has Navient acted against the borrowers?
11 What to be done if you are not happy with the Navient?
12 Consumer Financial Protection Bureau’s Student Loan Shakedown
13 Loan Servicers facing Trials
14 Flaws that halted student loan collection cases
15 Things that a student loan servicer is not supposed to do 
16 Student Loan Lawsuits FAQ

Basic Procedures in a Lawsuit

The basic procedures in a lawsuit are as given below.

  • Pleading - The complaint or petition that is filed in order to begin a lawsuit is known as Pleading. Complaint acts as the foundation for the entirety of the course. Pleadings are usually drafted by a lawyer and can file papers and represent themselves.

  • Pre-trial Discovery - Process of exchanging information between parties, about witnesses and evidence. Elimination of surprises and clarification of the lawsuit happens in pre-trial discovery, thus eliminating the need for frivolous claims or defenses Resolution

  • Appeal - An appeal is made if the final judgment does not affect a party or more. If a larger award than granted had to be passed, then the prevailing party has the right to appeal.

  • Enforcement - If the final judgment is not put into practice, then the enforcement methods include the writ of execution, bank account garnishment, liens, wage garnishment and more.


Popular lawsuits in the United States

The different types of popular lawsuits in the United States are as given below.

  • Accident lawsuits - This type of lawsuits deal mostly with the vehicle, private property, and other fatalities.

  • Compensation lawsuits - Benefits are granted to the employees hurt on their jobs. To maximize benefits, its best to hire an attorney.

  • Slip and Fall Lawsuits - For slip and fall lawsuits, cases are filed for those slip and fall accidents happening in the public places.

  • Dog Bite Lawsuits - Millions of dog bite events happen in the country every year and the owner of the dog is held liable for the injuries and deaths caused by the dog.

  • Product liability - When defective products cause serious injuries, this type of lawsuits are filed.

  • Drug Recall - When certain drugs have caused serious ailments to your body or created new conditions, then the drug recall lawsuits are called.

  • Medical Practise Lawsuits - When Medical Negligence, has resulted either in sickness or injury then the Medical Practise Lawsuits are summoned.

  • Libel (Defamation) - When someone has published or said something untrue about you, then the defamation lawsuit is charged.

  • Discrimination Lawsuits  - Discrimination in the form of race, color, religion, age, disability and other factors is intolerable and lawsuits are filed in  case of occurrence of differences at any place

One other category of lawsuits os educational lawsuits and portrays instances of educational negligence. Several issues pertaining to student loans happens, sometimes concerning the borrowers and the other times the loan providers.

And hence there are many student loan lawsuits that are currently in the court and it is necessary to follow steps to avoid falling into any of the loan scams.

The allegation of the Navient lawsuit was a popular lawsuit in the United States. As per the testimony, borrowers were redirected into various student loan repayments and forbearance which made them unqualified to receive federal student loan forgiveness.

And as a result, many public service professionals, including teachers, nurses, first responders, social workers, and other public servants are paying more than what they were supposed to pay.

In the public service loan forgiveness, student loans of borrowers including teachers employed full-time in an eligible government service job, or non-profit jobs who make 120 payments on time are offered student loan forgiveness.


Navient Lawsuit

States including California, Illinois, Pennsylvania, Washington, and Mississippi, have sued the Navient.

Navient has been accused of the following:

  • Provided wrong information to the borrowers, thus creating an obstacle for repayment.

  • Payments were processed incorrectly

  • Did not take up the responsibility even after consistent complaints from the borrowers

  • Many struggling borrowers were compelled to overpay their payments, even when they only had to make lower payments.

  • Private student loan borrowers were asked to release their co-signer from the loan.

  • The credit of disabled borrowers including severely injured veterans were harmed.


Tips to avoid student loan Lawsuits

When it comes to student loans, you have all provisions to not create a situation for student loan lawsuits.

  • Adequate knowledge of student loan options is one possible solution. The various options for student loan servicing including student loan refinancing, federal student loan consolidation, income-driven repayment plans, and student loan forgiveness.

  • Monitoring of the latest student loan developments is another possible option.

  • Organized record-keeping of student loan repayments

  • If you find that you have been lied on, then you can file a complaint to the US Department of Education, Consumer Financial Protection Bureau, or the lender or the servicer.

  • Try your level best  to pay off your student loans at the earliest

Attorneys and law officials have identified that miscommunication was one big reason behind most of the lender-borrower issues. However, the response of courts on these types of courses is quite unpredictable.


