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Yesterday, 39 state attorney general’s offices announced that a settlement had been reached in ongoing litigation against Navient

, one of the nation’s largest student loan providers.

The settlement seeks to resolve allegations that Navient improperly encouraged certain federal borrowers to forbear instead of using federal student loan relief programs such as income-based repayment and student loan forgiveness. Public Service (PSLF) and provided high-interest private student loans to borrowers attending predatory programs. for-profit schools where they were unlikely to succeed or be able to repay their loans. Navient has always denied any wrongdoing and the company has not admitted any liability under the settlement agreement.

The settlement agreement includes student loan forgiveness provisions for certain Navient private student loans and modest restitution for certain federal borrowers. Here’s what you need to know.

Student Loan Forgiveness for Select Navient Private Student Loans

The settlement agreement for Navient provides $1.7 billion in private student loan forgiveness. Here are the details:

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  • Only certain private student loans issued by Navient or its predecessor, Sallie Mae.
  • Eligible borrowers must have attended certain for-profit educational institutions such as Corinthian Schools, DeVry University, Art Institutes, ITT Technical Institutes and others.
  • Student loans must have been disbursed between 2002 and 2014.
  • Student loans must have been delinquent (late in payment) for at least seven monthly billing cycles by June 30, 2021.
  • In most cases, only loans that are still collectible under the applicable statute of limitations, or still reported to the credit bureaus, as of June 30, 2021, are eligible.
  • Borrowers must live in specific states covered by the settlement. Many states, but not all, will be eligible.

Federal student loans cannot be canceled under the settlement. But these borrowers may be eligible for Defense of the borrower until reimbursement, a federal student loan forgiveness program that can forgive federal student loan debt for borrowers who have been defrauded by their school.

Restitution for Certain Federal Student Loan Borrowers

Although no federal student loans will be waived or terminated as part of the settlement agreement with Navient, many borrowers will receive a modest financial reward called restitution. About 350,000 borrowers will be entitled to about $95 million in restitution, or about $260 to $270 per borrower. There are eligibility criteria:

  • Borrowers must have made the repayment of a direct federal student loan or the FFEL program before January 2015.
  • Borrowers must have had at least one federal student loan eligible for income-contingent repayment between October 2009 and January 2017, but were instead forced into forbearance following a phone call with a customer service agent from Navigate. The borrower must not have participated in an income-based repayment plan prior to this forbearance.
  • Abstention must have lasted at least two consecutive years. At least half of the forbearance must have been to defer payments to the future, as opposed to a retroactive forbearance to update an overdue account.
  • 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.

Do student loan borrowers have to do anything to get relief under the Navient settlement?

Relief granted under the Navient Student Loan Settlement will be distributed automatically. Borrowers should be notified this summer if they qualify. All borrowers need to do is make sure their contact information is up to date, especially with their Federal Student Loan Officer and, the Department of Education’s federal student aid website. There is no application process for borrowers to apply for relief.

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).

Further Reading on Student Loans

4 Signs Student Loan Forgiveness Is Not Out of Order

Student Loan Forgiveness Updates: New Changes Coming in 2022 for Public Service Borrowers

Want student loan forgiveness? Here is a roadmap

$2.4 billion in student loan forgiveness for 38,000 borrowers in the pipeline, Education Department says




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