Consumer: Loan Servicer Mistakes Are Costly

Update: After airing Cleota Epps' story on student loan repayment issues, Navient has started to help her out. Epps said a representative called and told her the payment that was supposedly missed was just posted to the wrong account. Her account is now cleared of all the errors, which means she can refinance her family’s home loan and be eligible for loan forgiveness in the future.

The federal government says 8 million people with student loans are in default, but some experts say the lenders can give users the runaround.

About 40 million Americans are carrying student loan debt and the federal government says 8 million people with student loans are in default.

But one woman trying to pay off her loan said she's getting the runaround. Cleota Epps thought things were going well. After all, she pays faithfully. Her payment goes electronically from her bank account every month, but, for more than a year, she's been trying to solve a problem that she's said feels like a moving target.

Epps had about $70,000 in student loans. Her loan is with one of the largest loan servicers, a company called Navient, which used to be part of Sallie Mae. She said she knew she had a problem when she received a call from Navient last year.

"They asked what I would like to do about my missed payment," she said. "Well, I was unaware of a missed payment."

Epps said, over the course of a few months, the story she heard from Navient’s representatives changed. Two payments were owed, then three, and the dates changed on the payments owed. They told her the problem was solved and then it wasn't.

Epps said she heard a different answer every time she called. She said she sent bank statements proving that every payment had been made.

"I did everything I could and they were hostile," she said.

Epps also sent Navient a letter that they Navient had sent to her, proving she had made her last 50 payments.

"I don't believe I've ever missed a payment once we started," she said. "And I have their document that shows that I haven't."

Rohit Chopra used to oversee companies like Navient for the Consumer Financial Protection Bureau. Now he's a fellow for the Center for American Progress.

"Navient used to be called Sallie Mae,” Chopra said. "Over the last 10 years, it hasn't had a great history when it comes to serving borrowers. It's been caught for discriminatory lending practices, for ripping off service members and for problematic payment processing practices."

Chopra said Epps should file complaints with the Consumer Financial Protection Bureau and the Department of Education. He said Epps isn't alone in her complaints.

"Unfortunately a lot of people are getting the run around from their student loan servicer," he said.

Epps plans to file complaints but says she can't wait too much longer because she wants to refinance her house and this is a blot on her credit report.

"I want them to take care of it," she said. "I really want them to do it soon too."

We reached out to Navient about Epps and they told us they could not comment specifically on her case or acknowledge that she is a client. They sent us this statement:

"Federal student loans offer a number of programs to assist individuals experiencing financial difficulty, and Navient-serviced customers are 38 percent less likely to default than their peers. We take customer concerns seriously and work with individuals to resolve any questions they may have about their account. If a customer is enrolled in a special payment plan, it is important to note that the payment amount can change over time; further, if a customer pays using automatic payments arranged through their bank, they may need to update those payment amounts.

We've done an analysis of the top habits of successful borrowers and would offer these general tips for anyone paying back their student loans:"

Epps said although initially, there was some mention of her payment increasing, a later representative assured her that would not start for another two years. She said she’s paying the amount she’s supposed to.

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