Navient, one of the largest student loan servicers in the country, has agreed to a major settlement regarding your student loans.
Here’s what you need to know.
Navient will provide relief totaling $1.85 billion to resolve allegations of “pervasive unfair, deceptive, and abusive student loan servicing practices and misconduct in the origin of predatory student loans,” according to Pennsylvania Attorney General Josh Shapiro.
Shapiro said, “Naviante repeatedly and deliberately puts profits ahead of its borrowers – it engages in deceptive and abusive practices, targets students who know they will struggle to pay back loans, and lives their lives through education.” put an undue burden on the people trying to improve it.” , “Today’s agreement corrects Navient’s past behavior, provides much-needed relief to Pennsylvania borrowers, and puts in place safeguards to ensure that this company does not fall victim to student loan borrowers again.”
student loan cancellation
Under the terms of the settlement, according to Shapiro, the Navient would be, among other conditions:
- cancel $1.7 billion of subprime private student loan debt on approximately 66,000 student loan borrowers, primarily at for-profit schools such as the ITT Technical Institute and the Art Institute; (Is canceling student loans next?)
- Pay $95 million in restitution payments of approximately $260 each to the approximately 350,000 federal loan borrowers who were placed in some form of long-term forbearance; And
- Student loan borrowers pursuing student loan forgiveness need to be informed that there is a limited waiver available until October 31, 2022 that can help more borrowers calculate prepayments and obtain student loan forgiveness.
(Related: Here’s Who Won’t Get Student Loan Forgiveness).
how to get student loan relief
Student loan borrowers do not need to take any action to get this student loan relief. (Related: Student loan borrowers will get $15 billion student loan cancellation). Student loan borrowers who must cancel student loans will receive a notice from Navient by July 2022. Federal loan borrowers who will receive about $260 will receive a postcard in the mail from the settlement administrator later this spring. Federal student loan borrowers are encouraged to update their contact information with the US Department of Education through studentaid.gov.
Navient announced that it would be pulling out of Federal Student Loan Service for federal student loans, and instead the U.S. Department of Education would work with Maximus to service these federal student loans. Navient described the settlement for private student loans as the cancellation of student loans for 66,000 student loan borrowers, largely generated between 2002 and 2010, along with one-time payments of approximately $145 million to states.
Student Loans: Navient
The settlement is linked to 39 state attorneys general and settles claims that Navient drove struggling student loan borrowers into expensive long-term forbearance rather than more affordable income-driven repayment plans. According to the attorney general, accrued interest due to Navient’s practices for putting student loan borrowers into forbearance increased their student loan debt and cost them more money. Alternatively, the attorney general claims that Navient can help student loan borrowers achieve low monthly payments as low as $0 through an income-driven repayment plan or pursue public service loan forgiveness.
“The company’s decision to resolve these cases, which were based on unfounded claims, allows us to avoid additional burden, expense, time and distraction in court,” said Mark Helen, Navient’s chief legal officer. “Naviant is relentlessly focused on helping student loan borrowers understand and choose the right payment options to meet their needs. In fact, we have boosted income-driven repayment plan enrollment and reduced default rates. Every year, we support hundreds of thousands of borrowers to successfully pay off their student loans.
As part of the Agreement, Navient expressly denies violating any laws or harming the Borrower, including consumer-protection laws. Navient has also agreed to maintain servicing practices that support the success of the borrower.
Student Loans: Next Steps
As a reminder, student loan servicers can be a helpful resource, but you should really do your own research to make sure you understand all of your options for student loan repayment. Student loan relief will not last forever and student loan cancellation is not guaranteed. Here are some popular ways to pay off student loans:
Student Loans: Related Reading
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