How to handle if you get sued?

In cases of Federal or Private loans wherein you don’t try to get out of the default, then you’ll probably get sued. In cases where you have delinquent private student loans, the lenders try for a court order in order to use severe collection techniques such as wage garnishment.

  • The first point is to respond on time

  • Secondly, look for a valid defense

  • Identify your possessions in case you lose any of them

  • Try all possible methods of negotiation with your lender.

  • Seek advice from any student loan lawyer 

Respond on Time

Certified mails and all notices about court cases are to be opened on time. The best possible method is to hire a lawyer to fight a student loan lawsuit. If you have any defense against the lawsuit, a lawyer can help you figure it out. A lawyer would also help you in completing the complicated paperwork on time, and representing you in the court.

If an affordable and competent lawyer is not found out, then you will have to proceed with it all your own. Do it yourself resources help you in dealing with these resources. Arming yourself with the right resources help you in ensuring that important court rules and essential deadlines are met on time.

Look for a valid defense

Effective defenses to student loan lawsuit are as given below.

  • The lender made you wait for too long before being sued

  • Being a victim of identity threat that you never repaid your loan

  • The loan holder failed to credit your account on what you owed on the loan

  • You are being sued for more than what you agreed to pay

  • You are unable to finish your education from the school due to negligences from the school authority or the cancellation of the loan

  • If the school has fraudulently obtained the loans in your name, even then you can raise a valid defense

  • The debt is discharged in a bankruptcy proceeding

  • If the loan holder hasn’t provided you the proof that it has the legal right to sue you, even then you can be sued.

Identify what you can keep if you lose

If a judgment is raised against you then you won't have to pay, anything as a judgment proof. That is because you earn very little, the creditors are prevented by law from taking what you have.

Equity in your home and car, earnings and retirement accounts are protected by law. Clothes, household goods, tools you need for a job, and, some public benefits are also kept safe.

Consider negotiating with your lender

A payment plan can be negotiated. Loan holder who has a way to settle the debts, it would be easier to go to the additional expense and trouble of trying to collect it. Facing a lawsuit can’t be done alone. However, if you are smart enough you wouldn’t have to engage a lawyer into your case. But it is always recommended to choose someone who would help you with your strategies.

There were several instances wherein the State has passed several laws to regulate student loan companies. And thus the student loan companies requested the Department of Education to not let the state governments draft laws for the companies. Hence, the accountability of student loan companies against court laws would be decided by the trials that happen in the courtrooms.

A few complaints that are usually made against student loan companies are as given below

  • Borrowers only thought they were on autopayment - Autopayment helps in deducting a stipulated amount towards loan payment every month. However, there were student loan companies, who turned off the auto-payment options for companies, thus reducing their payments.

  • Payments were not made to the exact loans that were supposed to be repaid - This happened in cases where the borrower had several loans, and repayments were made keeping one particular loan in mind but were not paid.

  • Delay in processing income-driven repayment plan applications - Some income-driven repayment plans, were not sanctioned by the student loan companies.

  • Borrowers were mistakenly placed on the loan repayment plan - Student loan choices made by the borrowers were sometimes not offered to them. Instead, they were compelled to pay for plans that were least beneficial to them.

  • Sometimes people who didn’t even have a loan were asked to repay their loan. Sometimes monthly payments were significantly increased for the borrowers which further worsened the situation.

  • Report of incorrect information to credit agencies - Credit scores increased for the borrowers even when the accounts were not delinquent. Because credit scores are used to check the availability of loans, for jobs and renting approvals, incorrect information cannot be reported to credit agencies.

Private lenders use lawsuits as the greatest weapon to collect loans from students. Collection agencies are sometimes hired by private lenders or the government to collect the amount back from you. If you do not have any defenses you cannot ignore a lawsuit. Even if your case lost, you wouldn’t have to repay your debt. Creditors use special collection tools to try to collect. Based on the type of income and property, is the effectiveness of the special collection tools that are implemented by the collection agencies. Strategies that are to be considered if you are sued includes:

  • Raise defenses to fight back

  • Understanding the outcomes of losing a case

  • Finding out if you are eligible for any special right if you are a part of the military

How to raise a defense?

Winning a lawsuit is the best possible method to deal with a lawsuit. Raising a defense can sometimes cause the creditor to drop the case.

Common defenses to be considered are as given below.

  • You can defend saying that you have paid the amount, but the money was not credited to your account.

  • The debt is not owed and that you are not current on your payments

  • A miscalculation of the due amount.

