Navient, one of the nation’s leading student loan servicers, has agreed to cancel $3.5 million of student loans. The canceled loans come as part of a settlement between Navient and the New Hampshire Attorney General’s Office over several allegations against the company. Here’s what you need to know.
The latest agreement to cancel student loans comes after Navient was accused of predatory lending practices.
In January, Pennsylvania Attorney General Josh Shapiro announced that Navient agreed to a settlement with 39 states that would cancel $1.7 billion in subprime private student loan debt owed by 66,000 student loan borrowers, primarily at for-profit schools. At the time, Navient denied wrongdoing. “The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court,” Navient’s chief legal officer said.
Months later on May 9, paperwork filed to the Merrimack Superior Court shows a consent judgment was reached, which resolved the allegations that Navient engaged in predatory practices. These practices included allegedly originating subprime loans that the company expected the borrowers to default from, making billing and payment systems difficult for borrowers and cosigners.
As part of that, Navient has agreed to cancel an additional $3.5 million of student loans that impact 129 student loan borrowers. The borrowers who will now have their student loan forgiven took out private education loans between 2002 and 2010 and later defaulted — amounting to approximately 129 student loan borrowers.
Those who qualify to have their student loans canceled from the latest settlement will be contacted by Navient in the coming months. More information will be on the company’s website, which you can check for details.
For those who qualify for the latest loan cancelation, it’s excellent news. However, more Americans are still pushing for more widespread loan forgiveness for students. President Biden campaigned on the promise to cancel $10,000 in student debt per borrower, but so far, nothing has happened besides Biden canceling debt for specific borrowers.
Some people have benefited, like those who were tied up in the Public Service Loan Forgiveness Program (PSLF), borrowers with disabilities, and those who attended institutions that have been charged with defrauding particular groups. But despite most Americans saying they’d like to see canceled debt for all borrowers—that’s not happened yet.
Close to 45 million Americans have outstanding student loan debt, which totals more than $1.7 trillion. During the COVID-19 pandemic, the U.S. Department of Education issued a student loan payment pause. This meant eligible borrowers would have a suspension of loan payments, a zero-percent interest rate, and stopped collections on defaulted loans. The break has been extended through August 31, 2022. Whether or not the payment pause will be extended further or whether or not Biden will announce debt cancelation action before then remains to be seen.