The settlement will cancel $ 1.7 billion in private student loan debt and $ 95 million in small reparations for some federal borrowers.
Loan management company Navient, Announced on January 13, 2022 He said he had reached a settlement with the 39 state lawyer presidents over unfair and deceptive student loan practices.
Pennsylvania Attorney General Josh ShapiroNavient, along with other lawyers involved in the lawsuit, issued subprime loans to borrowers who are unlikely to repay, tolerantly misleading the borrowers, saying, “They stopped paying the principal of the loan, many. To accumulate more debt and endless interest payments that claim to have led the person. “
Navient denied these allegations and stopped providing loans to the Ministry of Education after the fall of 2021. Navient Federal Family Education Loan (FFEL) Program Owned by private lenders and non-federal private student loans.
settlement This will lead to the cancellation of $ 1.7 billion in private student loans and the repayment of $ 95 million to some borrowers of federal loans.
After the settlement was announced Some federal student loan borrowers I was wondering if their debt would be forgiven.
Will the Navient Settlement cancel the loan to the federal student loan borrower?
Source of information
No, the Navient settlement does not cancel the loan to the federal borrower. Some federal borrowers may be eligible for small damages, but are not eligible for loan exemptions as part of the settlement.
What we found
Who is eligible for student loan debt forgiveness?
Navient said In the announcement about the settlement Canceling the loan balance of approximately 66,000 borrowers with certain eligible private education loans.
Here’s what you need to know to determine if a borrower is eligible to cancel a loan:
The settlement funds will be sent primarily through Navient’s predecessor, Sallie Mae, between 2002 and 2014 to those who have taken out private subprime student loans to borrowers with low credit scores. FAQ page about the Massachusetts Government Reconciliation. These borrowers also paid arrears for more than 7 months prior to June 30, 2021.
The proceedings alleged that these practices unfairly targeted lenders who were unlikely to be able to repay their loans.
Other private student loan borrowers, also by Sallie Mae Bank and other specific lenders between 2002 and 2014, if attended specifically for commercial schools subject to “state or federal or enforcement measures” Eligible for debt relief for loans made. Page says. These commercial institutions include the American Career Institute, Phoenix University, DeVry University, Art Institute, ITT Technical Institute, and more.
To be eligible for debt relief, the borrower’s mailing address registered with Navient as of June 30, 2021 must be included in one of the 39 return participating states.A complete list of states Available online..
Attorney General of Delaware Kathy Jennings, who participated in the proceedings, said I wrote in a press release Navient will notify private loan borrowers who have had their debt canceled by July 2022. You will also receive a refund of payments made for private loans canceled after June 30, 2021.
Who is eligible for other payments from Navient?
Compensation of approximately $ 260 each will be distributed to approximately 350,000 federal student loan borrowers placed in certain types of long-term grace periods. According to the website dedicated to the Attorney General and Navient Reconciliation..
According to the Massachusetts FAQ page, it is generally eligible if:
- As of January 2017, I lived in a state participating in compensation.
- Entered repayment directly or with Federal Family Education Loan (FFEL) Program Loans before January 2015.
- There was at least one federal loan subject to income-led repayments.
- There is an oral or administrative grace for at least two consecutive years between October 2009 and January 2017, at least one grace is entered by phone and at least half of the delinquency time is used to bring the delinquency. The current loan that wasn’t);
- Did not register for income-led repayments before the grace period.
Those eligible for repayment will receive a postcard by mail from the Settlement Manager in the spring of 2022. According to the settlement website, some borrowers may be eligible for both debt relief and repayment of private loans.
Federal loan borrowers do not need to take any action other than renewing or creating studentaid.gov Jennings, an account to ensure that the Ministry of Education has a current address, said.
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Navient Reconciliation: Who is eligible for student loan cancellations?
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