Will Your Navient Loans Be Forgiven?

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Updated on October 2, 2022

Navient will notify you by June 2022 if your Navient loans will be forgiven.

Navient reached a $1.85 billion deal with 39 state attorneys generals to settle claims that it:

  • made predatory, subprime private student loans to borrowers with low credit scores it knew were unlikely to repay (many of these loans were made by Navient’s predecessor, Sallie Mae).

  • steered federal student loan borrowers into forbearances instead of affordable income-based repayment plans.

The settlement resolves many lawsuits filed against it by federal and state prosecutors.

As part of the settlement, Navient will cancel $1.7 billion in delinquent private student loans for people living in locations that participated in the deal. It will also pay about $260 to each federal loan borrower it placed into long-term forbearances.

No federal student loans — Direct Loans, FFEL, or Perkins Loans — will be forgiven under the agreement.

But the Education Department, under direction from the Biden Administration, has improved existing federal student loan forgiveness programs. Those changes will bring relief to thousands of borrowers whose accounts were serviced by Navient.

Keep reading to learn how to find out if your Navient loan will be forgiven.

As part of the settlement, Navient will cancel past-due private student loans made in 2002 and after to people who attended certain for-profit schools or who borrowed under other Navient loan programs. The eligible schools include:

  • Bridgepoint Education

  • Corinthian Colleges

  • DeVry University

  • Education Management Corp.

  • ITT Technical Institute

Unfortunately, not everyone who attended those schools will have their loans forgiven. Student loan cancellation is available only for people living in locations that participated in the deal.

The settlement administrator sent emails and letters to people eligible for cancellation on April 22, 2022.

Learn More: Do I qualify for the Navient Lawsuit Settlement?

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But what if Navient sold my loan to Aidvantage?

If your loans moved from Navient to Aidvantage, they are federal student loans. The bad news is that those loans aren’t eligible for debt cancellation under the settlement because it only applies to private loans.

Although your federal loans won’t be forgiven as part of the Navient student loan settlement, you may receive a restitution payment of $260 if your loans were placed into forbearances for long periods of time instead of being placed into an income-driven repayment plan. Go to your studentaid.gov account and update your contact information with your current address to receive the postcard notification.

Learn More: Aidvantage Student Loans: Forgiveness & Repayment Options

Relief for Navient federal student loans

Since President Biden has taken office, the U.S. Department of Education has made piecemeal fixes to four existing forgiveness programs:

Of those, most borrowers will benefit from changes made to the first two programs: PSLF and IDR forgiveness.

Learn More: Is Navient a Federal Loan?

Expanded eligibility for PSLF

The forgiveness program for public servants was temporarily relaxed so more full-time government and nonprofit employees could qualify to have their student loan debt erased. The department will use a one-time waiver that will give credit toward forgiveness for a broader range of past student loan payments on both FFEL and Direct Loans. These rules are set to expire Oct. 31, 2022.

Over 110 thousand people have gotten around $.8 billion in relief under this limited waiver.

If you still have federal student loans with Navient, you will need to consolidate your loans into a Direct Consolidation Loan. You will also need to complete an Employment Certification form for each qualifying employer you’ve worked for since Oct. 2007.

Visit studentaid.gov to apply.

Learn More: How to Apply for the PSLF Limited Waiver Opportunity

Credit towards IDR forgiveness

Income-driven plans are a safeguard for people who can’t afford to pay their federal student loans in full over 10 years. Those four plans — IBR, ICR, PAYE, and REPAYE — cap your payments at between 10% and 20% of your discretionary income while extending the repayment term up to 25 years. Plus, they carry a bonus that no other type of repayment plan does: eventual forgiveness of the remaining balance. Read more about income-driven repayment forgiveness.

But for many borrowers, this promise of relief was broken. Student loan servicers failed to record qualifying payments under the plans, a problem brought to light in a recent NPR investigation. The department also found that many servicers had no system to track payments and identify when borrowers qualified for loan forgiveness.

In response to these significant flaws, the White House announced it will use a one-time waiver to credit millions of borrowers with more payments toward loan forgiveness under the income-driven repayment plans.

Using that waiver, the Education Department will count time towards forgiveness for:

  • monthly payments made under any plan — no matter which payment plan the borrower was in at the time.

  • 12 or more consecutive months of forbearance.

  • 36 or more months of cumulative forbearance.

  • months spent in deferment before 2013 (except for in-school deferment).

  • any time borrowers were in repayment before consolidation on consolidated loans.

If the adjustment leads to your loans being immediately forgiven, you’ll get a refund for any payment you made over the forgiveness threshold (20 or 25 years).

If you still have federal loans with Navient, then those are commercially held Federal Family Education Loans. You’ll need to consolidate those loans into a Direct Consolidation Loan before you can receive credit towards the income-driven forgiveness clock. If your loans were already moved to Aidvantage, the department will automatically review your account.

The Education Department will work immediately on the changes, but you may not see them reflected on your account until this fall. It will also display income-driven repayment counts on the Federal Student Aid website later this year.

UP NEXT: Federal Student Loan Forgiveness Programs

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