Student debt can accumulate fast, and knowing the inefficient nature of student lending corporations can help you avoid paying unnecessary fees and stop you from acquiring additional debt. Navient, the largest student loan company in the U.S., has just recently been sued for a laundry list of malpractices. The lender was cited for creating unnecessary obstacles for borrowers, incorrect payment processing, misinformation, and cost cutting at every corner. The importance of defending yourself is very high as your credit score is at stake. There are several steps you can take to ensure you’re not letting these companies lock you into paying predatory student loans.
Ways to Avoid Getting Slammed by Predatory Student Loans
- Set up Autopay: Setting up autopay ensures that the lending company will get the payment on time every time, and no egregious late fees or additional debt will be accumulated. You can expect your loan provider to change at least once, so make sure once the company changes you update your autopay information with the new company and stop payments to the old one.
- Record your correspondence: Communicating through email with the company leaves documentation of what was said and when, and the appropriate party can be held accountable that way. If you are calling the company and not writing down what was said and when, that correspondence can fall through the cracks, and the company may get away with not processing a payment on time and charging a late fee, for example. It’s always better to have more materials to support your case if trouble arises.
- Check your credit score and credit reports like a hawk: The loan provider must report your payment information to major credit bureaus. Too many times have loan companies reported false information to the bureaus, causing mistakes on your credit report which are costly and difficult to diffuse. Frequently check your credit report by requesting a copy of your credit report from each of the three major credit bureaus, Experian, Equifax, and Transunion. There is also a number of online options for obtaining your credit report. If you find a mistake write a detailed report of the error and send to both the credit bureau the lending company. You should also contact the Office of Federal Student Aid if you feel the lending company is treating you unfairly.
- Know Your Options: It is the responsibility of the loan servicer to give you options for your unique financial situation, but you can’t expect them to have your personal best interests at heart. Do some research to find out more about loan refinancing, loan consolidation, income-driven repayment plans, and student loan forgiveness.