Consumer complaint received 2017-07-05
Company: Navient Solutions, LLC.
State: CA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Received bad information about your loan

Complaint:
This is a complaint against Navient, formerly XXXX XXXX, servicer of my thus-far 17-year student loan. The details which follow provide evidence of the misleading practices outlined by the CFPB in a filed case against Navient Corporation.
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On XX/XX/XXXX my state university student loan was disbursed with an original principal documented as {$22000.00} ( {$19000.00} + {$2800.00} ).
Throughout the next decade, due to financial hardships and timing in getting my career path established, re-payments to XXXX XXXX could not be consistently made.
After speaking to a representative, it was said that forbearance would be my option during these initial years of {$0.00} payments, late fees, capitalized interest charges. I was not made aware of any other alternatives such as the income-driven repayment plans.
In addition, my loans would be consolidated in such a way to be interest-only at 7.375 %.
Starting in XXXX, my steady income allowed me to make consistent monthly payments.
Years later to my surprise, after reviewing my XXXX XXXX/Navient statements, I saw that my original principal amount of {$22000.00} had increased rather than decreased. I had made no dent to the principal amount borrowed.
Today, XX/XX/XXXX, the unpaid principal balance is {$25000.00} and the unpaid interest is {$380.00}.
My total Life of Loan payment export show repayments in the sum of {$25000.00}.
If I were to pay this off today ( {$25.00}, XXXX ), the total out of my pocket to XXXX XXXX/Navient would be {$51000.00}.
Had I been made aware of other repayment options ( i.e. more affordable income-driven repayment plans with its federal government interest subsidy ) vs temporary forbearance and interest-only loans at 7.375 %, this loan may well have been paid off by now or at least be that much closer to potentially qualifying for forgiveness.
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In addition to being steered toward the forbearance and interest only options, Navient processed extra payments in a way to benefit their interest gains instead of my principal loan.
On XX/XX/XXXX, I had requested an amount of {$3000.00} to pay of my 2nd consolidated loan.
Navient misallocated the payment in such a way that left the 2nd loan open to accrue interest until their set next payment due date of XX/XX/XXXX. Its current status now is No Payment Due.
Along with this improper processing, Navient automatically decreased my minimum monthly due from {$300.00} to $ XXXXenabling them to continue to maximize their interest earnings through the full pay-off date of XX/XX/XXXX.
On aXX/XX/XXXX, I noted my current loan # 2 balance to be {$2000.00} ( principal {$1800.00} + {$240.00} interest ).
Today, XX/XX/XXXX, the unpaid balance of this 2nd loan has increased to {$2100.00} ( principal {$1800.00} + {$280.00} interest ).
The original amount borrowed on this 2nd loan was {$2800.00}.
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On two other occasions, I had included additional amounts to cover subsequent months due to my being out of town. XX/XX/XXXX( two months payments ) and XX/XX/XXXX( 4 months payments ) -- I recall issues of having to contact XXXX XXXX to tell them which months to apply the paid-ahead amounts ( vs charging late fees for no payments received ).
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Both of these Navient-consolidated, interest only student loans are now causing issues with obtaining a mortgage. Our lender states that this student loan must be paid off in order to be approved for our budgeted neighborhood home near family. Even after paying the now-due {$25000.00} current balance off, it would leave us that much short on our down paymentcausing us to be required to pay mortgage insurance.
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In XXXX, I took steps to do something about my increasing principal balance. I tried to apply for student loan forgiveness. However, it wasnt made easy. I was somehow referred to a 3rd party who spoke as if they were contractors with the Department of Education. XXXX XXXX XXXX XXXX ( XXXX ) ended up charging me {$690.00}. It was mentioned that even though an increasing principal balance would remain on my record for the next few decades, the debt would be forgiven based on proven income limits year after year. After reading the fine print of their contract, and researching such forgiveness plan that would reset my repayment year to 0, I did cancel their service within the 3-day timeframe to do so.
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I also tried avenues of refinancinghowever, my understanding is that federal loans would lose their protections if refinanced to a private lender.
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Obtaining the CFPB 's advice on how to proceed, or being included in the case filed against Navient, would be beneficial in obtaining relief of my current student loan debt.

Company response to consumer: Closed with explanation