66K borrowers get $1.7 billion in student debt cancellations

A major student loan servicer has reached a settlement that will cancel $1.7 billion in student loan debt for about 66,000 borrowers and provide $95 million (about $260 each) in restitution to 350,000 borrowers.

“Today’s settlement corrects Navient’s past conduct . . . and puts in place safeguards to ensure this company no longer preys on student loan borrowers,” Pennsylvania Attorney General Josh Shapiro said in a statement.

Navient’s settlement with attorneys general in 39 states involved two main charges:

  • Redirecting borrowers into forbearance rather than pushing them toward smarter income-based repayment options.
  • Through its predecessor, Sallie Mae, steered borrowers to subprime loans they knew could default.

“Navient has repeatedly and deliberately put profits ahead of borrowers — it has engaged in deceptive and abusive practices, targeting students who know it will be difficult to repay their loans, and placing an unfair burden on people trying to improve their lives through education,” Shapiro said. .

Here’s what you need to know about settlements.

How to find out if Navient settlements are affecting you

If you are not sure who your loan servicer is, you can easily find out by logging into your account Student Aid Website.

You should be able to identify the type of loan you have and your servicer through your account dashboard. Alternatively, you can contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

According to the settlement statement, eligible borrowers do not need to take any further action other than to ensure that the U.S. Department of Education approves their studentaid.gov account.

Borrowers who are eligible to cancel their private loan debt will be notified by Navient by July 2022 and will be refunded any monies on their canceled private loan after June 30, 2021.

Federal loan borrowers who receive approximately $260 in compensation will receive a postcard from their settlement administrator in spring 2022.

Tips for anyone struggling with student loan debt

Nationwide, about 43 million borrowers owe a total of $1.6 trillion in student loan debt. More than 5 million of them are in default.

While wholesale student loan forgiveness is still out of reach, it’s better to use extended grace period in your favor and Develop a debt repayment plan.

Here are some strategies Pay off your student debt — fast and permanent — including checking your eligibility Public Service Loan Forgiveness.

If you’re nearing retirement but still owe student loans, here are Six ways to cope.

Robert Bruce is a senior writer at The Penny Hoarder.

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