Review the following questions and find what you need to know about consolidating student loans.
Student loan consolidation allows borrowers to combine multiple loans into a single, new loan with a new interest rate, repayment options and terms.
Navient said in subsequent statements Wednesday that allegations by the Illinois and Washington attorneys general were also politically driven and “unfounded.”“Time will tell” what impact these lawsuits have on borrowers, says Betsy Mayotte, director of consumer outreach and compliance at American Student Assistance, a nonprofit that helps students pay for college.
“Time will tell” what impact these lawsuits have on borrowers, says Betsy Mayotte, director of consumer outreach and compliance at American Student Assistance, a nonprofit that helps students pay for college. Among other things, the CFPB alleges that since at least January 2010, Navient misallocated payments, steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release. Consumer Financial Protection Bureau is suing Navient Corp., the nation’s largest student loan servicer, accusing it of “systematically and illegally failing borrowers at every stage of repayment,” according to a press release Wednesday. The CFPB is asking Navient to compensate the borrowers the agency says were harmed.It is possible to switch student loan servicers through federal consolidation or student loan refinancing.But you shouldn’t consolidate or refinance solely to switch servicers because there are potential risks associated with each, says Adam Minsky, a Boston-based lawyer specializing in student loans.In addition to Navient, other major federal loan servicers include Fed Loan Servicing, Great Lakes Higher Education Corporation & Affiliates and Nelnet.
When it comes to student loan servicing, “consumers cannot easily take their business elsewhere,” Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement Wednesday.You can sign up for the above options on your own for free.But some companies that aren’t affiliated with the Department of Education capitalize on subpar student loan servicing practices by charging fees to enroll borrowers in free federal student loan programs.You can get one free credit report every year from each of the three major credit bureaus.Student loan servicers are supposed to help you understand the various student loan repayment options.The student loan giant, which broke off from Sallie Mae Bank, one of the largest lenders of private student loans, in 2014, currently services more than 0 billion in federal and private student loans for more than 12 million borrowers.