Navient student loan debt relief and restitution $1.85B settlement

Navient, one of the largest student loan servicers in the United States, has agreed to a $1.85 billion settlement with the state of Pennsylvania resolving claims of predatory student loan practices.

Borrowers will be eligible for restitution, private loan debt cancellation, or both.

Borrowers are eligible for restitution relating to federal loan forbearance steering if they resided in a 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 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 forbearance was entered through a phone call and where at least half of the forbearance time was prospective (i.e., not used to bring a past-due loan current), and did not enroll in income-driven repayment before the forbearance period.​

Borrowers are eligible for debt cancellation if they took out private subprime student loans through Navient’s predecessor, Sallie Mae, between 2002 and 2014, then had more than seven consecutive months of delinquent payments before June 30, 2021.

Also included are other, non-subprime private student loans made by Salle Mae Bank and others between 2002 and 2014 for borrowers to attend certain for-profit schools that have been subject to state or federal law enforcement actions. A list of these schools is available on the settlement website.

The restitution-participating states are: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Minnesota, Missouri, North Carolina, Nebraska, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, Washington, and Wisconsin.

In order to be eligible for private loan debt relief, the loan in question must have been in “past due” status more than seven consecutive months before June 30, 2021, and only loans within a statute of limitations period or still credit reporting as of June 30, 2021, are eligible.

To qualify, the borrower must have had their mailing address on file with Navient as of June 30, 2021, must be within one of the restitution-participating states, as well as Arkansas, Kansas, Michigan, Rhode Island, South Carolina, Vermont, West Virginia, or associated with a military address postal code.

Generally, to qualify, the borrower’s mailing address on file with Navient as of June 30, 2021, must be within one of the restitution-participating states listed above, Arkansas, Kansas, Michigan, Rhode Island, South Carolina, Vermont, West Virginia, or associated with a military address postal code.

Some borrowers might be eligible to receive both private loan debt relief and a restitution payment.

Of the $1.85 billion, Navient will pay $95 million to the states to be used as restitution. Qualifying borrowers who lived in restitution-participating states or had a military post code as of January 2017 will receive a check for approximately $260. These checks are expected to go out by mail by mid-2022.

Those who are eligible for the debt cancellation will receive a written notice from Navient by July that the debt has been canceled and that the credit bureaus will be alerted to remove the loan tradeline from the borrower’s credit report. 

The settlement also requires Navient to stop using unfair and deceptive student loan servicing  and collection practices.

Borrowers do not need to file a claim. Payments will be made automatically. 

However, federal borrowers should update the contact information in their account at studentaid.gov or create a new account if they don’t have one.

Who’s Eligible

Borrowers are eligible for restitution relating to federal loan forbearance steering if they resided in a 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 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 forbearance was entered through a phone call and where at least half of the forbearance time was prospective (i.e., not used to bring a past-due loan current), and did not enroll in income-driven repayment before the forbearance period.​

Borrowers are eligible for debt cancellation if they took out private subprime student loans through Navient’s predecessor, Sallie Mae, between 2002 and 2014, then had more than seven consecutive months of delinquent payments before June 30, 2021.

Also included are other, non-subprime private student loans made by Salle Mae Bank and others between 2002 and 2014 for borrowers to attend certain for-profit schools that have been subject to state or federal law enforcement actions. A list of these schools is available on the settlement website.

Potential Award

$260 plus debt cancellation.

Proof of Purchase

No proof of purchase required.

Update Contact Information

NOTE: If you do not qualify for this settlement do NOT file a claim.

Remember: you are submitting your claim under penalty of perjury. You are also harming other eligible Class Members by submitting a fraudulent claim. If you’re unsure if you qualify, please read the FAQ section of the Settlement Administrator’s website to ensure you meet all standards (Top Class Actions is not a Settlement Administrator). If you don’t qualify for this settlement, check out our database of other open class action settlements you may be eligible for.

Claim Form Deadline

No claim form is required for this settlement.

Case Name

Commonwealth of Pennsylvania v. Navient Corp., Case No. 3:17-cv-01814 in the U.S. District Court for the Middle District of Pennsylvania

Settlement Website

NavientAGSettlement.com

Claims Administrator

Rust Consulting

Class Counsel

OFFICE OF THE PENNSYLVANIA ATTORNEY GENERAL

Defense Counsel

KIRKLAND & ELLIS LLP

MYERS BRIER & KELLY LLP