Last week, the Consumer Financial Protection Bureau announced that it is suing the nation’s largest servicer of federal and private student loans, Navient. With the backing of numerous consumer complaints, the CFPB claims that Navient, formerly part of Sallie Mae, illegally cheated student loan borrowers out of repayment rights through shortcuts and deception.
To learn more about the situation, we surveyed 507 of Navient’s customers to see how many of these individuals have been impacted by these alleged practices that caused the CFPB suit seeking redress for affected consumers.
We found that a significant portion of Navient’s customer base claims to be victims of the company’s illegal practices which violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act.
The CFPB listed five major grievances against Navient and two of its subsidiaries. The government watchdog claimed that Navient:
1) Fails to correctly apply or allocate borrower payments to their accounts:
The CFPB charges that Navient routinely misapplied borrower payments and knowingly failed to correct the errors.
2) Steers struggling borrowers toward paying more than they have to on loans:
The CFPB charges that Navient steers borrowers into forbearance programs, which allows borrowers to take a break from making payments at the expense of additional interest. These borrowers could have instead enrolled in income-driven repayment plans - typically a smarter option that just so happens to take much more paperwork on Navient’s end.
3) Obscured information consumers needed to maintain their lower payments:
The CFPB charges that Navient failed to adequately inform borrowers of critical enrollment and renewal deadlines for income-driven repayment plans.
4) Deceived private student loan borrowers about requirements to release their co-signers from their loans:
About 90% of private student loans are originated with a cosigner. The CFPB charges that Navient deceived customers about the payment history requirements needed to qualify for the co-signer release program.
5) Harmed the credit of disabled borrowers, including severely injured veterans:
The CFPB charges that Navient misreported cases of student loan forgiveness as defaults to the credit reporting agencies, consequently damaging credit reports.
We implemented a screening question to verify that our 507 respondents did in fact have student debt and are current Navient servicing customers. In our survey, we aimed to use the same language in our questions as the CFPB used in its report. We did not preface our survey with information related to the recent lawsuit.
Here are the results of our Navient customer survey:
1. In your experience, has Navient failed to correctly apply or allocate your payments on your account?
1. 29.78 percent reported “Yes, Navient has failed to correctly apply or allocate my payments.”
2. 70.22 percent reported “No, I have never had this issue with Navient.”
2. In your experience, has Navient steered or pushed you into using federal forbearance programs?
1. 35.50 percent reported “Yes, Navient has steered or pushed me into using federal forbearance programs.”
2. 64.50 percent reported “No, I have never had this issue with Navient.”
3. In your experience, do you believe that Navient failed to adequately inform you of critical deadlines or consequences related to income-driven repayment plans?
1) 38.25 percent reported “Yes, Navient failed to adequately inform me.”
2) 44.00 percent reported “No, Navient always adequately informed me.”
3) 17.75 percent reported “Not applicable.”
4. Do you have private student loans serviced by Navient?
1) 58.19 percent reported “Yes.”
2) 41.81 percent reported “No.”
5. Do you believe that your were ever deceived about the requirements to release a co-signer from your loan? Note: This question was only asked to respondents with private student loans serviced by Navient.
1) 33.22 percent reported “Yes, I was deceived by Navient.”
2) 66.78 percent reported “No, I was not deceived by Navient.”
6. How would you rate the customer service of Navient from 1 to 10? 1 being the lowest rating possible, and 10 being the highest rating possible.
We found that the average Navient customer rated the customer service 5.92 out of 10.
7. How would you rate the clarity of Navient’s online payment system and interface? 1 being the lowest rating possible, and 10 being the highest rating possible.
We found that the average Navient customer rated the online payment system and interface 5.86 out of 10.
8. How would you rate your overall relationship with Navient as your student loan servicing company? 1 being the lowest rating possible, and 10 being the highest rating possible.
We found that the average Navient customer rated their overall relationship 5.72 out of 10.
9. Have you heard about the new January 2017 CFPB lawsuit against Navient?
1) 24.26 percent reported “Yes, I did hear about the lawsuit.”
2) 75.74 percent reported “No, I did not hear about the lawsuit.”
Our survey was administered from January 20, 2017 to January 22, 2017 through online survey company Pollfish. A screening question was used to ensure all respondents currently had student loans serviced by Navient.