Uncovering the Unauthorized Transfer of Student Loans: Navient’s Controversial Acquisition

Navient, a major player in the student loan industry, has been embroiled in controversy over the unauthorized transfer of student loans. Many students have found their loans transferred to Navient without their consent, raising questions about the legality and ethics of such practices. This article aims to shed light on this issue, exploring how Navient managed to acquire these loans and what it means for affected students.

Understanding the Role of Navient

Navient Corporation, a U.S. corporation based in Delaware, is a servicer of student loans. The company was formed in 2014 by the Sallie Mae Bank’s split into two distinct entities: Sallie Mae Bank, focusing on consumer banking, and Navient, specializing in loan management, servicing, and asset recovery.

How Did Navient Acquire Student Loans?

Navient’s acquisition of student loans primarily stems from its role as a loan servicer. When a student takes out a federal loan, the Department of Education assigns a loan servicer to manage the loan. This servicer is responsible for collecting payments, providing customer service, and performing other administrative tasks related to the loan. Navient is one of the companies that the Department of Education contracts to perform these services.

When Navient was formed, it took over the servicing of many loans from Sallie Mae. This transfer did not require the consent of the student borrowers because the terms of the loans remained the same; only the company managing the loans changed.

The Controversy Surrounding Navient’s Acquisition

The controversy arises from allegations that Navient mishandled the loans it acquired. The Consumer Financial Protection Bureau (CFPB) and several state attorneys general have filed lawsuits against Navient, accusing the company of making serious mistakes in its loan servicing practices. These alleged mistakes include incorrectly applying payments, failing to act on complaints, and providing misleading information to borrowers.

What Does This Mean for Affected Students?

For students whose loans were transferred to Navient, the allegations against the company are concerning. If Navient did mishandle their loans, these students could have paid more than they needed to, or their credit could have been negatively affected.

Students who believe their loans were mishandled by Navient should contact the company to try to resolve the issue. If that doesn’t work, they can file a complaint with the CFPB or their state attorney general’s office.

Conclusion

The controversy surrounding Navient’s acquisition of student loans highlights the importance of transparency and accountability in the student loan industry. As the lawsuits against Navient proceed, they will hopefully provide more clarity about the company’s practices and what it means for affected students.