Consumer complaint received 2022-01-30
Company: Navient Solutions, LLC.
State: VA
Product: Student loan
Sub-product: Private student loan
Issue: Struggling to repay your loan
Sub-issue: Can't get other flexible options for repaying your loan

Complaint:
I received five Signature Student Loan disbursements from XXXX XXXX from XXXX to XXXX totaling to {$67000.00} : Loan XXXX disbursed for {$3900.00} with 12.875 % interest Loan XXXX disbursed for {$8000.00} with 12.875 % interest XXXX disbursed for {$15000.00} with 8.625 % interest Loan XXXX disbursed for {$20000.00} with 3.75 % interest Loan XXXX disbursed for {$20000.00} with 15.125 % interest I graduated XXXX in XX/XX/XXXX and started making payments in XX/XX/XXXX. Over the life of the five loans, XXXX XXXX sold this debt to Navient, and I have made a concerted effort to satisfy this debt by making 326 payments totaling to {$39000.00}, however, due to capitalized interest, these loans have increased by 222 % and now has an outstanding balance of XXXX. 

After speaking to countless XXXX XXXXNavient customer service representatives, supervisors, and managers to understand why the principal amount has increased by 222 %, I recently learned that over the past 9 years, every time I contacted XXXXXXXX XXXX/Navient XXXX XXXX XXXXNavient contacted me to discuss an affordable payment plan due to financial hardship, attending graduate school, relocating across the country, and job loss, I was steered to sign up for forbearances disguised as reduced interest rate repayment plans. 

As a result, the interest accrued was capitalized to my principal loan balance and increased my expected payoff date by over 30 years. Now I have found myself in an impossible predicament and life-long financial hardship due to unfair, deceptive, and abusive student loan servicing practices. Due to forbearances, I have paid {$22000.00} towards interest only, which prevented me from paying down the principles of the loans and forced me into a never-ending cycle of interest payments. I have attached seven excel spreadsheets that will provide insight into this situation. 

The spreadsheet titled All Loans contains a summary of activities on all loans to-date, which derived from Navients website. The spreadsheets called XXXX XXXX, XXXX XXXX, XXXX XXXX, XXXX XXXX, and XXXX XXXX contain a summary of activities for each individual loan, also from Navients website. Finally, the spreadsheet titled Loan Summaries & Est. Pay Off contains the following calculations : A. Hypothetical breakdown of each loan no forbearance B. Current breakdown of each loan with forbearance C. Hypothetical breakdown of estimated interest & principal pay off in years no forbearance D. Current breakdown of estimated interest & principal pay off in years with forbearance E. Proposed resolution I am currently paying Navient {$1400.00} per month which is 55 % of my net monthly income. According to column F in Calculation D., after I satisfy the monthly accrued interest of {$1100.00}, the difference of {$310.00} is then allocated towards the outstanding amount of interest today of {$22000.00}. It would take me an average of six years to pay the outstanding interest, which is required before I can pay down the principal. So, on average, I would not be able to make principal payments towards any loan until XXXX. Furthermore, due to a 222 % increase on the principal balance from forbearances, only 21.47 % of my monthly payment would be applied to the outstanding principal today of {$120000.00}. This means it would take me an average of the next 42 years to pay off all these loans. In 42 years, I will be XXXX XXXX XXXX and would have made student loan payments for most of my life. 

According to column F in Calculation A., if no forbearance was applied during the life of the loans, in nine years time ( 108 months ), the total outstanding interest of all loans would have been {$59000.00}. When you apply the current interest-paid-to-date to the non-forbearance outstanding interest-to-date, you have an outstanding interest of {$26000.00} ( see column B in Calculation XXXX ). The total monthly interest on {$26000.00} is {$550.00}, so if you apply the same monthly payment of {$1400.00}, the amount after the monthly interest is satisfied is {$920.00}. If I was not steered into forbearance by XXXX XXXX and Navient Representatives, it would take me an average of the next 2.44 years to pay off the outstanding interest, and an average of 8 additional years to pay off the outstanding principal of {$61000.00}. In 10 years, I will be XXXX XXXX XXXX and would have paid loans for almost half of my life. 

Had XXXX XXXX and Navient not used fear tactics and predatory lending practices to steer me into accepting forbearances, I would not be trapped in a cycle of debt, preventing wealth-building opportunities for the next 42 years. 

I have tried to fix this problem with Navient, however, Navient has continued to steer me in the direction of forbearance. Most recently, when I contacted Navient on Tuesday, XX/XX/XXXX to postpone my future payments to pay for my car repairs and so I can save up for future emergencies, the representative threatened to take me to court if I do not make a payment. I received another call on XX/XX/XXXX, by XXXX, the Navient representative on my account, stating that if I wanted to help my situation, I could bring my loans current with the Three Pay Program or a reduced interest rate payment plan. Of course, she did not disclose the consequence of capitalized interest until I asked. 

Over the years, I trusted XXXX XXXX  and Navient to provide me with financial guidance to help me develop a repayment plan that would not stifle my financial goals, so I can build wealth building opportunities for my family. However, I was steered into forbearances without receiving all of the information and details surrounding capitalized interest. As a result, it would take 42 years to satisfy this debt.

Company response to consumer: Closed with explanation