Recently Navient was sued by the Consumer Financial Protection Bureau and the complaint alleged a number of student loan servicing failures. Christopher Meyer, a disabled veteran, contact me about his experience and said, “I read the complaint filed in federal court. I felt like the CFPB were directly referencing me on page four of the complaint.”

The part of the lawsuit that rung true for Meyer was the section “[Navient] Harmed the credit of disabled borrowers, including severely injured veterans: […] Severely and permanently disabled … veterans … have a right to seek loan forgiveness… Navient misreported to the credit reporting companies that borrowers who had their loans discharged under this program had defaulted on their loans when they had not. This potentially caused damage to their credit reports.”

Meyer was kind enough to take the time to submit this guest post in hopes of informing others about the struggled he faced. It is unclear if the issues that Meyer had are terribly widespread but what seems to be a common theme among a large number of consumers is intense frustration in dealing with this massive student loan servicing organization.

My Experience Dealing With Navient as a Disabled Military Veteran

by Christopher Meyer

I am a total and permanently disabled veteran and being compensated at the 100% rate. I served my country in the U.S. Army from September, 2002 to September 2009. I served my country with honor in Iraq from 2008 to 2009.

On January 23, 2014, the Department of Veteran Affairs graciously granted me compensation at the 100% rate as well as totally and permanently disabled due solely to my service-connected disabilities. The VA granted me an effective date of March 10, 2013.

The next day on January 24, 2014, I properly submitted a total and permanent disability discharge application to the Department of Education.

It took just over a month, but on March 3, 2014, the Department of Education granted me a total and permanent disability discharge of my federal student loans. The effective date of the discharge was that same day, March 3, 2014. The Department of Education instructed the holders to discharge my loans. This was due solely to disabilities incurred from service to my country while serving in Iraq.

Needless to say, I was relieved. Many of my federal student loans had been forgiven. However, and unbeknownst to me, Navient decided to not properly discharge a couple of my debts. Under Federal Law, this debt forgiveness was not allowed to be reported as negative information, yet that is exactly what happened. A couple months passed, then on May 1, 2014, USA Funds c/o Navient reported to my credit agencies “Paid, was a collection account, insurance claim or government claim or was terminated for default.” I was impacted negatively. I did not learn about this until later.

A few weeks later on May 30, 2014, USA Funds reported to my credit agencies “120 days late” for a federal student loan with an original balance of $3,860. Again, my credit worthiness was coming under reckless indirect fire by Navient. I thought the days of receiving incoming “indirect fire” were behind me somewhere in Baghdad. June 1, 2014 came and USA Funds reported “Paid, was a collection account, insurance claim or government claim or was terminated for default.” More indirect.

The final blow came to me on June 6, 2014, when USA Funds c/o Navient reported “120 days late” for a federal student loan with an original balance of $2,268. This had left severe damage to my credit report caused by Navient.

On October 6, 2014, while reviewing my credit report, I noticed that “USA Funds” had reported negative information on my credit report that had sat there for five months. I had not received any letters from USA Funds c/o Navient stating that I had accounts in collection on my credit report. Yet, this is what was reported.

It was not until this month in October 2014 that I became aware that negative information had caused damage to my credit report. I was shocked that USA Funds c/o Navient reported on May 30, 2014 that my payment was “120 days late” when the Department of Education alerted the lenders that my debt was forgiven on March 3, 2014. My discharge was only 88 days old. How could Navient get away with saying that my account was “120 days late,” unless Navient was simply misrepresenting facts or taking serious shortcuts? Throughout this letter, I am intentionally mentioning the dates of letters, receipt of certified mail and return receipts. The reason I am doing this is to show that the “120 days late delinquency” simply does not fit anywhere in my discharge process. I did not know it until then, but Navient had recklessly and negligently fired a volley of indirect rounds at my credit worthiness. I was given no notice from USA Funds c/o Navient that such a serious delinquency would be reported to my credit agencies. The good news was that Navient’s indirect fire was poorly aimed, but the damage was already done.

I quickly fired back! I fired off a certified letter to USA Funds c/o Navient with supporting documentation from the VA and stated that I should not have negative information on my credit report. I included a cover letter plainly stating the issue.
Very politely I stated:

“I am a totally and permanently disabled veteran from the Iraq war. Due to my service connected disabilities, the Department of Veteran Affairs and Nelnet (Disability Discharge) approved my student loan forgiveness.

Unfortunately, two loans were not properly forgiven and negatively damaged my credit report. I spoke with Nelnet (Disability Discharge) and they instructed me to write your office to clear up this matter.

Request: please ask the three credit bureaus to remove the incorrect negative information from my credit report.

I have attached the necessary evidence in this letter as per my conversation with Nelnet.”

I included printed screenshots from my credit report, account numbers, discharge letter from the Department of Education, and my Award Letter from the Department of Veteran Affairs confirming the Total and Permanent status.

Two weeks passed and I had not heard anything, then finally I received my certified return (green card) in the mail that someone at USA Funds c/o Navient had received my certified letter.

Five more days had passed. On October 25, 2014, I received a letter from “USA Funds c/o Navient.” The letter stated that Navient was not able to verify my legal rights to my dispute. I HAD ALREADY FREAKING SENT THEM MY VA AWARD LETTER VIA CERTIFIED MAIL and I had a Navient employee’s signature on the certified return receipt confirming receipt of the VA Award Letter. Again, the letter from Navient stated they were “not able to verify my legal rights to my dispute.” The signature block of the VA Award Letter was signed by the Director of the VA Benefits Assistance Service and had a phone number. Was it really that painful for Navient to simply pick up the phone and call the VA? Navient just needed to simply make a phone call to verify. Instead, Navient instructed me to submit additional documentation.*

The same day, I resubmitted the exact same documentation along with additional documentation via regular mail. I made a special trip back to the post office on November 3, 2014 to resend everything certified. The certified letter was received by Navient on November 7, 2014.

Finally, on November 15, 2014, I received a letter from Navient acknowledging that “the entries made by United Student Aid Funds, Inc. (USA Funds) should not appear on your credit report. A request has been submitted to the national credit bureaus to have the entries for USA Funds deleted from your credit report. […] Navient Corporation and its subsidiaries are not sponsored by, or agencies of, the United States of America.” I was glad that the errors were corrected. The last part of the letter, Navient disclaimed affiliation with the U.S. Government. Again, I am still in shock at how they knowingly misrepresent facts.

It took me 9 months and 23 days from my discharge date and three certified letters to get Navient to acknowledge and correct their mistake. On top of that, Navient provided bad information to the credit reporting agencies, failed me, as the borrower, at every stage. i.e. Navient reported I was “120 days late” when that statement fits nowhere in my discharge case. The date of my discharge and the “120 days late delinquency” were less than 120 days of each other. I had to send three certified letters and more than sufficient documentation just to get Navient to act on my complaints. Navient took shortcuts by deceptively reporting my forgiven debt was a “collection account.”

If Navient claims to have a superior track-record of helping student loan borrowers, then I must be the exception to the rule.

*34 CFR 685.213 – Total and permanent disability discharge. (c) Discharge application process for veterans who are totally and permanently disabled. “…The application must be accompanied by documentation from the Department of Veterans Affairs showing that the Department of Veterans Affairs has determined that the veteran is unemployable due to a service-connected disability. The Secretary does not require the veteran to provide any additional documentation related to the veteran’s disability….” (I was being asked to provide “additional documentation” even though I already submitted this documentation. Navient is flaunting the Code of Federal Regulations.).