A recent lawsuit reveals that Navient misled public service loan borrowers regarding the benefits of Public Service Loan Forgiveness. Navient attempted to prevent these borrowers from transferring their loans to FedLoan Servicing to avoid losing associated fees. In a settlement announced in June 2020, Navient has agreed to improve training for its staff regarding this loan forgiveness program. It will also donate $1.75 million to a student loan counseling nonprofit group. As part of the settlement, Navient will also pay the lawyers representing the class, but borrowers who received inaccurate information will receive nothing.

Cancellation of $1.7 billion of private student loans

A settlement reached between Navient and 39 states require the servicer to cancel $1.7 billion in private student loan debt and make a one-time payment of $145 million to the states. The agreement also requires Navient to make restitution payments of $95 million to select borrowers of federal student loans. Navient had been accused of improperly disbursing student loans to college students who would likely not be able to repay them. The company still denies violating any law, but it is expected to benefit nearly 66,000 borrowers.

Navient has agreed to cancel $1.7 billion in private student loans and pay nearly $95 million in restitution in a settlement with 39 attorneys general. The settlement focuses on borrowers of for-profit college loans made between 2002 and 2014. Navient’s settlement also involves restitution for the 350,000 federal loan borrowers. The company settled in part because it was allegedly using the high-risk borrowers to generate more federal student loan business. In particular, the settlement claims that Navient steered borrowers into forbearances and failed to fully explain how income-driven repayment programs would help them pay off their loans.

Restitution payments to borrowers

Under the terms of the settlement, Navient must pay $95 million to borrowers who were victims of its unfair practices. In addition, eligible borrowers will receive checks for $260. To qualify, borrowers must have lived in one of the participating states or had a military postcode as of January 2017. In July, those eligible for the restitution payments will receive notices of cancellation, and Navient will remove any loan tradeline on their credit report.

Navient is also required to cancel the remaining balances of nearly $1.7 billion in private student loans. This includes nearly 66,000 borrowers in 39 states. It will also alert consumer credit bureaus about the cancellation of those debts and will refund certain payments sent after June 30. It will also pay $142.5 million to state attorneys general. The agreement will provide relief to many student borrowers who were harmed by Navient’s practices.

States that do not qualify for the lawsuit

Several states have filed lawsuits against Navient, a student loan servicer. These states allege that Navient abused its power to force borrowers into costly repayment options that do not meet their income needs. In particular, the company steered borrowers into forbearance programs that they didn’t need, or into cheaper alternatives that didn’t satisfy their needs. In other instances, the company approved loans for borrowers who were unlikely to pay them back.

The settlement in the Navient case resolves a nearly decade-old investigation of the educational lending industry. As a lender and loan servicer, Navient was responsible for a substantial portion of student loans. In addition to federal loans, Navient also serviced private student loans. In some states, student loan laws do not permit Navient to make private loans. This lawsuit, however, is unrelated to federal student loan laws.

Steps to take if you qualify

If you qualify for a student loan navient lawsuit, you are among the thousands of borrowers eligible for relief. As the nation’s largest student loan servicer, Navient has been under fire for deceiving borrowers and offering them substandard services. In response, the Department of Education is taking action and imposing stricter regulations for Navient. This settlement will provide more than $1.85 billion in relief for borrowers.

The settlement will require Navient to cancel the remaining balances on nearly $1.7 billion in private student loans. This settlement covers about 66,000 private student loan borrowers in 39 states. Navient will also pay $142.5 million to the state attorneys general and refund certain payments that were sent after June 30, 2021. If you have been deceived by Navient, you should contact the Department of Education immediately and take action.

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