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.
While the CFPB database shows that Navient’s share of complaints outpace the quantity of loans they service, the company disagrees with the data. Patricia Nash Christel, vice president for corporate communications at Navient, cites internal numbers that show that the number of complaints are proportionate to the number of loans serviced.
Between September 2015 and August 2016, “Navient serviced 28 percent of all federal student loans and yet received 21 percent of federal student loan complaint volume,” Christel also said in a written statement, citing the latest CFPB ombudsman report. “Navient services 29 percent of all private student loans, and received 29 percent of private student loan complaint volume.”
Christel added that the Consumer Finance Protection Bureau does not always distinguish between complaints and calls for help. Moira Vahey, a spokesperson with CFPB said that complaints are filed via a website and phone number that are clearly labeled as complaint portals and that companies have 15 days to verify if the complaint comes from a customer before it is added to the database.
As of June 2016, CFPB data shows that Navient serviced the third highest number of student loan recipients, but received the most complaints.
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.
Editor’s note: This post has been updated to include a response from Navient to the data cited in this piece.