Have you heard that Navient is waiving a large number of student loans? Well, don’t start blasting your happy music just yet. Not everyone gets a piece of this pie.
If you’re wondering, Will Navient cancel my student loans? keep reading. We’re breaking down exactly what’s happening with the latest Navient student loan situation—and what that means for you.
Yo fellow borrowers!
You’ve come to the right place if you’ve been drowning in student loan debt and wondering if the Navient lawsuit is actually true. Fasten your seatbelts, as we will delve into this legal drama and unravel all the details you require.
Is the Navient Lawsuit Real?
Yes, it is true; in fact, the Consumer Financial Protection Bureau (CFPB) and several state attorneys general have brought legal action against Navient over the course of several years. These lawsuits allege that Navient engaged in a bunch of shady practices, including:
- Misallocating payments: This means that Navient allegedly applied borrowers’ payments to the wrong loans, resulting in higher interest charges and longer repayment periods.
- Steering borrowers into forbearance: Forbearance is a temporary suspension of payments, but it can actually increase your overall debt because interest continues to accrue. Navient allegedly encouraged borrowers to enter forbearance instead of enrolling in income-driven repayment plans, which can lower your monthly payments and help you qualify for forgiveness.
- Providing misleading information: Navient is accused of confusing borrowers about their repayment options and the process for obtaining a co-signer release.
What’s the Latest on the Navient Lawsuit?
The largest development is the agreement that Navient signed in January 2022 with 39 state attorneys general. This settlement resulted in $1. 7 billion in debt forgiveness for holders of private student loans who enrolled in for-profit universities with low graduation rates Additionally, 350,000 federal student loan borrowers are receiving around $260 each as restitution.
However, the CFPB’s lawsuit against Navient is still ongoing. The purpose of this lawsuit is to obtain additional relief for borrowers and to hold Navient accountable for its alleged misconduct.
What Does This Mean for You?
If you are a borrower with Navient, you may be wondering what all of this means for you. Here’s a quick rundown:
- Private loan borrowers: If you had a private student loan from Navient that originated between 2003 and 2014 and attended a for-profit college with a low graduation rate, your loan may have been cancelled. You should have received a notification from Navient by July 2022.
- Federal loan borrowers: If you had a federal student loan from Navient and were placed in certain types of long-term forbearances between October 2009 and January 2017, you may be eligible for the $260 restitution payment. You should have received a postcard notification from the settlement administrator in April 2022, and the payments were sent out in July 2022.
If you’re unsure whether you qualify for any relief, it’s best to contact Navient directly. You can also check the websites of the state attorneys general and the CFPB for more information.
What’s Next?
The CFPB’s lawsuit against Navient is still ongoing, so it’s unclear what the final outcome will be. However, the settlement with the state attorneys general is a major victory for borrowers and sends a strong message to student loan servicers that they need to operate ethically.
While waiting, it’s critical to remain knowledgeable about your options for student loans and make sure you’re utilizing any available debt management programs.
Here are some additional resources that you might find helpful:
- Navient Lawsuit Settlement Website: https://navientlawsuit.com/
- CFPB Lawsuit Against Navient: https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-navient-for-deceiving-student-loan-borrowers/
- Student Loan Hero: https://studentloanhero.com/
- NerdWallet: https://www.nerdwallet.com/article/loans/student-loans/navient-student-loan-lawsuit
Remember, you’re not alone in this! There are many resources available to help you navigate the complexities of student loan debt. Don’t hesitate to reach out for help if you need it.
What’s Going on With Navient Student Loans?
On January 13 of this year, Navient (one of the biggest student loan companies in America) announced they agreed to a $1.85 billion settlement with more than 35 states.1,2 A settlement for what exactly? Long story short, a group of attorneys general from multiple states sued Navient for predatory student loan practices (aka for doing some real shady stuff to put students in debt and keep them in debt).3
According to the lawsuit, Navient pressured borrowers to apply for student loan forbearance, which allowed them to delay payments but still required interest payments. Additionally, Navient was charged with persuading students to take out subprime private loans, which are extremely expensive loans for individuals with poor credit, despite Navient’s (Salilie Mae’s) knowledge that the students would probably not be able to repay the loans later. The majority of students who received these loans were enrolled in for-profit universities with lower graduation rates, such as ITT Technical Institutes and the Art Institutes. 4.
Yeah, it’s all as scummy as it sounds. Sallie Mae/Navient was basically setting students up to fail and burying them even deeper in debt.
“Navient repeatedly and deliberately put profits ahead of its borrowers—it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back, and placed an unfair burden on people trying to improve their lives through education,” said Pennsylvania Attorney General Josh Shapiro, one of the people who championed the lawsuit.5
Navient won’t admit they broke any laws, but they agreed to a settlement to avoid dragging the issue out in court any longer (so they say).6 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.7 It seems that what goes around comes around, Navient.
You may also remember that in the fall of 2021, Navient tapped out of the federal student loan game, passing on their 5.6 million federal student loans to a new company—Aidvantage.8 It could be that Navient was trying to wash their hands of some of the mess while they still could. But they’re definitely having to pay for their crooked actions now.
How Does This Impact the Student Loan Industry?
Listen, $1. 7 billion is a lot of money. But that’s less than 1% of the nearly $1. 6 trillion in national student loan debt!14 In actuality, the sum of debts that Navient was compelled to forgive represents a very small portion of the money that student loan companies have been able to embezzle from borrowers over the course of the previous few decades. (Watch the documentary Borrowed Future to discover for yourself how toxic and unmanageable the student loan crisis truly is.) ).
Nevertheless, the Navient student loan settlement represents a significant victory for all borrowers, not just the borrowers in question. The fact that lawmakers from both parties united to take on a student loan company demonstrates the extent of the issue facing Americans. The Navient settlement sets a solid example for possible future lawsuits against other private student loan companies.
However, Navient continues to operate, meaning they can continue to entice the coming generation to take out loans. And they aren’t the only lender out there toeing the legal line. Before the student loan industry loses its ability to keep young people trapped in a never-ending cycle of crippling debt, there is still a long way to go.
Pennsylvania AG files suit against student loan provider Navient
FAQ
How do I know if I qualify for the Navient lawsuit?
Who gets money from Navient settlement?
Is Navient student loan forgiveness real?
How much will I get back from ITT Tech lawsuit?
Is Navient delivering $1.7 billion in debt cancellation?
Navient Corp., once a major servicer of private and federal student loans, is delivering $1.7 billion in debt cancellation to approximately 66,000 private loan borrowers as part of a settlement with 39 state attorneys general. In addition, 350,000 federal student loan borrowers are receiving about $260 each dispersed from a total of $95 million.
How much will student loans be canceled in Navient settlement?
Thousands of student loans to be canceled in $1.85 billion Navient settlement. Many more borrowers can expect $260. Thousands of student loan borrowers are expected to receive long-sought debt relief through a $1.85 billion consent judgment announced Thursday with Navient, one of the nation’s largest student loan companies.
Does Navient owe a lot of student loan debt?
The loan servicing giant Navient has agreed to cancel $1.7 billion in student loan debts owed by roughly 66,000 borrowers, as part of a settlement announced Thursday with 39 state attorneys general. The settlement ends a years-long legal fight with states in which Navient faced two serious allegations.
How much restitution does Navient pay?
The student loan servicer agreed to cancel $1.7 billion in private student loan debts for nearly 66,000 borrowers and to pay $95 million in restitution. A $1.85 billion deal between 39 states and Navient, which is based in Wilmington, Del., includes $95 million in restitution. Andrew Kelly/Reuters