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Troops to be Reimbursed by Student Loan Company

According to the Washington Post, “thousands of troops who were charged excess interest on their student loans by Navient Solutions will start getting checks in the mail next month for up to $100,000.”Navient Solutions, which collects student loan payments and applies them to borrower debt, allegedly charged countless military servicemembers with interest higher than the SCRA-permitted 6% rate (the Servicemembers Civil Relief Act [SCRA] is a federal law which offers both legal and financial protection for those in the military). The company has since been hit with an incredible $60 million fine by federal prosecutors, which will be paid out to 77,795 military servicemembers nationwide.The checks are set to be mailed by June 12th of this year, ranging from $10 to more than $100,000 and averaging around $771. The amounts will depend on “how long the interest rate exceeded 6%, by how much, and the types of documentation the servicemember provided the government’s independent administrator last year.”In addition to this compensation, Navient is also required to work with the three major credit bureaus to remove black-marks which were caused by both overcharges on interest rates and unfair default judgments. It has also simplified the process by which servicemembers prove their eligibility under the SCRA, allowing determinations to be made via the Defense Department’s database rather than extensive paperwork submitted by person-by-person.The first signs of wrongdoing came from the Office of Service member Affairs within the Consumer Financial Protection Bureau, which had been receiving a surprising number of student loan-related complaints from individuals in the military. Prosecutors claim that Navient denied requests for borrowers’ benefits, charged three-digit sums (perhaps higher) in excess interest, and took legal action against those who fell behind on payments, all while neglecting to document their military service, which was illegal.The American Education Service oversees much of the management of over $800 billion in federal student loans, which is outsourced to eleven servicers of private debt. When Navient’s settlement was announced, AES Secretary Arne Duncan vowed that all of its loan servicers’ records would be analyzed in search of “widespread” violations, and consumer advocates and lawmakers alike have pressured the organization to release the review’s findings. They also continue to ask why Navient not only remains one of AES’s contractors, but has been provided with even more accounts and an extended contract.

Submitted Comments

Elisabeth
7 years ago
Have been involved with my loan for several years and I have had an ongoing problems. I have documentation and notes on all of them.

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