Are you struggling to pay off your private student loans with Navient? You’re not alone. The company has faced multiple lawsuits and government investigations over its loan servicing practices, including allegations of deceptive practices and violations of consumer protection laws. In 2021, Navient agreed to settle a class-action lawsuit for $22.25 million, which could provide financial relief to thousands of borrowers.
Here are some important things to know about the Navient private loan settlement:
What |
Details |
|---|---|
Who is eligible? |
Borrowers who had private student loans with Navient and experienced certain issues with their loan servicing between January 1, 2008, and December 31, 2014. |
What issues are covered? |
Alleged violations of consumer protection laws, such as misleading borrowers about their repayment options, failing to apply payments properly, and mishandling forbearance requests. |
What are the terms of the settlement? |
Navient will pay $22.25 million to settle the class-action lawsuit, and will also make changes to its business practices to improve loan servicing for borrowers. Eligible borrowers may receive a portion of the settlement funds. |
How do I know if I’m eligible? |
If you had a private student loan with Navient between January 1, 2008, and December 31, 2014, and experienced issues with your loan servicing, you may be eligible to participate in the settlement. A claims administrator will contact eligible borrowers by mail. |
When will I receive my settlement funds? |
The settlement is still pending final approval by the court. If approved, eligible borrowers will receive a check or account credit within 60 days of the final approval. |
What if I have more questions? |
You can contact the claims administrator or your own attorney for more information. The settlement website also has a list of frequently asked questions and answers. |
Navient is one of the largest student loan servicers in the United States, managing loans for millions of borrowers. However, the company has faced numerous accusations of deceptive practices and poor customer service over the years.
One of the most significant legal challenges was a lawsuit filed in 2017 by the Consumer Financial Protection Bureau (CFPB) and various state attorneys general. The lawsuit alleged that Navient had engaged in widespread misconduct, including:
Misleading Borrowers About Their Repayment Options
The lawsuit claimed that Navient had steered borrowers into more expensive repayment plans, rather than informing them of more affordable options. For example, Navient allegedly encouraged borrowers to apply for forbearance (a temporary postponement of payments) rather than enrolling in an income-driven repayment plan.
Failing to Apply Payments Properly
The lawsuit also alleged that Navient had applied borrowers’ payments in a way that maximized the company’s profits, rather than helping borrowers pay down their debt. For example, Navient allegedly applied excess payments to future interest charges instead of principal, which resulted in higher interest costs for borrowers.
Mishandling Forbearance Requests
The lawsuit claimed that Navient had made it difficult for borrowers to qualify for forbearance, even when they were experiencing financial hardship. For example, Navient allegedly required borrowers to submit extensive documentation and reapply for forbearance every few months.
If you’re a borrower with private student loans serviced by Navient, you may be wondering how the settlement will affect you. Here are a few key takeaways:
You May Be Eligible for Compensation
If you had a private student loan with Navient between January 1, 2008, and December 31, 2014, and experienced issues with your loan servicing, you may be eligible to participate in the settlement. You should receive a notice in the mail if you’re eligible. The deadline for submitting a claim is October 5, 2021.
You May Receive a Portion of the Settlement Funds
The $22.25 million settlement will be divided among eligible borrowers who submit a claim. The amount you receive will depend on several factors, including the number of eligible claims and the severity of the issues you experienced.
As part of the settlement, Navient will be required to make changes to its loan servicing practices to better serve borrowers. For example, the company will be required to provide more accurate information about repayment options, apply payments in a way that benefits borrowers, and provide better customer service.
What Should You Do Next?
If you’re a borrower with private student loans serviced by Navient, it’s important to understand your rights and options. Here are a few steps you can take:
Review Your Loan Servicing History
Take a close look at your loan servicing history with Navient to see if you experienced any of the issues covered by the settlement. If you’re not sure, you can contact Navient or the claims administrator for more information.
Submit a Claim if Eligible
If you’re eligible to participate in the settlement, be sure to submit a claim by the deadline. You may receive financial compensation as a result.
