What's in the Navient student loan settlement agreement?
The settlement agreement includes provisions for student loan forgiveness for certain Navient private student loans, and modest restitution for some federal student loan borrowers. Here’s what you need to know.
What is Navient’s lawsuit?
Navient Corp., a major servicer of private and federal student loans, is facing six lawsuits alleging that it harmed student loan borrowers throughout the repayment process. The suits are still pending and could take years to conclude. In the meantime, here are answers to common borrower questions: What is the Navient lawsuit?
Who will get relief from Navient's $1 billion settlement?
Washington (CNN) More than 400,000 student loan borrowers will get some debt relief from Navient, according to a $1.85 billion settlement agreement announced Thursday.
How does Navient affect your credit report?
“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.” How does the Navient lawsuit affect my student loans? The majority of these lawsuits are ongoing, which means that your student loans won’t see much — if any — impact.
See more
Who will get money in Navient settlement?
Only about 66,000 borrowers are actually going to reap the benefits of the Navient settlement—specifically, those who took out private student loans through Sallie Mae from 2002 to 2010 to attend certain for-profit schools.
Who will get loan forgiveness from Navient?
To qualify for the $10,000 forgiveness, individual borrowers must earn less than $125,000 a year, or less than $250,000 a year for couples. To qualify for the $20,000 forgiveness, borrowers must meet those income requirements and must have received a Pell Grant in college.
Who is affected by Navient?
The cancellation affects borrowers with private student loans originated by Sallie Mae between 2002 and 2010 that have defaulted and were charged off. The settlement will cancel the remaining balances, totaling about $1.7 billion, for borrowers who attended for-profit colleges with very low graduation rates.
Is Navient Cancelling my student loans?
Best Covid-19 Travel Insurance Plans In January, Pennsylvania Attorney General Josh Shapiro announced that Navient agreed to cancel $1.7 billion in subprime private student debt owed by 66,000 student loan borrowers, primarily at for-profit schools such as ITT Technical Institute and the Art Institute.
How do you know if you get the student loan forgiveness?
Individual borrowers who make less than $125,000 yearly and married couples or heads of households who make less than $250,000 yearly will have up $10,000 of their federal student loan debt forgiven if they did not receive a Pell grant as an undergraduate student, per the FSA website.
How do I know if my student loans are being forgiven?
Borrowers eager to know where their FFEL loans are held can go to Studentaid.gov and sign in with your FSA ID. Then go to the “My Aid” tab, and search for your loans. (At press time, access to the site was subject to long waits.) Even if your FFEL loan is commercially held, all hope may not be lost.
How will I know if I qualify for Navient settlement?
Here are the eligibility criteria: You must have borrowed a private student loan from Navient or its predecessor, Sallie Mae, between 2002 and 2014 while attending certain for-profit schools like the Art Institute, ITT Technical Institute, and others. You can see a full list of schools at navientagsettlement.com.
How do I know if my student loans will be forgiven by Navient?
1:5911:13How to Find Out If Navient Loans Will Be Forgiven - YouTubeYouTubeStart of suggested clipEnd of suggested clipLook at your account. And once you log in you should see something that says like tuition.MoreLook at your account. And once you log in you should see something that says like tuition.
What states are included in Navient lawsuit?
Based on publicly available information, Navient's business practices garnered scrutiny from State AGs, the federal government, and the plaintiffs' bar, including:A multistate AG investigation;Lawsuits filed by California, Illinois, Mississippi, New Jersey, Pennsylvania, and Washington;More items...•
What schools were included in the Navient lawsuit?
Student Loan Forgiveness For Borrowers Covered By New Settlement AgreementAmerican Career Institute.Argosy University.The Art Institute.Charlotte School of Law.Colorado Technical University.DeVry University.ITT Technical Institute.Kaplan College.More items...•
Which states are in Navient settlement?
These following states, and the District of Columbia, are included in the settlement: Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, ...
How do I know if my Navient student loan is federal or private?
But if you're still unsure about whether your student loan is federal or private, the best way to find out is by logging in to studentaid.gov with your FSA ID. All federal loan information is housed there. If you don't find your loan information through studentaid.gov, you have a private student loan.
What kind of student loan is Navient?
Navient is a private corporation created by Sallie Mae to service and collect student loan debt. At one point, Navient was one of the country's largest student loan servicing companies. It handled three types of loans: Federal student loans owned by the U.S. Department of Education (e.g., Direct Loan Program loans).
Where did my Navient student loans go?