  • The creditor is trying to collect an amount that is beyond the promise on the agreement

  • It was not you who agreed to pay the debt. Someone else in your name collected the loan and agreed your repayment

  • The debt has already been discharged on bankruptcy

  • For a private student loan, the creditor has waited so long to sue you

Another defense is that the loan is not enforceable. Forgery, mistake or other reasons can be a reason for the loan to be not enforced. Some defenses are similar to the government loan discharges. If you qualify for a discharge, you should get help from a lawyer.

The court cannot be approached to grant these discharges. Separate applications should be made to the loan holder. Because of the problems you had with the school, you can defend a lawsuit. These claims can be raised as a defense to repayment.

An appeal is made to the higher court if you lose your case.

Appeals that are filed are short and are strictly enforced. Appeals are not an entirely new presentation of the case. If your case is lost in the court, then the creditor has rights to use several methods to collect the money back from you.

The creditors can use several special collection tools to collect the money back from you.

You get a title as a ‘collection proof’ if you lose a lawsuit cannot hurt you as your assets and income are small and are protected by federal and state law. Until there is an improvement in your financial situation, you wouldn’t have to worry about the judgment.

Moreover, the exemption laws vary based on your State of Residence. A legal professional can grant you more insight on the exemption laws of your state. At a minimum a publication that allows your state laws should be minimum.

Exemption of rights

A few of the exemption rights available are as given below.

  • Exemptions to protect the car, household goods, and other properties

           Some exemptions are mentioned in terms of dollar amounts of property. There are some other states which grant an exemption to goods and property, irrespective of their dollar worth. In this case items such as tools for occupation, clothing, car, bible and household goods are granted the exemption.

  • Exemptions to protect your home

            Homestead exemptions can be equivalent to $1,00,000 or more and can be less in some other states. To receive the homestead exemption, a declaration of the exemption along with property registry in your community is performed. In a few of the states, protection is automatic.

Exceptions protect your home and cash from garnishment. Garnishment takes money away from your wages or bank account. A request for garnishment is filed with the court clerk, sheriff or another local official and a notice is issued to the garnishee. A hearing is requested to prove federal or state law.

Incomes such as government payments are exempt from garnishment. Even if some part of your income is high, few sources of income are protected under federal or state law. Even if your stay isn’t affected, your case will move forward.


How can Navient lawsuits lead to loan forgiveness?

A few of the illegal doings, that lead to the Navient Lawsuit are as given below.

  • Payments were mishandled against borrower’s best interests.

  • Struggling bearers used forbearances to force for monthly payments.

  • It was difficult for borrowers to understand, apply and receive an approval.

  • The process of re-enrollment and annual certification completion is purposefully obscured

The consumer financial protection bureau has asked the Navient to offer compensation to borrowers.

Navient faces lawsuits from Consumer Financial Protection Bureau, State Attorney General of Illinois, Washington and Pennsylvania.


What are the Allegations of CFPB lawsuits?

A few of the allegations of the Consumer Financial Protection Bureau against the Navient are as given below.

  • Failed to apply borrower payments to the accounts.

  • Strong-arming borrowers were ready to pay an amount more than they had to

  • Details were hidden for people to make lower payments

  • The firm lied to private borrowers about the requirements essential to release the co-signers

  • The credit scores of disabled borrowers including veterans were ruined.

Navient was also accused of taking shortcuts when the borrower’s situations were handled. Income-based repayment eventually offered loan forgiveness. The BDAR program can be used to file a complaint against your school.


Are Federal and Private Loans covered by CFPB Lawsuits?

One popular complaint against CFPB Lawsuit is that the firm prevented easy repayment, by providing insufficient and at other times unrequired information. The CFPB aims to deliver significant relief for the borrowers if they are harmed by illegal servicing failures. If Navient didn’t have guaranteed government contracts, this would have been a great day.

Specific Lawsuit by State Attorney General’s Lawsuit against Navient is that the firm allegedly leads many numbers of borrowers into millions of dollars of debt.

The complaints against Navient by Illinois Lawsuit is that the firm kept on continuing with the current plans, even though they were aware that these loans would default at extraordinarily high rates.

Student loan debt problem has an increased impact on the country’s economy than the credit card problem. There is another allegation that the firm has failed to support the borrowers and had misled them to successive forbearances that increased the overall cost of loans.

Misleading has also happened in the case of the Rehabilitation Program of the Federal Student Loan. Moreover, the eligibility requirements for disabled student loan borrowers, for student loan forgiveness was also given wrongly.

