Terry’s Columns Navient Student Loan Settlement

Navient Student Loan Settlement

By Terry Savage on January 14, 2022

The $1.7 billion dollar settlement with Navient that 39 state attorneys-general just announced has millions of student loan borrowers hoping they will get out from under the burden of their debt. But don’t expect much. Only about 350,000 borrowers will qualify for this settlement. And the qualifications are stringent, applying mostly to people who took out Sallie Mae loans before 2010 and were in default, or to Federal student loan borrowers whose loans were serviced by Navient and who were wrongly advised to go into forbearance, instead of being guided into an income-based repayment plan.
In short — don’t get your hopes up!

The Navient settlement came after Navient allegedly was:

1️⃣ Lending predatory subprime private student loans to students whom were a higher risk of defaulting

2️⃣ Steering federal student loan borrowers into forbearance instead of explaining their repayment options and the benefits of income-driven repayment plans

Here’s a quick look at who might qualify, from www.StudentLoanPlanner.com — and a direct link to the specifics.

{Note: StudentLoanPlanner.com offers help to all who have student loans, giving independent and individualized advice (for a fee of $395) about whether you should refinance or consider one of the alternatives for dealing with Federal student loans or private loans. They do not try to sell you refinancing programs.}

Here is their description of the qualifications for being part of this settlement.

????Those with private loans:
☑️You borrowed between 2002-2014
☑️We’re in default as of 6/30/2021
☑️You had more than 7 consecutive months of delinquent payments prior to June 30, 2021
☑️ Your mailing address on file with Navient as of 6/30/2021, must be within AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, IL, IN, KS, KY, LA, MA, MD, ME,MI, MN, MO, NC, NE, NJ, NM, NV, NY, OH, OR, PA, RI, SC, TN, VA, VT, WA, WI, WV, or associated with a military address postal code.

The cancellation may also include borrowers who attended specific for-profit schools that have been subject to state or federal law enforcement actions. A list of these for-profit schools is shown at www.mass.gov/info-details/frequently-asked-questions-about-the-navient-settlement

Generally, only loans that were within a statute of limitations period or still credit-reporting as of 6/30/2021 are within the scope of the debt relief.

????Generally, federal loan borrowers are eligible for forbearance steering restitution ($260) if they:
☑️ Resided in MA or another restitution-participating state as of January 2017
☑️ Entered repayment on a Direct or FFEL Program loan before January 2015
☑️ Had at least one federal loan that was eligible for income-driven repayment
☑️ Had at least two years of consecutive verbal or administrative forbearance between October 2009 and January 2017, where at least one of the forbearances was entered through a phone call, and where at least half of the forbearance time was prospective
☑️ AND Did not enroll in income-driven repayment before the forbearance period.

As you can see, this settlement is very limited. And even worse, it favors those who did NOT pay their loans and went into default.



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