Consumer complaint received 2016-09-14
Product: Student loan — Federal student loan servicing
Issue: Dealing with my lender or servicer — Received bad information about my loan
Company: Navient Solutions, LLC. (VA)

In XXXX XXXX after completing graduate school, I consolidated my federal student loans into XXXX consolidation loans totaling {$34000.00} with XXXX XXXX, which are now serviced by Navient. As soon as I had the income to do so, I made arrangements to make automatic monthly payments well above ( and, if memory serves, nearly double ) the required monthly payment with the excess going towards the principle. By paying {$510.00} each month, as of XXXX XXXX I had paid down the outstanding principle to just {$2500.00}. That 's when Navient decided - without my authorization - to reduce my monthly automatic payment from {$510.00} to just {$30.00} and to extend my repayment term by 9 years to XXXX XXXX. Navient 's notification ( attached ) reads : " Federal regulations require that the length of the repayment term for the subsidized and unsubsidized portions of your consolidation loan be the same. However, a recent review of your account revealed that the repayment term assigned to each portion of the consolidation loan was different. To correct this, we aligned the repayment terms on your consolidation loan to the maximum term permitted by federal regulations, the largest number of months allowable to pay the loan in full. '' Navient noted that " If your payment was reduced and you would like to keep your existing payment, please contact us at XXXX. Paying more than your minimum payment will enable you to pay your loan off more quickly. '' No kidding. That 's precisely why I proactively made arrangements to make an automatic monthly payment well above the minimum payment years ago and why I had paid off {$31000.00} of my original principle plus interest. Had Navient not taken it upon itself to reduce my automatic monthly payments and with just five more payments of {$510.00}, all of my student loans would have been paid off by XX/XX/XXXX. Instead Navient asserted some nebulous federal requirement to justify a correction that just so happened to translate into more interest income for Navient and more hassle for me or even worse me paying an additional {$680.00} in interest on {$2500.00} if I did n't get Navient to revert to my prior repayment arrangement. After spending some time navigating Navient 's overly simplistic website to find documents ( only available by linking to the old site ), today I called for an explanation of this change. The representative initially stated that it looked like a request had been made to lower my payment. I clarified that I had not requested any reduction in my automatic monthly payment. He then stated " we were expecting them to be paid off later. '' Exactly. I was paying my loans off faster than Navient had expected thereby cutting into its expected interest income. By reducing my payment amount and extending my term, I would pay an additional {$680.00} in interest on {$2500.00} ( see attached ) instead of making just five more payments of {$520.00} and paying a few bucks more in interest. The representative was quick to process my request to revert to paying around the same amount ( {$520.00} ). However, the speed with which he happily adjusted my monthly repayment amount combined with his statement about paying my loans off faster than expected, left me with the impression that Navient is counting on its customers not following up about such changes. For me, the difference in the amount and term was dramatic, but I ca n't help wondering how many others have seen their repayment amounts drop ( and repayment terms extended ) without realizing how much more they 'll be paying over the life of the loan. Particularly when couched in terms of a nebulous federal regulation, this seems deceptive. I would like Navient to provide a citation to the federal regulation in its notice and documents showing that the subsidized and unsubsidized portions of my consolidation loan indeed differed as alleged by Navient.