Guide

Who Qualifies For Relief, And What To Do

Who Qualifies For Relief, And What To Do
Written by Publishing Team

Yesterday, 39 state attorney general’s offices announced that a settlement had been reached in the ongoing lawsuit against Navint

Navi
One of the largest student loan providers in the country.

The settlement aims to resolve claims that Navient allegedly improperly directed some federal student loan borrowers into patience — in place of federal student loan benefit programs such as Income-Based Repayment and Public Service Loan Forgiveness (PSLF) — and issued special high-interest student loans to enrolling borrowers. In predatory, for-profit schools where they are unlikely to succeed or be able to repay their loans. Navient has consistently denied any wrongdoing, and the company has not admitted any liability as part of the settlement agreement.

The settlement agreement includes provisions for student loan forgiveness for some of Navient’s private student loans, and modest compensation for some federal student loan borrowers. Here’s what you need to know.

Student loan forgiveness for some private student loans

Navient’s settlement agreement provides for the cancellation of a $1.7 billion private student loan. Details here:

  • Only certain private student loans issued by Navient or its predecessor Sallie Mae.
  • Eligible borrowers must have attended some for-profit educational institution such as Corinthian Schools, DeVry University, Polytechnics, ITT and others.
  • Student loans must have been disbursed between 2002 and 2014.
  • Student loans must be past due (deferred) for at least seven monthly billing cycles before June 30, 2021.
  • In most cases, loans that are still collectible under applicable statute of limitations, or that are still reported to credit bureaus, as of June 30, 2021, are eligible.
  • Borrowers must live in specific states covered by the settlement. Many countries will qualify, but not all.

Federal student loans are not eligible for cancellation under the settlement. But those borrowers may qualify for Borrower Defense to Repayment, a federal student loan forgiveness program that can cancel federal student loan debt for borrowers who have been defrauded by their school.

Compensating some federal student borrowers

While federal student loans are not waived or canceled under a settlement agreement with Navient, many borrowers will receive a modest financial award called a refund. About 350,000 borrowers will be eligible for about $95 million in compensation, which comes to about $260 to $270 per borrower. There are eligibility criteria:

  • Borrowers must have made repayment of the Federal Direct or FFEL Student Loan prior to January 2015.
  • Borrowers must have had at least one federal student loan that was eligible for the income-driven repayment between October 2009 and January 2017, but were instead directed to patience as a result of a phone call with a Navient customer service agent. The borrower should not have entered into an income-driven repayment plan prior to that patience.
  • The patience must have lasted at least two consecutive years. At least half of the patience must have deferred payments forward, as opposed to retroactively tolerating an account that is late in payment.
  • Borrowers must reside in one of the following states: AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, IL, IN, KY, LA, MA, MD, ME, MN, MO, NC, NE OR NJ, NM, NV, NY, OH, OR, PA, TN, VA, WA, or WI.

Do student loan borrowers need to do anything to get relief under the marine settlement?

The relief offered under the Navient Student Loan Adjustment will be distributed automatically. Borrowers must be notified sometime this summer if they qualify. All borrowers need to do is make sure their contact information is up-to-date, particularly with the Federal Student Loan Service and StudentAid.gov, the Department of Education’s federal student aid website. There is no application process for borrowers to request an exemption.

For more information, borrowers can visit www.NavientAGSettlement.com, and they can also contact the state attorney general’s office (some have set up specific websites to help guide residents).

Further reading Student loan

4 signs that student loan cancellation isn’t on the table

Student Loan Forgiveness Updates: New Changes Coming in 2022 for Public Service Borrowers

Want to ask forgiveness for a student loan? This is a roadmap

$2.4 billion in student loan forgiveness for 38,000 borrowers in the pipeline, says Department of Education

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