Contact an Attorney if Necessary
If you believe Navient has violated your rights as a borrower, you may want to speak with an attorney who can help you understand your legal options.
Final Thoughts
The Navient private loan settlement is an important development for borrowers who have struggled with their loan servicing. If you’re eligible to participate in the settlement, it’s worth taking the time to understand your rights and options. By doing so, you may be able to receive financial relief and hold Navient accountable for its actions.
FAQs
Navient is one of the largest student loan servicers in the United States. The company manages loans for millions of borrowers, including both federal and private student loans.
What is a private student loan?
A private student loan is a type of loan that is provided by a private lender, such as a bank or credit union. Private student loans are not backed by the federal government, and may have different terms and conditions than federal loans.
What is a loan servicer?
A loan servicer is a company that manages a borrower’s loan on behalf of the lender. Loan servicers are responsible for collecting payments, providing customer service, and handling other administrative tasks related to the loan.
What is a class-action lawsuit?
A class-action lawsuit is a type of legal action in which a large group of people (the “class”) collectively sue a defendant for some type of harm or damages. Class-action lawsuits can be a powerful tool for consumers, as they allow individuals to pool their resources and hold companies accountable for their actions.
What is a claims administrator?
A claims administrator is a third-party company that is responsible for managing the claims process in a class-action lawsuit. The claims administrator is responsible for verifying the eligibility of claimants, processing claims, and distributing settlement funds.
What is forbearance?
Forbearance is a temporary suspension or reduction of loan payments. Forbearance may be granted to borrowers who are experiencing financial hardship, such as job loss or illness.
What is an income-driven repayment plan?
An income-driven repayment plan is a type of repayment plan for federal student loans that allows borrowers to pay a percentage of their discretionary income towards their loans each month. Income-driven repayment plans can help make loan payments more affordable for borrowers with lower incomes.
What is a deadline for submitting a claim?
A deadline for submitting a claim is the date by which eligible claimants must submit their claim in order to participate in a settlement. If you miss the deadline, you may not be able to receive compensation.
What if I don’t receive a notice in the mail?
If you believe you’re eligible to participate in the settlement but don’t receive a notice in the mail, you may still be able to submit a claim. You can contact the claims administrator or your own attorney for more information.
The Navient private loan settlement only applies to private student loans serviced by Navient. If you have federal student loans with Navient, you may be eligible for other types of relief or assistance, such as income-driven repayment plans or loan forgiveness programs.
What if I have private student loans with another lender?
The Navient private loan settlement only applies to borrowers with private student loans serviced by Navient. However, if you have private student loans with another lender and are experiencing similar issues with your loan servicing, you may want to contact an attorney or consumer advocacy group for assistance.
If you have already paid off your private student loans with Navient but experienced issues with your loan servicing, you may still be eligible to participate in the settlement. You should receive a notice in the mail if you’re eligible.
What if I have more questions?
If you have more questions about the Navient private loan settlement, you can visit the settlement website or contact the claims administrator or your own attorney for assistance. It’s important to understand your rights and options as a borrower.
What can I do to advocate for better student loan policies?
If you’re concerned about the state of student loan policy in the United States, you can take action by contacting your elected representatives, joining a student loan advocacy group, or supporting organizations that work to improve student loan policies and practices. Small actions can make a big difference in the fight for fair and affordable student loans.
Closing Thoughts
If you’re a borrower with private student loans serviced by Navient, the Navient private loan settlement may provide some much-needed relief. By understanding your rights and options, you can take steps to participate in the settlement and hold Navient accountable for its actions. Remember, you don’t have to navigate the student loan system alone. There are resources and advocates available to help you along the way.
Disclaimer
This article is intended for general informational purposes only and does not constitute legal, financial, or other professional advice. The content of this article may not be current or accurate and is subject to change without notice. This article does not create an attorney-client relationship or any other type of professional relationship between the reader and the author or publisher. The reader should consult with an attorney or other professional to obtain advice tailored to their specific situation. The author and publisher of this article make no representations or warranties of any kind with respect to the completeness or accuracy of the information contained herein.