Watch tonight’s PBS NewsHour for a special investigation into student loan debt, in partnership with Frontline and MarketPlace.
About 41 million Americans carry more than $1.3 trillion in outstanding student debt. And millions “needlessly fall behind” on this student loan debt, says Seth Frotman, student loan ombudsman for the Consumer Financial Protection Bureau, established in 2010 to manage the aftermath of the Great Recession.
In 2012, Frotman’s agency created a database to collect and store people’s complaints about student loans.
“With one out of four student loan borrowers struggling to repay their loans or already in default, cleaning up the student loan servicing market is critical,” Frotman said.
At first, the student loan database was limited to private companies, but starting in February, it expanded to include complaints about federal student loans.
And of all complaints lodged with the bureau since March 2012, four out of 10 involved one company: Navient Solutions, Inc., one of the nation’s largest student loan servicers. This is based on a NewsHour analysis of the publicly available database of 20,797 complaints. By comparison, AES/PHEAA held the second largest number of customer issues but represented only 12 percent of total student loan complaints, according to the bureau’s database.
Student Loan Companies with Most Complaints
Navient Solutions, Inc.
Wells Fargo & Company
JPMorgan Chase & Co.
Percent of total CFPB student loan complaints, March 2012-Oct. 2016
Source: Consumer Financial Protection Bureau public database
Of the 8,354 complaints against Navient, the most frequent — one in five – were people who had problems repaying their loans. Other common complaints included problems with customer service (15 percent) and trouble lowering monthly payments (11 percent.)
In response to the NewsHour’s questions about Navient’s business practices, the company issued this statement earlier this month:
Navient is a leader in income-driven repayment plan enrollment: we’ve helped to triple national enrollment to almost 6 million customers. Contrary to reports, forbearance is often a required tool to help people enroll in IDR plans—in fact nearly 70 percent of IDR borrowers needed forbearance so they could bring their accounts current and give them payment relief while they completed the government’s application process. To help more borrowers, we have advocated for simplifying repayment plans and streamlining the enrollment process. Navient-serviced borrowers have been well served by our practices and outreach strategies, and are 31 percent less likely to default than their peers. We welcome policymakers to our servicing center to meet our dedicated team members and learn first-hand about how we drive these positive results.
Among nearly 300 companies, Navient included, the most common complaint — about one in five — was the inability to repay the loan, followed by trouble with how payments were handled and difficulty decreasing monthly payments.
NewsHour Coordinating Producer Sandy Petrykowski contributed to this report.
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