Do I Qualify for the Navient Lawsuit Settlement?

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Navient recently agreed to cancel $1.7 billion in private student loan debt for borrowers who attended certain for-profit schools between 2002-2014, live in certain states, and were over seven months behind on their loan payments before July 31, 2021. Borrowers with federal student loans Direct Loans, FFEL Loans, Parent PLUS Loans, consolidation loanswon’t have their debt eliminated.

Navient recently announced that as part of a settlement, it was writing off the balances for 66 thousand borrowers who borrowed high-interest predatory private student loans between 2002 and 2014.

The main question people have is: Do I qualify for the Navient settlement?

Probably not, is the short answer.

The settlement — which clears $1.7 billion in debt — will benefit less than 0.15% of all borrowers.

Ahead, learn what the Navient loan forgiveness settlement is and if you qualify.

Related: Biden Approves $10-$20k in Loan Forgiveness

How do I know if I qualify for the Navient settlement?

On April 22, postcards were sent to people whose loans would be erased as a result of the Navient settlement. If your debts are to be canceled, you should receive notification by the first week of May.

Eligible borrowers will receive a letter substantially similar to this one.

Related: How to Get Rid of Navient Private Student Loans

Until then, you can check your eligibility by looking at your student loan servicer. The company that holds your loans is a key indicator of whether you qualify for relief.

  • If your loans are with Sallie Mae, the settlement agreement doesn't cover your loans because they were likely made after the eligibility period (2002-2010). Check out student loan refinance options to get a lower payment amount.
  • If your loans are with Navient, you may qualify to have your private student loans canceled — but only if your account was delinquent seven straight months before June 30, 2021, and you live in one of the participating states. Remember that Navient still services federal student loans made under the Federal Family Education Loans. Your FFEL Loans won't be wiped out because the settlement's terms do not cover them. Read more:“Is Navient a Federal or Private Student Loan?"
  • If your loans have been transferred to Aidvantage, your loans won't be eliminated — even if the loans started with Sallie Mae, were moved to Navient, and now are with Aidvantage. Those loans are federal student loans. To get relief, check out the student loan forgiveness programs offered by the Education Department.
  • If you settled loans with Navient or Sallie Mae, it's unlikely you'll get a refund. The settlement seems limited to loans with an outstanding balance. However, if you get a notice that your loans are canceled, it doesn't hurt to ask Navient to refund the money you've paid.

Check out Appendix A of the proposed settlement to see the complete eligibility criteria for loan forgiveness.

Learn More: How to Get Out of Student Loan Debt Legally

What is the Navient student loan settlement?

The Navient student loan settlement is an agreement between Navient and attorneys general for 39 states and the District of Columbia to resolve lawsuits that accused Navient of:

  • Giving high-interest loans to students who it knew likely could not repay the debt.
  • Steering federal student loan borrowers into forbearance, rather than offering them relief options like income-based repayment and Public Service Loan Forgiveness. Read more about forbearance steering.

Navient denied all allegations and said in a statement that it settled to avoid “additional burden, expense, time and distraction to prevail in court.".

As part of the agreement, Navient will erase $1.7 billion of subprime private student loans that its predecessor, Sallie Mae, gave to students who attended for-profit schools, many of whom had low credit scores.  Many of these schools  have now shuttered their doors.

It will also cut a small check to 350 thousand federal student loan borrowers whose loans it serviced.

Learn More: How to Get Rid of Navient Private Student Loans

Navient Settlement Eligibility: Who Qualifies for Cancelation?

Few borrowers will qualify to have their loans canceled as part of the Navient settlement. Here are the eligibility criteria:

  • You must have borrowed a private student loan from Navient or its predecessor, Sallie Mae, between 2002 and 2014 while attending certain for-profit schools like the Art Institute, ITT Technical Institute, and others. You can see a full list of schools at navientagsettlement.com.
  • Your loan must have been delinquent for at least seven months or charged-off before June 30, 2021.
  • You must live in a state participating in the settlement. More on that below.

In most cases, only loans that are still collectible or were being reported to credit bureaus as of June 30, 2021, are eligible. If the loan is past the statute of limitations for the state Navient shows as your last known address, then it won't be eligible for cancelation.

