Consumer complaint received 2018-11-27
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Navient Solutions, LLC. (WI)

1 ) Navient provides misleading information to customers about their payments. Every time I made an overpayment, a pop up box would prompt me to indicate how I would like my payment applied. The pop up box was misleading. It said something like " would you like to not have another payment until [ due date approximately two months ahead ] or would you like your payment due on [ next regular due date ]. '' I no longer have an account with them, so I can't exactly recreate the prompt, but it really made it seem like there is a huge advantage to having your payment be due farther in the future. And no advantage to just paying extra and then having your bill come due again right away. The prompt doesn't even include the word principal. And the prompt certainly doesn't indicate that by applying an overpayment to the PRINCIPAL, you will reduce the overall amount of interest that you pay over the course of the loan. This prompt appears to be designed in a self-serving fashion to guide borrowers to continue paying the highest amount of interest, rather than paying down the principal to reduce interest in the future. 

Other loans I have use a simple radio dial to indicate if you want your overpayment applied to the principal or to cover the next payment. The word principal is always used. This is a balanced and informative choice. Do you want to pay down the principal or do you want to pay ahead on your next regular payment? 

Every mortgage servicer I have worked with ( several! ) automatically applies overpayments to the principal unless you indicate otherwise. This is standard practice because most people want to pay their loans off faster if possible to avoid paying more interest in the long run. 

I'm deeply concerned that Navient works with many first-time borrowers who are not experienced with loan payments, and their prompt is worded in a way that is counterintuitive and makes it seem like there is no advantage to paying more now and just having another payment due right away. Of course paying down the principal is a big advantage and all borrowers need to know what principal is, and if they don't know use the word anyway so they will look it up and find out. When I took out a mortgage at age XXXX, I needed to learn about principal. My mortgage lender did not mislead me. They made it clear that if I pay down the principal, my loan will end sooner and I will pay less interest in the long run. A student loan servicer that students are forced to deal with for their federal student loans should be MORE helpful and transparent than a run-of-the-mill mortgage servicer. Not less. I think it's unacceptable that federal student loans are still being processed by Navient considering all the many many many problems they have. 

2 ) I also had a lot of trouble getting Navient to disclose how much interest I was being charged each period ( again, something that has been clear as day with every other loan servicer I have ever worked with ). Navient 's interface just shows your balance, what your last payment was, and what the next payment due is. Even after calling their customer service and emailing, it took multiple contacts before anyone could point me to my actual monthly statement which was buried in a nearly impossible to find series of links within links within strangely-labeled links. The process was something like, click on account info, then FAQ, then communications, then summary, then... and eventually somewhere in there the monthly statements can be found. Again, in the interest of transparency, there should be a clearly labeled link called " monthly statements '' or alternatively under documents, the first thing listed should be " monthly statements. '' Burying the monthly statements makes no sense.

3 ) As a final note, when I found a way to refinance my student loans for the exclusive purpose of changing loan servicers, it was difficult to get my loan payoff document. Again, it was buried and required multiple contacts to get my bank the right document. Again, under documents, the last link on the list should be " loan payoff letter '' and it should be easily accessible so that people can escape Navient. It took so long to obtain a loan payoff letter from Navient that my refi application nearly expired before I was able to finalize the new loan. Congress needs to take responsibility for working with a very poor loan servicer and forcing potentially inexperienced borrowers to navigate Navient 's deceptive practices.