Navient student loan bankruptcy $16M class action settlement (2024)

FAQs

Are student loan borrowers eligible for 16 million in relief? ›

People that will receive a portion of the $16 million will have to meet certain qualifications. They would have need to have filed for bankruptcy protection on or after October 17, 2005. Before their bankruptcy filing, they must have been obligated to repay one or more private student debt as a borrower or co-borrower.

Contact your student loan servicer to check whether you qualify for debt relief. The company that holds your loans is a key indicator of whether you can expect any relief. If Sallie Mae holds your loans, you're out of luck. The settlement only covers loans made during a specific period (2002-2010).

Establish a Settlement Fund of $16 million to pay damages claims for those Settlement Class Members who submit timely Claim Forms that are approved by the Settlement Administrator. Pay to you all or a portion of the amounts you paid to Navient since the date of your bankruptcy discharge.

Navient loans can be forgiven after 20 years if they are federal student loans repaid under an IDR plan. The forgiveness applies to loans received for undergraduate study, while loans for graduate or professional study or Parent PLUS Loans may be forgiven after 25 years.

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.

Borrowers with only undergraduate debt would qualify for forgiveness if they first entered repayment 20 years ago (on or before July 1, 2005), and borrowers with any graduate school debt would qualify if they first entered repayment 25 or more years ago (on or before July 1, 2000).

As part of the settlement, Navient will be canceling $1.7 billion in private student loans and paying $95 million in restitution to borrowers who were victim to their predatory tactics, plus another $145 million to the states involved.

What is Navient? Navient is a company that services federal and private student loans.

The remaining unpaid balance of loans is forgiven after 20 or 25 years. Pay As You Earn (PAYE)—Payments are generally 10% of your discretionary income, but never more than the 10 year Standard repayment plan amount. The remaining unpaid balance of loans is forgiven after 20 years.

Once the largest servicer of student loans owned by the U.S. Department of Education, Navient no longer serves as one of the government's student loan servicing contractors, transferring all student loans it once serviced to Maximus (also known as Aidvantage) in late 2021.

Can Navient private loans be forgiven? ›

Loan forgiveness and discharge options are limited on private loans and differ from federal loans. Please call us to discuss eligibility for forgiveness or discharge options for private loans. If you have a Total and Permanent Disability (TPD), you may qualify for a TPD discharge of certain private student loans.

Navient is a private company that the U.S. Department of Education once hired to service its federal loans. In March 2021, after four years of litigation, a settlement was reached between Navient and the attorney general's office in Washington, where a judge ruled that Navient violated the Consumer Protection Act.

The majority of that amount—or about $1.7 billion in forgiveness—will cover the cost of canceling the remaining balance on subprime private student loan balances of about 66,000 borrowers. Borrowers who had loans that originated between 2002 and 2010—and later defaulted—will receive forgiveness, according to Navient.

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 (10 years) qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

The most straightforward method to get rid of your student loan is to repay it in full. If you have the financial resources, you can choose to pay off your loan in a lump sum. This will eliminate your debt and save you from accruing further interest.

Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months. Borrowers will be notified directly by their servicers via email when their loans have been discharged, and all qualifying loans will be discharged over the coming weeks.

Frequently Asked Questions. How do I know if I am eligible for debt relief? To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households).

This action comes as nearly 8 million borrowers have been helped by the SAVE plan. That includes 4.5 million with a $0 monthly payment. Today's announcement brings the total loan forgiveness approved by the Biden-Harris Administration to $153 billion for nearly 4.3 million Americans.