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The settlement reached last week with Navient is intended to resolve claims that Navient allegedly improperly steered some federal student loan borrowers into forbearance – instead of federal student loan relief programs, like Income Based Repayment, and issued high-interest private student loans to borrowers attending predatory for-profit schools where they were unlikely to succeed or be able to repay their loans. Navient consistently denies any wrongdoing.

Forgiveness for Some Private Student Loan Borrowers

The settlement agreement includes provisions for student loan forgiveness for certain Navient private student loans, and modest restitution for some federal student loan borrowers. Pay attention to those key words!

Here’s what you need to know:

  • If you have PRIVATE NAVIENT student loans, only certain ones issued by Navient are considered.
  • You must have attended certain for-profit educational institutions like DeVry.
  • The loans must have been disbursed between 2002 and 2014.
  • You must have been delinquent for at least seven (7) billing cycles prior to June 30, 2021.
  • Only loans that are still collectible under the applicable statute of limitations are eligible.

Federal student loans are NOT eligible for CANCELLATION under the settlement. These borrowers may be eligible for Borrower Defense to Repayment. This is a federal student loan forgiveness program that can cancel the federal student loan debt for borrowers who were defrauded by their school. Read on…

Restitution for Some Federal Student Loan Borrowers

No federal student loans are being forgiven or cancelled under the settlement agreement with Navient. Many borrowers WILL receive a modest (very) financial award called restitution. About 350,000 borrowers will be eligible for around $260 to $270 per borrower. Yes, you read that right. Under $300.

Here’s what you need to know:

  • Borrowers must have had at least one federal student loan that was eligible for income-driven repayment between October 2009 and January 2017, but were instead steered into forbearance as a result of a phone call with a Navient customer service agent. The borrow must not have been in an income-driven repayment plan prior to that forbearance.
  • The forbearance must have lasted at least two consecutive years. Half of the forbearance must have been to postpone payments going forward, as opposed to a retroactive forbearance to bring a delinquent account current.
  • Borrowers must reside in one of these states: AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, IL, IN, KY, LA, MA, MD, ME, MN, MO, NC, NE, NJ, NM, NV, NY, OH, OR, PA, TN, VA, WA, or WI.

What do student loan borrowers need to do if they qualify?

Relief under the settlement will be distributed automatically. Borrowers will be notified sometime this summer if they qualify. All borrowers need to do is make sure that their contact information is up to date, particularly with their federal student loan servicer and There is no application process.

For more information, borrowers can visit and they can also contact their state attorney general’s office (some have set up specific websites to help guide their residents).

Excerpted from Adams S. Minsky,

Holli Lewandowski, Certified Credit Counselor, Educator, and Advocate