Thousands of people will have their student loan debt forgiven
Thousands of people with student loan debt will have their debt forgiven or receive a one-time check in a multi-state settlement with one of the nation’s largest student loan servicers.
Navient, the Wilmington-based company, has been accused of encouraging borrowers to suspend payments through forbearance rather than directing them to lower-cost repayment plans tied to their income. Although Navient denies the charges, the settlement ends multi-state investigations into the company’s practices and will affect thousands of people whose loans are serviced by Navient.
The loans in question were primarily issued by Sallie Mae between 2002 and 2014 before Sallie Mae spun off its student loan services as Navient in 2014. The deal will result in the cancellation of $1.7 billion in loans students. Another $95 million will be distributed in restitution payments worth about $260.
How do I know if I will benefit from it?
Those whose private loan debt will be forgiven will be notified by Navient no later than July 2022. They will receive a refund for payments made after June 30, 2021.
Borrowers who qualify for the $260 restitution payment will receive a postcard in the mail from a settlement administrator this spring.
Borrowers who are eligible for debt forgiveness or payment need do nothing more than ensure that their studentaid.gov account is up to date with their current address, according to officials.
The website navientagsettlement.com says it will post updates on the notice postcard schedule.
Who is eligible for the $260 restitution payment?
Generally, borrowers must have lived in a state participating in the settlement as of January 2017 and spent at least two years in forbearance to be eligible for restitution.
At least one federal loan must have been eligible for income-contingent repayment and the borrower cannot have enrolled in income-contingent repayment before entering forbearance.
In Delaware, 1,528 borrowers will receive restitution payments.
Who is eligible for debt cancellation?
According to participating state officials, the debt relief will primarily go to borrowers who had subprime student loans through Sallie Mae between 2002 and 2014 (before the company split from Navient) and who had more than seven consecutive months of debt. overdue payments by June 30. , 2021.
Borrowers who had non-subprime loans to attend certain for-profit schools will also have their debt forgiven. A list of these schools is available here.
In Delaware, 145 borrowers will see their debt cancelled. The average canceled debt is approximately $33,000.
How do I know if my debt is paid off by Navient?
Login to your studentaid.gov account, enter your account dashboard and click on “My loan officers”. The most recent communication will indicate the entity that sends the invoices for your private loan repayments.
You can also call the Federal Student Aid Information Center at (800) 433-3243.
When do I have to start paying my federal student loans again?
The student loan payment pause instituted due to the COVID-19 pandemic is scheduled to end on May 1.