Navient Student Loan Lawsuit

About the case

This is a proposed class action lawsuit brought on behalf of public servants about qualifying for the Public Service Loan Forgiveness program, which forgives federal student loan debt after the borrower makes 120 qualifying payments. The Public Service Loan Forgiveness program was created to help reduce what can seem like an impossible burden of student loan debt for public servants – teachers, school staff, nurses, police officers, and many others – who chose to serve their communities rather than take higher paying jobs in the corporate sector.

The defendant in this case is Navient, a private, for-profit student loan servicing company. Navient manages and collects on federal student loans on behalf of the federal government. Navient is responsible for and touts itself as an expert in guiding borrowers through their options to pay back their loans.

As alleged in the complaint, instead of living up to those commitments, Navient has been making numerous misrepresentations to steer borrowers away from Public Service Loan Forgiveness. For example, Navient provides false information to borrowers about whether Public Service Loan Forgiveness is available to them, whether their current loan repayments qualify, and whether they are “on track.” Many borrowers end up believing they cannot qualify for Public Service Loan Forgiveness, when in fact they do. Others are told their payments do qualify for Public Service Loan Forgiveness, when in fact they don’t. Others are simply brushed off, literally hung up on when they ask about Public Service Loan Forgiveness, or income-driven repayment plans, which are supposed to help borrowers maintain manageable monthly payments before the loans are forgiven.

This lawsuit seeks redress – both financial relief for those that have been misinformed and an injunction to prevent Navient from continuing in its pattern of misconduct.

FAQ for Proposed Class-Action Suit Against Navient

What is the proposed class-action lawsuit against Navient about?

  • Millions of public servants are eligible for and should receive Public Service Loan Forgiveness (PSLF), but many have been given inaccurate or misleading information by Navient, their student loan servicer, about their eligibility for PSLF and/or the requirements for maintaining such eligibility, causing them to spend thousands of dollars in excess of what was required to satisfy payment of their student loans.
  • By supporting the contemplated class-action lawsuit, the AFT seeks to reform Navient’s practice of giving student loan borrowers insufficient and inaccurate information about their loan repayment options for its own financial gain. The class action also attempts to obtain compensation for the financial injury that countless student loan borrowers have already suffered as a result of Navient’s misconduct.

Do I need to do anything to become a part of the proposed class action?

No, you do not have to do anything at this time. The proposed class representatives and class counsel have filed this case and are litigating it on behalf of the proposed class. The class has not yet been certified. The questions and answers below are provided for your information only and not as part of any court-ordered class notice.

Am I part of the proposed class?

  • The proposed class action was filed by several individuals on behalf of the proposed class of all individuals who have (a.) Federal Family Education Loan (FFEL) or Direct student loans serviced by Navient; (b.) have been employed full time (or have qualifying part-time jobs amounting to full time employment) by a qualifying public service employer for purpose of PSLF; and (c.) contacted Navient regarding their eligibility for PSLF.
  • This definition is subject to change.
  • You might become a member of the proposed class if you can answer “yes” to each of the five following questions:
    1. Do you have a federal loan—either a Direct Loan or a Federal Family Education Loan?
      • Private loans and Perkins Loans do not qualify for PSLF and are not addressed by the proposed class-action lawsuit.
      • Parent PLUS loans, while potentially eligible for PSLF if consolidated into Direct Loans, are not addressed by the proposed class-action lawsuit.
      • Visit forgivemystudentdebt.org for resources on getting PSLF eligibility for your parent PLUS loans, FFEL loans, and any other PSLF-related questions.
    1. Is Navient your loan servicer for your Direct Loans and/or FFEL loans?
      • If Navient services only your private or parent PLUS loans, you are not eligible to become a member of the proposed class.
    1. Do you work in “public service”?
      • For eligibility under PSLF, “public service” is defined very broadly and includes anyone working as an employee of a public agency (including, among others, city, county, state, federal and tribal governments, school districts, public colleges and universities) or certain types of not-for-profit organizations.
    1. Do you work full time?
      • The definition of “full time” for eligibility under PSLF is 30 hours per week for at least eight months out of the year, or whatever your employer considers to be full time for PSLF eligibility.
      • You can combine multiple part-time jobs to meet this requirement.
    1. Have you ever called Navient to talk about modifying your monthly student loan payments or to ask questions about your eligibility for PSLF?
      • If you simply called Navient to discuss modifying your monthly repayment plan or to get information about different repayment options, you might become a member of the proposed class.
      • If you have ever discussed your PSLF eligibility with Navient, you might qualify to become a member of the proposed class.

