A memo released from inside Navient shows that borrowers are rigged into forbearance so a greater amount of interest can grow on the debt. This came out during the ongoing lawsuit between the Consumer Financial Protection Bureau (CFPB) against Navient for allegations that Navient purposely encouraged student borrowers towards options ill suited for their financial situation.
The Problem with Forbearance on Student Loans
When a borrower goes into forbearance, they temporarily stop making payments or make reduced payments, likely due to an inability to make enough income. After 6 months of graduating, students are expected by the loan provider to start making payments.
Many students struggle to find a steady job, if not a career in their field, immediately when they leave school. While the borrower struggles to get their finances in order, the debt grows larger. As a result, borrowers find themselves paying off a debt that hasn’t reduced after several years. In many cases, the debt has become bigger.
Navient’s Unethical Treatment of Student Loan Borrowers
Navient is one of the government agencies hired by the Department of Education to collect on federal loan debts. They have faced similar lawsuits for mistreating, misinforming, or misdirecting student borrowers towards options that are more detrimental than beneficial to their situation.
The leaked memo only proves further that Navient routinely uses practices that prey on borrowers, especially those of low-income who are unable to make monthly payments towards an egregious amount of debt. They would rather entrap borrowers in a never ending cycle of debt and repayments than assist them, as their job would entail.
Get Help from a Miami, Florida Student Loan Debt Attorney