While Navient’s private student loan forgiveness program is the focus of this article, the company has also been involved in other student loan debt relief settlements.
These settlements, which are separate from the current program, resulted from lawsuits alleging unfair and deceptive practices by Navient. They provide relief to specific groups of borrowers and offer context about the company’s past actions.
Navient State Attorneys General Debt Cancellation
What it was: A debt cancellation program resulting from a settlement between Navient and 39 state attorneys general in January 2022. The settlement aimed to provide relief to thousands of borrowers affected by Navient’s alleged unfair and deceptive practices.
Background on the lawsuit: In 2017, the Consumer Financial Protection Bureau (CFPB) and several state attorneys general filed lawsuits against Navient, claiming that the company steered borrowers towards forbearance instead of income-driven repayment plans, which could have helped them manage their debt more effectively.
Settlement terms: As part of the settlement, Navient agreed to:
Cancel $1.7 billion in private student loan debt for approximately 66,000 borrowers
Pay $95 million in restitution to 350,000 federal student loan borrowers who were placed in long-term forbearance
Who was eligible: Under the settlement, borrowers were eligible for debt cancellation if:
They had private student loans originated by Sallie Mae (Navient’s predecessor) between 2002 and 2014
Their loans were in default and had been charged off
Borrowers who qualified for debt cancellation under the settlement should have received notices from Navient in the mail.
How it relates to the private student loan forgiveness program: While the lawsuit settlement and debt cancellation are separate from Navient’s private student loan forgiveness program, they provide important context about the company’s past practices and the challenges borrowers have faced. The settlement demonstrates a growing recognition of the need for debt relief and the importance of holding student loan servicers accountable for their actions.
Current status: Ended. The debt cancellation program resulting from the settlement with 39 state attorneys general has concluded. Borrowers are no longer able to apply for relief through this specific settlement.
Navient Bankruptcy Settlement
What it was: A nationwide bankruptcy settlement between Navient and a group of about 4,600 private student loan borrowers who alleged that the company violated their legal rights by continuing efforts to collect on debts that were discharged in bankruptcy.
Background on the class action lawsuit: The borrowers, whose loans exceeded their college tuition costs, filed a class action lawsuit against Navient, claiming that the company improperly tried to collect on debts that had been discharged in bankruptcy.
Settlement terms: In July 2023, after six years of litigation, Navient agreed to a settlement worth $198 million. Under the terms of the settlement, Navient will:
Forego collecting approximately $182 million worth of debt from the class members
Pay $16 million to compensate class members and cover litigation costs
Take steps to help remove the discharged debts from borrowers’ credit reports
Significance of the settlement: This settlement establishes a legitimate bankruptcy pathway for private student loan borrowers in financial distress. It provides meaningful relief to thousands of borrowers who were improperly forced to pay back loan amounts that had been discharged in bankruptcy.
How it relates to other Navient settlements: The bankruptcy settlement in the Eastern District of New York comes just weeks after Navient reached another nationwide bankruptcy court deal in Nebraska. In the June 2023 agreement, Navient agreed to stop collecting on about $54 million worth of discharged private student loans related to unaccredited higher education programs and pay up to $28 million in damages.
Current status: Ended. The nationwide bankruptcy settlement, filed in the U.S. Bankruptcy Court for the Eastern District of New York in July 2023, has been finalized and implemented. Eligible borrowers should have received notifications about the relief they were entitled to under the settlement terms last year.
![Navient Student Loan Forgiveness: How it Works [July 2024] (2024)](data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAEAAAABCAQAAAC1HAwCAAAAC0lEQVR42mP8/h8AAvMB+NzmkbcAAAAASUVORK5CYII=)