Who is included in the Navient settlement? Am I eligible for student loan forgiveness?
After a lawsuit filed on behalf of several states against Naviant will see more than 60,000 borrowers have their student debt canceled in the coming months
When the federal government issues you a student loan, it is often serviced by a private company. One of these companies, Navient, which formally was a unit under Sallie Mae, has reached a settlement with the attorney generals of several states after a lawsuit was filed against them for engaging in years of predatory practices.
The settlement reached $1.85 billion and includes funding to repay legal fees, compensate borrowers, and fully cancel the debt of others.
In a statement released by the thirty-nine attorney generals that formed part of the suit, they said that hundreds of thousands of borrowers would be compensated "to resolve allegations of widespread unfair and deceptive student loan servicing practices and abuses in originating predatory student loans."
Who will have their debts canceled?
One of the practices identified in the case was that Navient would push borrowers into forbearance programs where they did not need to pay the principal balance but they would accumulate interests. The company has said they would encourage borrowers to set up payment plans consistent with their incomes, they could have reduced the total amounts debt holders would have had to pay.
Additionally, the suit called attention to the particularly exploitative practice of originating "predatory subprime private loans to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of such borrowers would be unable to repay the loans."
During the suit officials from Navient said that they created these subprime private loans to entice these schools into making Navient their preferred lender "for highly-profitable federal and “prime” private loans, without regard for borrowers and their families, many of whom were unknowingly ensnared in debts they could never repay."
Who will have their debt canceled?
Around 66,000 student debt holders "who took out certain private student loans, largely between 2002 and 2010, and who subsequently defaulted and met other criteria." The majority of these borrowers attended for-profit institutions and will be notified by Navient directly if their debts will be canceled.
Those who will be sent a $260 check will be notified of their eligibility by a postcard sent by the Department of Education.
How to change your address with the US Department of Education?
For those who believe they be eligible but think the US Department of Education may have an outdated address on file, updates can be made at the following web address.