By Owen Daugherty, NASFAA Staff Reporter
Tens of thousands of borrowers with student loans disbursed or serviced by Navient may be eligible for student loan cancellation under the terms of a settlement the company made with a group of state attorneys general last month.
As part of the settlement, Navient will provide $1.7 billion in private student loan cancellation to more than 66,000 borrowers nationwide, in addition to $95 million in restitution payments to approximately 350,000 federal student loan borrowers.
While borrowers with both private student loans and federal student loans could see some relief from the settlement, the terms and payouts are very different.
Borrowers with private student loans through Navient or Sallie Mae must have attended specific for-profit institutions — such as Corinthian Colleges schools, DeVry University, the Art Institutes, ITT Technical Institutes, and a few others — and the loans must have been disbursed between 2002 and 2014.
Additionally, the loans must have been delinquent for at least seven monthly billing cycles prior to June 30, 2021, and a borrower must live in one of the 40 states represented by state attorneys general in the settlement or the District of Columbia. A full list of states and further terms of the settlement can be found here.
Under the terms of the settlement, Navient is required to notify eligible private loan borrowers of the discharge of their private loans in writing by July 2022. Those who are eligible for the private loan cancellation under the settlement do not need to take any action.
Borrowers with federally-held student loans serviced by Navient are not eligible for outright cancellation, but could see some relief in the form of restitution payments of roughly $260.
Those who are eligible for a payment will receive a postcard in the mail later this spring, with checks expected to be sent by mail midway through the year. Borrowers who may be eligible for a restitution payment are encouraged to update their contact information in their studentaid.gov account or create an account if they do not already have one.
Borrowers with federal loans who qualify for relief under the settlement don’t need to take any action if they already have a studentaid.gov account with up-to-date information.
Generally, the relief provided by Navient as part of the settlement will be distributed automatically and borrowers should expect to be notified if they qualify.
Publication Date: 3/1/2022