Navient agrees to forgive $3.5 million in student loans
Navient has decided to forgive $3.5 million in student loans.
Here's what you need to know.
Student loans
Navient, among the nation's leading education loan servicers, has decided to student loan debt forgiveness for, within the words of New Hampshire Attorney General John Formella, “victims of Navient's unlawful and harmful practices. “. The consent judgment resolves several allegations, according to Formella, that Navient:
- Created subprime student loans in Nh that Navient waited for, and finally defaulted, at high rates;
- Made billing and payment systems difficult for student loan borrowers and co-signers, which affected their ability to allocate their education loan payments;
- Placed some student borrowers who were experiencing long-term financial difficulties in student loan forbearance rather than an income-driven repayment plan, which ultimately hurt these student borrowers; and
- Unable to provide student borrowers with renewal notices for income-contingent repayment plans.
Student Loan Forgiveness: How Navient Will Change Its Practices
The affected student loans that will be canceled were private education loans removed primarily between 2002 and 2010 and subsequently defaulted. Navient will contact the 129 student borrowers eligible for this education loan cancellation in the coming months. To obtain a education loan forgiven, borrowers don't need to apply or take any other proactive steps. Under the the consent judgment, Navient will even make several enhancements to customer service and education loan servicing, including:
- explain the benefits of income-tested repayment plans to student borrowers;
- propose estimating education loan repayment amounts based on income before forcing student borrowers to forgo student education loans;
- process student loan payments quickly and accurately;
- make education loan repayment history open to borrowers,
- apply additional student loan payments to student education loans with the highest interest rates, allowing borrowers to save education loan interest; and
- inform student borrowers trying to get public service loan forgiveness of the limited relief that is available until October 31, 2022 and could enable them to get student loan forgiveness sooner.
In January, Pennsylvania Attorney General Josh Shapiro announced that Navient had agreed to forgive $1.7 billion in risky private student education loans owed by 66,000 student borrowers, mostly at for-profit schools like the 'ITT Technical Institute and the Art Institute. Under the settlement, Navient also agreed to pay $95 million in restitution payments of approximately $260 each to approximately 350,000 federal borrowers who have been placed in certain types of long-term student loan forbearance. The settlement was accompanied by 39 state attorneys general.
“The company's decision to solve these things, that have been according to unsubstantiated claims, permits us to steer clear of the additional burden, expense, time and distraction that prevails in court,” said the overall Counsel. of Navient, Mark Heleen, following the major settlement announced in January. “Navient is and it has been focused on helping student borrowers understand and select the best payment options to meet their demands. In fact, we've increased enrollment in income-contingent repayment plans and reduced default rates, and each year hundreds of thousands of borrowers we support successfully repay their student education loans. Navient has specifically denied breaking any law, including consumer protection laws, or causing injury to student borrowers.
Will your student loans be forgiven?
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Disclosure: Navient has an affiliate relationship with Mentor.