If you had Navient federal student loans owned by the US Department of Education, your loans have moved to a new loan servicer. In 2021, Navient exited the federal student loan servicing industry, transferring its caseload of 5.6 million student loans to Aidvantage, which is owned by student loan giant Maximus.
Details of the Settlement
According to the terms of the settlement, Navient will forgive $1.7 billion in private student loans for about 66,000 borrowers. An estimated 350,000 federal student loan borrowers will receive restitution payments of about $260 each.
Are You Eligible for Compensation?
There are several different groups that qualify for different amounts and types of relief as a result of the settlement. As for the $1.7 billion in private loan debt being canceled, only a narrow portion of loans will qualify.
What to Do If You Qualify
Though the terms of the settlement are complex, qualifying borrowers won’t have to do anything to receive compensation except to make sure they create an account or have their contact information up-to-date at StudentAid.gov.
What are the Navient lawsuits?
They also allege that Navient, when it was part of Sallie Mae, made subprime loans to students, particularly those attending for-profit schools.
When will Navient end student loans?
Navient is expected to end its federal student loan servicing contract after December 2021.
Is Navient a CFPB?
The CFPB is asking Navient to compensate the borrowers the agency says were harmed. Navient believes the CFPB’s claims are “unfounded," and says the suits are based on new servicing standards that are being applied retroactively, according to an October 2017 fact sheet. More details about the Navient lawsuits.
When was Navient memo written?
In September 2019, the lawsuit uncovered an internal memo that shed light on Navient's strategy for collecting loan payments. It was written in 2010 by a senior director at Navient's former parent company, Sallie Mae. On the topic of forbearance, the memo indicated, "Our battle cry remains 'forbear them, forbear them, ...
Does Navient self report?
Navient is expected to self-report on its compliance with these new practices, but it’s not clear to whom.
Does Navient recognize PSLF?
Under the new agreement, Navient will train its customer service representatives to recognize words and phrases that indicate a borrower might be eligible for PSLF or another loan repayment plan.
What are the Navient lawsuits?
Since 2017, Navient has seen its fair share of lawsuits. Here’s what to know about which lawsuits have been resolved and which are ongoing.
What lawsuit was filed against Navient?
A New Jersey lawsuit filed in October 2020 alleges that Navient pushed borrowers into taking out private student loans with co-signers — even if it wasn’t in the best interest of the borrower.
How do the Navient lawsuits affect my student loans?
Thousands of borrowers will see their student loans impacted in one way or another due to the recent Navient settlement, whether through loan forgiveness, restitution payments or better customer service. Borrowers don’t need to do anything in order to receive the settlement restitution or forgiveness aside from checking and updating their residential address.
What is forbearance in Navient?
The suit alleges that Navient steered borrowers into forbearance over other options, like income-driven repayment plans. Forbearance temporarily pauses student loan payments without hurting your repayment standing, but interest still builds while you’re not making payments. That means borrowers ended up paying more in interest because they went through with forbearance rather than saving money and choosing an IDR plan.
Why is the CFPB suing Navient?
In fact, the lawsuit alleges that Navient purposely made many borrowers pay more on their loans than they needed to, and the CFPB is suing for borrowers to get financial relief from Navient’s mishandling.
When was Bankrate founded?
Founded in 1976 , Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Is Bankrate a strict editorial policy?
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
What happens if you settle student loan debt with Navient?
Because you have to default on a student loan before Navient accepts a settlement, late payments will be reported to the credit bureaus. Those late payments can cause credit scores to plummet.
How much does student loan settlement cost?
A student loan settlement for a private student loan will typically cost 40-70% of the current balance. So if you owe $100 thousand, the settlement may be for somewhere between $40 thousand and $70 thousand.
How much money can you save with a student loan settlement?
There's no set amount you can save with a student loan settlement. Each private lender will have its own settlement guidelines.
Can Navient settle student loans?
Navient won't settle federal student loans. As a student loan servicer, they don't have the authority. Only the Department of Education and guaranty agencies have the power to settle federal student loans. You can settle a federal student loan that Navient services after you default on the loan.
Is a lump sum necessary for a student loan settlement?
A student loan settlement may make sense for you if: your loans are in default. you have money to pay towards a settlement. A lump sum isn't always necessary. But it's helpful.
Does Navient offer interest only?
Navient, like many private student loan holders, offers deferments and forbearances for a limited period of time. At some point, you'll run out of both. From there, they'll usually offer to allow you to make interest-only payments.
Can you negotiate a student loan settlement with Navient?
But the process for negotiating a settlement will change depending on whether your loan is a federal student loan or a private student loan.
