Consumer complaint received 2020-11-17
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Navient Solutions, LLC. (NJ)

Hi, After downloading an XXXX file showing all of the transactions for payments made on our student loan, it was revealed that all payments made during the five year period of XXXX - XX/XX/XXXX were only allocated towards the loan interest. This left us with {$290.00} total paid on the principal and {$5000.00} paid towards the interest. We always went with what the phone advisor suggested for repayment plans for this loan and for our XXXX XXXX. Our XXXX XXXX, which started at a similar amount, has been paid off in full since last year. Navient clearly set us on the worst possible path towards paying into their profit and never paying off the loan. 

Keep in mind that this is a FFELP loan, the interest rate is set by Congress, and we were given this based on our FAFSFA paperwork as part of our need-based student aid package, so we had no reason to believe that this low interest, need-based loan would be employing tactics to extend the amount of time we would be in repayment or keep us stuck for years only paying interest. 

The first few years of payments were confusing. Over the phone we would be told to make a double payment, then we wouldn't receive a bill for the next month. Instead, we would receive a late fee notice for the following month. This is shown with double payments on XX/XX/XXXX, XXXX, XX/XX/XXXX, XX/XX/XXXX. Each of these payments are followed by a month with no payment and a subsequent month with a late fee. 

When we started trying to get set up on direct deposit to qualify for the .25 % interest reduction rate, the online portal would do the same thing. This is shown with double payments on XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX. Each of these payments is followed by a month with no payment, and then a subsequent month with a late fee. We were told the direct deposit system had bugs and sometimes just didn't take the money out of your account, so we needed to start checking with the bank each month. Each time the system failed to take money out of your account, we were told it would self-disconnect, so we would have to go through the set up process again to keep using it. 

All of this was irritating, but it kept us focused on trying to get the payments straight and distracted us from the real issue, which was that the money we were paying was only going towards interest. 

At no point did anyone bring up the fact that making the double payment they continued to suggest ( to make up for the month that was suddenly " late '' and the next month ) was most likely putting the account into overpayment and that was the reason they were not billing us or running the direct deposit for the month after the double payment. We complained that nothing like this had ever happened on any account we had ever paid before and they acted dumbfounded. 

At no point did anyone ever ask if we would like overpayments to go towards the principal or offer us any options to have the account set up in such a way that monthly withdrawls would continue in the case of overpayment, even though it was clear that this was what we wanted. 

Once the direct deposit was working consistently on the loan, we increased the monthly payment, first to {$200.00} in XXXX XXXX more than double the payment Navient had suggested XXXX, then to {$350.00} once the other student loan was paid off. Since XXXX we have paid {$5500.00} on our principal and {$2200.00} on our interest, so Navient is still making a significant amount of money off this loan. 

Looking back at the first five years that we spent paying {$290.00} on the principal and {$5000.00} on interest just isn't right. 

That leaves us at a total of {$5800.00} paid on the principal and {$7300.00} paid in interest. Together that's {$13000.00} paid to Navient. 

However, we still owe {$13000.00} on this {$19000.00} loan. 

Navient has been caught encouraging its staff to lead people to make poor repayment choices for its own benefit, and we are clearly a victim of these practices. 

Upon contacting Navient about this issue, they replied with a letter stating that if we're having trouble making payments ( we're not ) we may qualify to make interest-only payments! This is exactly the thing we wrote to them to complain about. It is sickening that they can operate on this level of arrogance and continue to deceive people who were given loans as government aid.