Navient Archives - Page 2 of 2

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Tips for Avoiding Student Loan Repayment Traps

Posted on January 24, 2017by Admin

Know your loans. Check copies of your FREE credit report from the three major credit bureaus via annualcreditreport.com if you think you may have lost track of a loan, as lenders will almost always report the existence of the loan to the bureaus. For federal loans, check the National Student Loan Data System. Always know how much you owe, and to whom.

Know your options when it comes to income-driven repayment plans. If you have federal loans, you may be eligible for a payment plan that allows you to submit information based on your income and family size and then reduce monthly payments to amounts that are affordable for you. Here is a list of Income-Driven Repayment Plans available through the Education Dept. and answers to frequently asked questions.

Stay Informed. Signing up for an income-driven repayment plan is not enough. You have to re-qualify each year with updated financial information. Do not trust your lender to do this for you. The consumer bureau recently accused Navient, the largest student loan servicer in the U.S., of not properly informing borrowers of this fact or of crucial deadlines. As a result, many borrowers saw their payments jump, leading to numerous late payments and additional interest and fees.

Avoid Forbearance. If you are having trouble making your monthly payments, your servicer may offer you something called a forbearance, which essentially allows you to reduce or even eliminate payments for a period of time. The downside: The loan’s interest keeps piling up. Recently, Navient was charged with steering borrowers into forbearance when they may have had better options, such as income-driven repayment plans.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

https://www.nytimes.com/2017/01/20/your-money/6-tips-for-avoiding-the-worst-student-loan-repayment-traps.html?src=me&_r=0

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Government Sues America’s Largest Student Loan Company

Posted on January 20, 2017by Admin

The Washington state Attorney General filed a lawsuit against student loan company, Navient on Wednesday. Navient is formerly part of the private student loan company, Sallie Mae. In a separate lawsuit, Illinois Attorneys General named both Navient and Sallie Mae.

According to Richard Cordray, the director of the Consumer Financial Protection Bureau (CFPB), “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs.”

Navient separated from Sallie Mae in 2014 and is currently the largest student loan servicer in the country. The company reportedly handles more than 12 million student loan accounts. Approximately half of the borrowers have federal loans and the other half are private. According to the CFPB, one in four student loan borrowers have Navient as their servicer.

The CFPB’s allegations claim that Navient steered struggling borrowers toward paying more than they had to, and misallocated borrowers’ payments when they were made across multiple loans. It also alleges that in some cases, Navient erroneously reported borrowers had defaulted on their loans, damaging their credit score.

In the lawsuit, the government claims that Navient also made it more difficult for borrowers to enroll in an income-driven repayment plan, which can be used to lower their monthly payment if they’re struggling to make payments.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

More than 40% of Student Loan Borrowers Not Making Payments

Posted on April 11, 2016by Admin

This shocking statistic raises concern that the $200 billion owed might never get repaid. The new figures represent the after effects of a borrowing boom that has spanned over a decade, with a record number of students enrolling in trade schools, universities and graduate schools.

While most of these borrowers have now entered the workforce, 43% of the roughly 22 million Americans with federal student loans were not making payments as of January 1, according to the Education Department’s $1.2 trillion student-loan portfolio.

Approximately 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt, meaning they had not made a single payment in more than a year; Three million more were at least a month behind, owing roughly $66 billion. Another three million owing nearly $110 billion were in “forbearance” or “deferment,” meaning they had received permission to temporarily halt payments due to a financial emergency, such as unemployment.

Some borrowers are not even repaying their student loans when they can, according to research from Navient Corp. The study showed that borrowers prioritized other bills—such as car loans, mortgages and heating bills—over student loan debt. A borrower who defaults on an auto loan might have their car repossessed; with student loans, the penalty is not as immediate or severe.

Advocacy groups, some members of Congress and the federal Consumer Financial Protection Bureau blame the loan servicers for not doing enough to reach out to struggling borrowers to offer manageable payment options.

The Obama administration has stepped up efforts to reach borrowers and offer the income-based repayment plans. In certain cases, the government is garnishing wages and tax refunds of borrowers who refuse to pay. Private debt-collection agencies hired by the Dept. of Education garnished $176 million in Americans’ wages in the final three months of last year for student debt, according to federal data.

Click here to read more on this story.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Sallie Mae Faces Nearly $200 Million in Penalties for Cheating Active Duty Troops

Posted on May 14, 2014by Admin

Sallie Mae and its former loan unit, Navient have struck a deal with federal authorities to resolve allegations that it cheated active duty troops and other borrowers who were being charged late fees.

According to the Consumer Financial Protection Bureau (CFPB), service members have complained that companies such as Sallie Mae and Navient have told them they could not receive protections under the law unless their loans were in forbearance or deferment.

Sallie Mae and Navient more than doubled to $173 million- the amount they have set aside to cover settlements resolving these allegations brought by the Federal Deposit Insurance Corp. (FDIC) and the Dept. of Justice. Navient has acknowledged the federal government’s investigation into allegations the company cheated active-duty troops in violation of the Service Members Civil Relief Act from November 28, 2005 to present day.

Under the Service Members Civil Relief Act, loan companies must reduce the interest rate on student loans to no more than 6 percent upon request by active duty troops. As of 2008, the law extended beyond private student loans to include federal student loans.

In addition, troops have told the CFPB that their servicers wrongly told them the 6 percent interest-rate cap expired annually, and they were required to submit additional paperwork to retain it. Others were discouraged from applying for the protections contained in the service members’ law, while some were mistakenly told that the benefits are only available to those in combat zones.

Furthermore, some service members told the CFPB that they were told to provide end dates for their tours on active duty, a requirement that is virtually impossible to meet, since officers in the armed forces are usually not told when their tours will end.

Rohit Chopra, the consumer bureau’s top student loan expert, told the Senate “that companies that fail to comply with the service members’ law may be cheating borrowers in other ways.”

A settlement resolving the service members’ allegations would need to be approved by the Education Department and require the companies to establish a $60 million fund to compensate troops for violating the service members’ law when it comes to student loans.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.