Another lawsuit was launched against Navient by the Washington State Attorney General Bob Fergusen which alleged of multiple student loan lending, servicing and debt collection practices. Navient is also accused of improperly steering financially distressed students, toward short-term forbearances, engaging in aggressive and misleading tactics and more.

Navient did terrible things such as determining to whom they would lend money to, how they would approach the process, extracting every possible benefit from the student loan forgiveness, which in other ways is stealing tax-payer dollars.
The Washington Lawsuit accuses Navient of allowing predatory loans for students, to colleges where the graduation rate is less than 50%, despite the knowledge that students would not be able to repay the loans. A deceptive promotion of co-signer release was also performed by the Navient.

The Pennsylvania State Attorney General has accused Navient of badly handling their student loan administration duties.

Pennsylvania's abuses against Navient include disregarding of evidence that students were likely to default at significant rates, increase in subprime even after receiving a warning about it, to convince lenders to become a preferred lender and hence increasing the profitability of loans. The court in this regard aims to offer,

  • Complete restitution to the borrower’s impacted by illegal lending, servicing, and practices

  • The Navient should disgorge all the money collected by illegal means.

  • Navient should stop collecting any illegal loans

  • The firm should also delete negative credit details from consumers impacted by unlawful practices.

  • Civil penalties should also be determined by the courts 


Will the Navient’s loans be forgiven?

Navient’s loans may not be forgiven completely. However, there can be offerings from the government based on the State that you are residing at. But the sad truth is that Navient has influential powers in the higher authorities of governance.

The changes that President Trump plans to implement regarding federal student loans and loan repayments are as given below.

  • Reformation of Federal Income-Driven Repayment Plans

  • Elimination of Public Service Loan Forgiveness

  • Elimination of 100% of Subsidized Student Loans


How has Navient acted against the borrowers?

Even borrowers with genuinely low incomes were not enrolled into student loan forgiveness, because of the plans and policies chosen for them by the Navient. Navient not only provided wrong information over the phone but also sent out wrong information in writing.

Moreover, the firm has through its plans, unqualified several candidates to pay for several illegal and immoral activities, against its borrowers and proves to be punished if the allegations are wrong.

Navient will push you into forbearance even if you are not able to do it or not. Though this scheme allows you to take a temporary break from paying the loans, the interest for these loans will keep on accumulating.

The representatives at the Navient, behave in a really friendly manner, so as to seek the interest of people. Dealing with high balance borrowers isn’t as good for Navient. An average college student graduates with quite a good amount to be repaid as student loans.

If you try for an off-time from the internship, you can pay back your loans before your payments are due.

One common question about Navient is whether it can take away your house.

However, the truth is that if the loan has defaulted, then the government can probably deal with collecting your loans by placing a lien on your loan, that would not allow you to sell your home, refinance your mortgage, get a home equity line where you are not allowed to pay off the loan and more.

The Navient itself is not able to garnish wages, but the government is able to garnish 15% of your disposable income. If it happens so, you’ll receive a notice at least 30 days prior to garnishing.

A hearing can be requested within 30 days of receiving this letter.

Another question is if the Navient loans are eligible for forgiveness. The answer to this is that, as forgiveness isn’t automatic, you’ll have to meet the requirements of each program.

Social security benefits cannot be received via, Navient, but by Federal Government. It is also possible to consolidate federal student loans, including those of the Navient services. Private loans serviced by Navient can have variable interest rates.

However, the interest rates of federal loans remain to be the same.

Federal loans, serviced by Navient with a private student loan company can be refinanced. The protection offered to private student loans is really less and includes Private Student Loan Forgiveness, income-driven repayment plans, and even forbearances.

The duration for capitalization of interest of Navient is another topic of interest. Your interest can also be capitalized if you change your repayment plans.

Capitalization also happens if your loan has defaulted, or if you are in forbearance, or if you miss your certification on an income-driven repayment plan.

It is necessary to ensure that the interest is accrued and grows at a simpler rate than an exponential one with capitalization.


What to be done if you are not happy with the Navient?

It is general manners to the first complaint to the firm’s complaint redressal forum if in case you are not happy with the services that the firm offers.

Same can be done with Navient, wherein all the complaints regarding the firm can be addressed to the complaint redressal group of the organization.

The mail address of the Navient’s complaint department is advocate@navient.com. It would also be possible to refinance your Navient student loan. Refinancing becomes difficult if you do not have your private student loans to start with.

