Navient cancels student debt for 66,000 borrowers. Are you one of them?
There was a lot of interest in recent news that Navient, one of the largest student loan servicers, would write off debt for 66,000 borrowers.
The main question people asked: Am I one of them?
Probably not, is the short answer.
Only about 0.15% of student borrowers nationwide will have their debt erased from the settlement between the lender and dozens of states.
Navient has been accused of giving loans to those who cannot afford to repay them. Under the terms of the agreement, another 350,000 federal borrowers will receive a small check in the mail from the company.
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Navient has denied all allegations.
“The company’s decision to resolve these matters, which were based on unsubstantiated claims, allows us to avoid the additional burden, expense, time and distraction that prevails in court,” said the General Counsel. of Navient, Mark Heleen, in a statement.
Here are the details of the settlement, including who will actually get the relief.
Which loans will be cancelled?
Eligible borrowers include those with subprime private student loans, which are given to people with low credit scores, from Sallie Mae (Navient’s predecessor company).
To be eligible, these loans also had to have been taken out between 2002 and 2014, your mailing address must be in one of the states that participated in the settlement, and you must have been delinquent for at least seven months.
Another group that will get forgiveness are those with private Sallie Mae student loans who attended certain for-profit colleges that have been subject to federal or state law enforcement action.
Navient is expected to contact affected borrowers by July 2022.
Who will receive a check?
Among the charges against Navient was that the lender pushed some consumers into costly forbearance rather than helping them find a more affordable repayment option.
As a result, the company is required to write a check for approximately $260 to some 350,000 borrowers.
To qualify for the payment, you must also meet a number of other requirements. These include: you were enrolled in at least two consecutive years of forbearance between October 2009 and January 2017, you began repaying before January 2015, and at least one of your federal loans was eligible for a payment plan that caps invoices to a share of your monthly repayment. Income.
The refund should be paid in the spring.
Should I do something?
No. Financial assistance will be automatic.
“However, borrowers should ensure that the loan officer has their current contact details,” said higher education expert Mark Kantrowitz.
You probably won’t owe any taxes for the canceled debt or the $260 payment, Kantrowitz said.
So what happens with a broad forgiveness?
The loan forgiveness was also excluded from the Democrats’ Build Back Better program.
The White House did not respond to a request for comment.