Navient debuts private student loan forgiveness, and other student loans news

Select private student loan borrowers may be eligible for student loan forgiveness through former servicer Navient. Plus, more sweeping student loan cancellation was announced for federal borrowers in late May, forgiving $7.7 billion in debt for 160,500 borrowers.

Here’s what you need to know to stay up-to-date with the latest trends in student loans and how they could impact your balance.

Navient quietly releases student debt forgiveness waiver

If you were defrauded by your school and have student loans serviced through Navient, the servicer is now offering a simplified route to student loan forgiveness. The Project on Predatory Student Lending (PPSL) recently discovered that the servicer now offers borrowers the chance to apply for loan discharges. However, Navient never publicized the process.

Borrowers can apply for a program similar to borrower defense to repayment. You must be able to prove that your school or institution defrauded you in some way.

Those who think they may be eligible must ask Navient for a school misconduct discharge application. You can reach the company by emailing advocate@navient.com or by calling the Office of Consumer Advocate department at 855-545-4199, extension 998214.

To better your chances of cancellation, PPSL suggests including as much information as possible in your application. This includes the dates you attended, your student loan balance and how the institution harmed you or acted illegally.

If possible, include lawsuits against the school or other public information to back your claims. The Consumer Finance Protection Bureau (CFPB) is a great place to start your search.

Navient officially left the market in February 2024 and will transfer its student loans to MOHELA by the end of the year.

What this means for borrowers

The PPSL notes that all private student borrowers should have the right to relief if defrauded under the 1976 “Preservation of Consumer Claims and Defenses” rule. However, to their knowledge, this is the first time a servicer has created a cancellation process.

“Private student loans have always carried basic consumer protections like borrower defense, yet lenders and servicers have obstructed borrower efforts to realize them, individually or at scale,” Eileen Connor, president and executive director of PPSL, stated in a press release.

The servicer has long been under fire for alleged predatory lending practices.

In 2022, Navient offered relief or restitution to select borrowers following a lawsuit by 39 state attorneys general. Eligible borrowers were notified by email in 2022 and received relief automatically, so they do not need to re-apply.

A 2017 lawsuit filed by the CFPB alleges that Navient was “failing borrowers at every stage of repayment.” The CFPB stated that it “seeks to recover significant relief for borrowers harmed by these illegal servicing failures.” That case’s outcome is pending.

Borrowers with Navient loans shouldn’t rely on potential lawsuit findings or legislation for student debt relief. It’s best to keep paying down your loans as required to avoid credit damage. Need payment relief due to a financial hardship? Contact the customer service department to see if any alternative payment or deferment options are available.

If you attended a predatory school and have private loans held by a different servicer, PPSL states you can request forgiveness even if the servicer doesn’t have a formal process. Their guide suggests starting by writing the servicer a letter requesting info about how to apply.

Another $7.7 billion in federal student loans was forgiven for qualifying borrowers

The Biden-Harris administration announced another round of federal debt forgiveness totaling $7.7 billion on May 21. The 160,500 borrowers who qualified are enrolled in one or more of these three federal programs:

• Public Service Loan Forgiveness (PSLF)
• Saving On A Valuable Education (SAVE)
• Income-Driven Repayment (IDR)

The U.S. Department of Education’s press release asserts that, due to improvements made to these programs, around one in 10 federal borrowers has now qualified for some form of debt relief.

Newly qualifying borrowers were notified via email in May and will have their relief processed by the Department shortly. If you think you qualify but haven’t received any information, contact your federal servicer as soon as possible.

What this means for borrowers

Borrowers who qualify for one of the programs listed above but have not enrolled should do so immediately. An update was recently announced that allows applicants to get credit toward forgiveness through a payment count adjustment. However, this waiver is only available through June 30, 2024.

The applications can be found on the department’s website and it’s best to apply as soon as possible. Those who miss the deadline could be leaving free forgiveness on the table.

President Joe Biden’s widespread federal student loan cancellation proposal was struck down by the Supreme Court in 2023. Since then, the Education Department has been focused on improving existing federal relief programs, like PSLF. It also introduced a new income-driven repayment plan, SAVE, under which 4.6 million borrowers have qualified for a $0 monthly payment.

Given the administration’s commitment to forgiving student loan debt, it’s unlikely that this most recent announcement will be the last. Keep an eye out for any new information from your servicer and make regular payments, even if you think you may qualify for the recent adjustments.