If not payments are made for federal student loans, then it will be possible to consolidate all loans into federal direct loan consolidation.

The interest rate, in this case, remains the same. If credit was created towards loan forgiveness, consolidation creates new loans and wipes out credits.

It is also better to pay off the loans as fast as possible. This can be better done by earning some extra income or earning more money with a side hustle.

Free debt calculators will help you figure out the amount of debt that you’ll have to pay finally.

The job of Navient is to minimize the likelihood of default. The Department of Education has listened to about 2400 calls from 2014 to 2017, from almost 2,19,000. In nearly one out of 10 calls, there was no mention of the estimated size of monthly payment from a borrower, based on his/her income.

This has clearly trapped the borrowers.


Consumer Financial Protection Bureau’s Student Loan Shakedown

The Navient faced legal actions from the Consumer Financial Protection Bureau, for steering borrowers to sub-optimal repayment plans. The Navient holds contract from the Department of Education to hold $1.4 trillion, in outstanding government-issued loans.

Borrowers are entitled to forbearance to save on administrative expenses, provided these borrowers are placed into an income-driven repayment program instead. In income-based repayment, borrowers would have to submit paperwork documenting their income and family size.

Relative to the debt, a borrower’s income must be low. Interest accrual also happens along with this plan. Sometimes, even when the borrower makes correct monthly payments, unpaid interest grows each month as the payments are set low enough.

According to CFPB, forbearance is less beneficial than, income-based repayment and does not include loan forgiveness possibility and are enrolled in forbearance. Though income-based repayment is the best option, forbearance cannot be denied to candidates who seek for it.

For the case to receive any benefit, CFPB has to present evidence on how the Navient has steered borrowers into forbearance when income-based repayment would have been the best for borrowers.

However, Navient was able to present before the court evidence including phone call records and other related documents, that clearly depicted how the borrowers were informed about income-based repayment programs.


Loan Servicers facing Trials

A few of the other loan servicers, who are facing trials regarding, student loans are as given below.

  • Pennsylvania Higher Education Assistance Agency was sued by the Massachusetts government regarding improper payment processing of borrowers in Federal Public Service Loan Forgiveness Programs. There was a recent denial of PHEA’s motion to dismiss. PHEA was accused of deceptive practices, that made public servants to lose benefits, as well as financial assistance for two federal programs. This also included student loan forgiveness after 10 years of the loan. Because of the issues from PHEA borrowers were not able to make 10 qualifying monthly payments which entitled them to student loan forgiveness and overcharged students.

  • A collection of debt by the National collegiate couldn’t be proved that it could be owned or consumers could owe it. Thus National Collegiate including the Transworld Systems, reached a settlement with the Federal Government in 2017, for over $21.6 million settlement.

  • Discover was fined for $18.5 million in 2015 for sloppy student loan servicing, by the Consumer Financial Protection Bureau.

  • It was in 2016 that Wells Fargo was fined for $3.6 million, for having misled student loan borrowers and for charging illegal fees.

  • ACS Education Services were ordered to pay $2.4 million to Massachusetts state for abusive collection practices, overcharging active duty members, delaying of borrower’s applications for income-based repayment and related problems.

  • There was a settlement for Nelnet with $55 million in 2010, wherein 8 student lenders were accused of defrauding taxpayers, by overbilling government for interest subsidies.

A few of the most complained about student loan servicers include Navient Solutions LLC, AES/PHEA, Nelnet, Great Lakes, SLM Corporation, Wells Fargo, and more.


Flaws that halted student loan collection cases

There are several flaws that have been successfully used to halt student loan collection cases. A few of them are as given below.

  • The creditor cannot prove his ownership of the debt

Loans are transferred from lenders to investors using through the process called securitization. Securitization process involves the pooling of loans together and selling it as a package. The proof that the chain of title remained intact through ownership, can be a challenge for debt holders.

  • The inadmissibility of creditor’s records

Each state has a different rule about business records, promissory notes, payment ledgers and more.  Rules are established on who can qualify for authenticity and accuracy. The requirement of direct or firsthand knowledge of record creation is suggested by most jurisdictions. In the National Collegiate Student Loan Trust versus Nohemi Macias case, it was ruled by an appellate court that, collection firm was not qualified to verify creditor’s loan records. Without loan records, plaintiffs were left without anything to support the case.