How do I know if I qualify for Public Service Loan Forgiveness?

What should I do if I have more questions?

The Plaintiffs

Kathryn, a middle school literacy teacher in New York

For three years, Navient informed the plaintiff that her employment was approved and she was “on track” for PSLF. Then, in December, 2016, Navient informed the plaintiff for the first time that none of the loan payments she had made to that point qualified for PSLF because she had not consolidated her loans from FFEL Loans into Direct Loans. The plaintiff lost nearly three years of qualifying payments for PSLF. As a result, the plaintiff does not have money to purchase her own home, cannot afford after-school programs for her child, and must borrow money from family to send her daughter to preschool.

 

Eldon, an associate professor at a community college in New York

Navient falsely informed the plaintiff that his only option for reducing his payment was to enter into deferment or forbearance. When he asked Navient whether he would be able to enroll in PSLF, Navient repeatedly, and incorrectly, informed him no such program was available to him and Navient did not offer such a program, without specifying that the Department of Education offers PSLF and another servicer, FedLoan Servicing, administers it. Had Navient provided him truthful information about PSLF and income-driven repayment plans, he would be more than halfway through his qualifying payments for loan forgiveness under PSLF. Instead, he must spend another ten years making qualifying payments. By that time, he will be 78 years old.

 

Melissa, a public school teacher in New York

The plaintiff repeatedly sought Navient’s advice about best repayment options for her, and Navient advised she would save money by consolidating her loans. This was wrong—she actually lost 37 qualifying payments she had made toward PSLF.  Navient then advised her that she should not submit her Employment Certification Forms until after she made 120 qualifying payments for PSLF. This was also wrong—she could file her Employment Certification Forms at any time. When she called Navient for advice about remaining on track for PSLF, Navient advised her to switch to an extended repayment plan to lower her monthly payments. Navient did not tell her that payments made under this extended repayment plan were not eligible for PSLF. After enrolling in the new plan, she continued to ask Navient for assistance with making qualifying payments for PSLF, and each time Navient offered her forbearances rather than giving her accurate information about qualifying for PSLF. As a result of Navient’s misrepresentations, the plaintiff lost years of qualifying payments toward PSLF, and has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Jessica, an adjunct professor in California

Beginning in 2007, she asked Navient multiple times if she qualified for PSLF and if she could make her loan payments on an income-driven repayment plan. Navient told her that her option to reduce her loan payments was limited to entering into a forbearance or a deferment, that she would qualify for PSLF after 120 consecutive loan payments, and that she should submit the paperwork for PSLF after making all of those payments. This was false. A borrower’s loan payments need not be consecutive in order to qualify for PSLF, and payments on FFEL Loans do not qualify for PSLF unless they are consolidated into Direct LoansAs a result of Navient’s misrepresentations, she entered into multiple forbearances, believing that was her only option for reducing her payments and that she would never qualify for loan forgiveness. She lost a decade of payments that could have been qualifying toward PSLF, and has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Rebecca, a college professor in California

Navient falsely informed her that because she holds positions at multiple colleges, she could not qualify for PSLF. But a borrower may meet PSLF’s full-time work requirement with a combination of part-time positions or with one full-time position. As a result of Navient’s misrepresentations, she  believed that she was not eligible for PSLF and continued making non-qualifying payments, and has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Michelle, a teacher in Maryland