Related: Navient Private Loan Forgiveness

For example, if your address with Navient was in Missouri, the statute of limitations is 10 years for breach of contract cases involving student loan debt. The loan would be eligible for cancelation under the settlement.

Borrowers with federal student loans aren't eligible for cancellation. But you may get a $260 check from Navient this spring if:

  • You were enrolled in at least two straight years of forbearances between October 2009 and January 2017.
  • You entered repayment before January 2015.
  • At least one of your federal loans was eligible for an income-driven repayment plan.

Learn More: $10,000 Student Loan Forgiveness

“Navient valued the $1.7 billion it agreed to forgive at just $50 million — the total it expected it would ever be able to recoup...." Stacey Cowley for the New York Times.

Navient Lawsuit Settlement Schools List

Eligible schools for the settlement include major for-profit chains like ITT Tech and Corinthian Colleges, both of which have collapsed. It also includes Art Institute, Argosy University, DeVry University, Le Cordon Bleu, and Kaplan University.

  • Advanced Career Technologies, ABC Training Center of Maryland, and The Career Institute - American Career Institute, The Career Institute of American International College, and Clark University Computer Career Institute
  • Alta College - Westwood College and Redstone College
  • Apollo Group - University of Phoenix
  • ATI Enterprises - ATI Career Training Center
  • Bridgepoint Education - Ashford University
  • Career Education Corporation - Le Cordon Bleu, Sanford Brown, American InterContinental University, Brooks Institute, Colorado Technical University, Briarcliffe College, Harrington College of Design, International Academy of Design & Technology, and Missouri College
  • Center for Excellence in Higher Education - College America, Independence University, Stevens-Henager College, and California College San Diego
  • Corinthian - Bryman Institute, Everest Institute, Everest College, Heald College, and WyoTech
  • DeVry - DeVry University, Ross University, Keller Graduate School of Management, and Carrington College
  • Education Corporation of America - Virginia College and Brightwood College
  • Education Management Corporation - Art Institute, Argosy University, Brown Mackie, and South University
  • Minnesota School of Business - Minnesota School of Business and Globe University
  • Graham Holdings - Kaplan University, Kaplan Career Institute, Kaplan College, and Mount Washington College
  • ITT Educational Services - ITT Technical Institute
  • Lincoln Educational Services - Lincoln Technical Institute
  • B&H Education - Marinello School of Beauty
  • Premier Education Group - Salter College, Branford Hall, Hallmark Institute of Photography, Harris School of Business, American College of Medical Careers

You can see the full Navient settlement agreement and list of schools at navientagsettlement.com.

Related: Navient Student Loan Forgiveness

Navient settlement states

To qualify for the Navient settlement, your mailing address on file with Navient as of June 30, 2021, must have been in one of these states:

Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Washington, and Wisconsin.

States not in Navient settlement

You do not qualify for the Navient student loan settlement if your mailing address on file with Navient as of June 30, 2021, was in one of these states: Alabama, Alaska, Idaho, Mississippi, Montana, New Hampshire, North Dakota, Oklahoma, South Dakota, Texas, and Utah.

You're not eligible for relief because your state's attorney general didn't participate in the lawsuit against Navient. Although you do not benefit from the settlement, you and other residents of those states may file individual lawsuits against Navient to get relief.

Navient Settlement Application

Borrowers need not apply for the Navient settlement to get their loans forgiven. There isn't a "Navient Settlement Application." By July 2022, Navient will send you a letter like the one below, showing which of your loans will be canceled.

Likewise, eligible federal student loan borrowers need not apply to have Navient mail them a check. Later this spring, Navient will send the checks automatically. The only thing you should do is contact Navient to update your mailing address to make sure it has up-to-date contact information for you.

How to Join the Navient Lawsuit

You've already joined the Navient lawsuit the company recently settled with the 39 state attorneys general if your mailing address on file with Navient as of June 30, 2021, was in a location that participated in the deal.

The other Navient lawsuit, filed by the Consumer Financial Protection Bureau in 2017, is still pending. You don't have to apply to join that lawsuit, either.

UP NEXT: Who Do You Contact If You Have Questions About Repayment Plans?

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