#1 Student Loan Lawyer
Updated on February 20, 2023
Navient, the most notorious player in the student loan game, made a flashy announcement last year: they would forgive the debt of 66,000 borrowers who had been fleeced with predatory loans and exorbitant interest rates between 2002 and 2014.
At that time, Navient and its predecessor, Sallie Mae, were being accused by multiple government agencies of using aggressive tactics to push students into taking out loans they couldn’t pay back.
But here’s the rub: very few of those in debt to Navient ended up qualifying for relief.
The reasons for this are many, but the end result is that only a measly 0.15% of all student loan borrowers are eligible.
The settlement administrator has already notified eligible borrowers, so if you’re still waiting to hear about your debt cancellation, it’s likely that your loans weren’t included in the settlement, and you’re still on the hook for the remaining balance.
So what’s the deal with this Navient loan forgiveness settlement? Do you even qualify for any debt relief?
These are the questions that everyone is asking, and we’ll dive deeper into the specifics to help you get a better sense of whether you might be eligible.
Related: How to Get Sallie Mae Loans Forgiven
Last summer, postcards appeared in people’s mailboxes, heralding the good news that their loans would be erased thanks to the Navient settlement. If you were one of the lucky ones, you would have received an official notification, almost the same as this sample, last year.
If you didn’t get the letter, don’t worry just yet. Contact your student loan servicer to check whether you qualify for debt relief. The company that holds your loans is a key indicator of whether you can expect any relief.
If Sallie Mae holds your loans, you’re out of luck. The settlement only covers loans made during a specific period (2002-2010). You can still explore student loan refinance options to get a lower payment amount. Check out student loan refinance options to get a lower payment amount.
If you’re a Navient borrower, you may have a glimmer of hope. Private student loans may be canceled if your account was delinquent for seven straight months before June 30, 2021, and you live in one of the participating states. But don’t get too excited just yet. Navient still services federal student loans made under the Federal Family Education Loans, which won’t be wiped out because the settlement’s terms don’t cover them. Related: Are Navient loans federal?
If your loans have been transferred to Aidvantage, I have bad news for you: You won’t see any loan eliminations, even if your loans originated with Sallie Mae, moved to Navient, and are now with Aidvantage. Those loans are federal student loans, and your best bet for relief is to check out the student loan forgiveness programs offered by the Education Department.
If you’ve already settled loans with Navient or Sallie Mae, you won’t get a refund. The settlement was limited to loans with an outstanding balance. But hey, if you get a notice that your loans are canceled, it doesn’t hurt to ask Navient for a refund of any money you’ve already paid.
To see the full eligibility criteria for loan forgiveness, check out Appendix A of the proposed settlement.
Learn More: How to Get Out of Student Loan Debt Legally
Yes, FFELP loans are included in the Navient settlement. As part of the settlement, Navient agreed to pay millions of dollars in restitution payments to borrowers it steered into long-term forbearances that added thousands of dollars of interest to their loan balances rather than putting them into income-based repayment options or advising them of the need to consolidate to qualify for Public Service Loan Forgiveness.
Related: How to Consolidate Student Loans for PSLF
Unfortunately, FFEL Loans weren’t included in the loan cancellation. Only private student loans are covered. Instead, the U.S. Department of Education has implemented a one-time waiver that counts time spent in forbearance, deferment, and repayment toward income-driven repayment forgiveness.
To qualify for the IDR Waiver, FFEL Loan borrowers must submit a consolidation application on StudentAid.gov by May 1, 2023. Monthly payments for the new Direct Loan will be paused until this summer. The department expects to finish its review of borrowers’ payment histories and implement the debt cancellation by then.
Few borrowers qualified 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.
Usually, 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: Why Is Navient Still Charging Interest?
“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...”
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.
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.
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.
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.
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 (CFPB) n 2017, is still pending. You need not apply to join that lawsuit, either.