She saves money and clips coupons to provide food and other necessities for her students, who live in poverty and are often faced with eviction and domestic violence in the home.  Navient misled her by telling her that a single missed or late payment would be enough to completely disqualify her for PSLF. But a borrower’s qualifying payments for PSLF need not be consecutive, and a borrower may continue making qualifying payments even if they have missed payments in the past. She did not pursue PSLF further, believing that in her challenging financial situation she would be unable to make 120 payments without a single interruption. As a result of Navient’s misrepresentations, she has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Elizabeth a teacher living in Maryland

Upon graduation, she was working at a non-profit entity and was enrolled in an income-driven repayment plan with payments of $0 per month. Payments of $0 under an income-driven repayment plan are qualifying payments for the purpose of PSLF. When she specifically asked about PSLF, Navient falsely informed she that to be eligible for PSLF, her payments must be consecutive, and any break in payment would require her to start the 120 qualifying payments over from the beginning. Because of this misrepresentation, after she went to graduate school for her master’s degree and her loans were placed in deferment, she believed that her prior payments of $0 per month no longer qualified. However, a borrower’s qualifying payments for PSLF need not be consecutive. After she began working as a teacher, she asked Navient about recertifying her income for income-driven repayment. Navient advised she that her monthly payment would be higher under the income-based repayment plan. This advice was incorrect. Because of Navient’s misrepresentations, she has made payments under the standard repayment plan for the last two years. She has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Jennifer, a full-time teacher in Maryland

Navient misled her by informing her she had to make consecutive payments in order to be eligible for PSLF and advised her not to pursue PSLF if she were going to continue with school and only make intermittent payments. She relied on Navient’s advice and has been in forbearance or deferment on her loans for multiple years, incurring additional interest and simultaneously not making any qualifying payments toward PSLF. Based on Navient’s misrepresentation, she has resigned herself to taking two community college courses each semester to remain in deferment because she believes she cannot afford to repay her loans. She will be required to make hundreds of thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

 

Megan a teacher living in Florida

When she asked Navient about income-driven repayment plans and loan forgiveness, Navient misled her by informing her that she was only eligible for a temporary forbearance and that she was not eligible for any forgiveness programs.  She relied on Navient’s advice and has been in forbearance on her loans multiple times, thereby incurring additional interest and simultaneously not making any qualifying payments toward PSLF. She lost years of payments that could have been qualifying toward PSLF, and has made and will be required to make thousands of dollars in payments of principal and interest that otherwise would have been forgiven under PSLF.

Resources

What is Public Service Loan Forgiveness?

Forgive My Student Debt Logo If you work in the public service, a little-known government program called “Public Service Loan Forgiveness” could allow you to have all of your direct federal student loans forgiven, tax-free. Public Service Loan Forgiveness (PSLF) isn’t a payment plan, like Income-Based Repayment or Pay As You Earn; it’s a separate program that incentivizes a career in the public service. 

To qualify for the program, you need to make 10 years of qualifying on-time payments (120 in total) toward your federal student debt. You must be working in the public service at least 30 hours a week (you can combine multiple part-time jobs to meet this requirement) beginning after October 1, 2007. After you make your 120th on-time payment, the U.S. Department of Education forgives your remaining federal student loan debt.

Many people using PSLF are also enrolled in an income-driven repayment plan to reduce their monthly payments until their debt is forgiven.

If you work in the public service, you could have your student debt forgiven.

Visit: http://www.forgivemystudentdebt.org/

 

AFT Student Debt Clinics

The American Federation of Teachers (AFT), as a union, we are fighting to make college affordable and student debt manageable. For affiliates that want to take on student debt as a way to fight forward on college costs, we offer the AFT Student Debt Clinics. The clinics provide:

  • Information on how to enroll in income-driven student loan repayment programs;
  • Help in enrolling in the Public Service Loan Forgiveness Program;
  • Opportunities to interact with members who haven’t been engaged with their union;
  • A curriculum that demonstrates the power of our union in improving the lives of AFT members and the people in our communities;
  • A resource to help persuade union members to become activists and leaders.

Contact AFT Higher Education at debtclinic@aft.org to start setting up a Student Debt Clinic program with your affiliate.

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