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.
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 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.
If you’re facing large and ever-growing student loan debt, you need help navigating bankruptcy laws. At the Law Office of Michelle Labayen, LLC, you will get the best advice from Michelle’s 16 years of experience.
Michelle Labayen has been practicing Consumer and Bankruptcy law for more than 16 years. She is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), and the National Association of Consumer Attorneys ( NACA).
In addition, she is a Max Gardner Bootcamp graduate. Extensive experience has given Michelle a thorough understanding of bankruptcy, including:
In 2021, the Department of Education is going to reduce their 11 services down to 5 student loan servicers. According to Business Insider, the DOE outlined a plan to reduce their service in order to “better customer service.” Only 3 servicers of the original 11 will continue in 2021: Edfinancial, MOHELA, and Maximus.
We Are Living Through History. We are living through more human and economic devastation than recent memory.
We have less than 5 months to go before the presidential election.
It is expected that a conviction record should impact one’s bankruptcy case considering its effects on other matters. For example, a convicted felon can be denied the chance to apply for some jobs.
What is it? Where are we? Where do we need to go?
Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven.
Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.
You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, and Newark, NJ. Florida licensed attorney Drew Gaddis is counsel and would be representing all clients in Florida.
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