  • Debt is beyond the statute of limitations for collections

Federal loans receive an exemption from when they can be collected. But private loans do not have these benefits. Collectors would lose their right to sue after years without payment. Because the creditor had waited too long to sue, a lawsuit was struck down by the court in Arizona. By law, if no repayment is made within 6 years, the servicer is supposed to sue the student, for which servicer, in this case, has actually waited for 7 years.

  • The creditor is not licensed to do business in the jurisdiction

Foreign corporate are required to register in the open area. Failure, in this case, can prevent creditors from using the local court system. Four securitized investment trusts owned by Navient had filed four lawsuits which were later dismissed by the court as these trusts were not registered to do business in the State.

  • Creditor’s failure to comply with court requests for additional information

When creditors were asked by the court for additional information, most of them withdrew the cases. Jay S. Fleischman who is a lawyer for borrowers in student loan collection cases says that it is all a number’s game.

Cases are dismissed if there is no victory or settlement. For a New Hampshire case, a discrepancy was criticized by the judge, in the creditor’s records and was asked for a clearer proof that the creditor owned the loan.

As there was no further response from the creditor, the case was disclosed. If sufficient effort is not taken by the plaintiff to move the case forward, courts are allowed to dismiss the case for ‘lack of prosecution’. Hundreds of student loan cases have been dismissed on that ground.


Things that a student loan servicer is not supposed to do

A few of the things that the student loan servicer is not supposed to do is as given below.

  • No servicer is permitted to compel you to take up forbearance. Though this technique, appears beneficial in the beginning, this can accumulate a lot of unwanted interest over the years. This would benefit servicers by reducing the number of debt defaulters. However, this is not beneficial in the long run for lenders.

  • The servicer is not supposed to place your IDR Plan on cruise control. Income-driven plans would help you to pay monthly installments of your loans, based on your incomes. The servicer should remind you to recertify your income every year, in order to receive your benefits.

  • Early payment of your loan must be supported by the servicer. This would be highly beneficial for the borrower because there would be a significant reduction in the amount of money that he has to return as interest.

  • After making 12 to 48 monthly payments, borrowers are allowed to apply for cosigner release. At times, co-signer release would have been denied because of prepayment. This should be predicted and prevented by the servicer.

  • Allocation of partial payments in ways that hurt you should be prevented by the servicer. A bill that sums minimum monthly payments, for each of your loans should be available. Allocation of partial payment involves covering of what is owed on the loans with the highest interest rates. The direction of partial payments along with potential ramification must be performed by the servicer.

  • You’ll have to be informed by the servicer if a pay-off attempt failed. Autopay must be arranged in a way that is beneficial for you. The firm should allow you to discharge loans in case of bankruptcy.


Student Loan Lawsuits FAQs

1 - What is the Navient Lawsuit?

This is a lawsuit against the Navient Loan Servicer, that alleges that the loan servicer, misleading loan borrowers to opt for loan repayment programs and forbearances which unqualified them for Public Service Loan Forgiveness.

2 - Name a few student loan servicers.

CornerStone, FedLoan Servicing (PHEAA), Granite State – GSMR, Great Lakes Educational Loan Services, HESC/Edfinancial, MOHELA, Navient, Nelnet are a few of the student loan servicers.

3 - Can loan servicers be chosen for the federal student loan program?

In the case of federal student loans, the student loan servicer can't be chosen.

4 - Will consolidating student loans hurt the credit of the person?

If you are unable to make monthly payments, then lower payment through loan consolidation will help.

5 -  Name a few student loan servicers, who have been sued.

Several student loan servicers have been sued till date due to the misdirecting information and a few of them include PHEAA, National Collegiate Student Loan Trust, CFPB, Wells Fargo, ACS Education Services, Nelnet and more.

6 - What are the functions of Loan Services?

Loan servicers assist in repayment plans, forbearance, deferral, consolidation, loan forgiveness programs, and it is answerable to borrower questions.

7 - How to find out my student loan servicer?

If you have applied for federal student loans, then the National Student Loan Data System can be viewed to find out the loan service provider. 

8 - To whom can the problems with student loan service be addressed?

Problems related to student loan service can be addressed to the Loan Servicer, Ombudsman Group, and the Consumer Financial Protection Bureau.

9 - Name the federal loan servicers with the most CFPB Complaints?

Navient, AES-PHEAA, Nelnet, and GreatLakes are the federal loan servicers with the most number of CFPB Complaints.

10 - Can student loan payoff be negotiated?

Most often the lender wouldn't be happy about the negotiation of a payoff.