About 6 million student loan borrowers are lender-less after Navient announced it was pulling out of the federal student loan game. Now these borrowers are waiting to be matched with new lenders.
The company had an outstanding student loan portfolio totaling $ 1.7 trillion. This has made Navient one of the largest service providers in the United States with millions of individual borrowers. Two other well-known players in the student loan world pulled out this week, with FedLoan and Granite State calling on it to step down.
A total of 16 million federal student loan borrowers will be assigned a new manager in the coming months. It’s unclear how quickly this will happen, but experts warn those with loans managed by Navient should be careful of mistakes.
“Problems can arise with any transition, so there are a few things borrowers should do now if their agent changes,” Matt Kantrowitz told CNBC.
What should Navient customers do?
Log in to your Navient portal and print a copy of your loan information and statement. The most recent information you can get, as well as payment history. “Get a list of all of your loans, including your payment history, current loan balances, interest rates, and monthly loan payment amounts,” Kantrowitz added.
Another important note: keep track of any email correspondence you receive from Navient. The next few months will be paramount as the pause on student loan repayments ends in early 2022.
You can also ask for economic hardship or a deferral of unemployment if you are having financial hardship due to the coronavirus pandemic.
Will this have an impact on the “pause” in student loan payments?
The short answer is no ‘. However, progressive advocates and lawmakers say it’s time for a change. With billions of dollars in limbo – and tens of millions of borrowers affected by these outflows in the student loan services industry – Senator Elizabeth Warren called it a “broken system.”
This could actually prompt a longer break on some student loans. Persis Yu, director of the National Consumer Law Center’s Student Loan Assistance Project, told Yahoo that a monumental task is ahead. “It is a process that must be managed very slowly and deliberately, [and] I have a lot of concerns about whether or not it can be done within the time frame that we have, ”Yu added.
Navient’s replacement could be one or more different loan managers. This is a major problem since they have around 16.3 million borrowers. The current break on federal student loan payments expires on January 31, 2022.
The companies say they are working on a “smooth transition”, but that has sparked skepticism from many.
Why did Navient want to go out?
In addition to being in the crosshairs of progressive lawmakers, the company has faced major challenges. They have been criticized for directing student borrowers to expensive repayment plans. Generally speaking, they were seen as a problem in the student debt crisis in the United States, and not as an active partner in making things right for those who borrowed tens or hundreds of thousands of dollars in the hope succeed after college.
“At the end of the day, the student loan system is broken,” Senator Warren said. “The only way to ensure that borrowers don’t face the same predatory behavior from Navient’s replacement is to write off student debt, so that no borrower is held hostage by companies taking advantage of their financial distress.” . “
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