Student loan borrowers who took out loans serviced by Navient, one of the nation's largest student loan debt collectors, cautiously celebrated Thursday's announcement that tens of thousands of them would have their loans canceled under an agreement with more than three dozen states.<\/p>\n
The total amount of debt to be forgiven, as well as an accompanying reimbursement agreement, is substantial – a deal worth about $1.85 billion.<\/p>\n
A bipartisan coalition of state attorneys general calls the resolution "a victory for student loan borrowers "Holding Navient accountable after the company was sued for allegedly misleading borrowers with deceptive lending practices and offering risky subprime loans. For its part, Navient is The denial violated consumer protection laws or caused harm to borrowers by insisting on entering into the agreement "to avoid the additional burden, expense, time and distraction of having to go to court to enforce it".<\/p>\n
But the average Navient customer hoping for immediate relief may be disappointed, said Mike Pierce, executive director of the Student Borrower Protection Center, a consumer advocacy group.<\/p>\n
"Yesterday was a very big deal for certain people who were really forgotten in our national conversation about the student debt crisis," Pierce said. "For a certain group of these people, this will be life-changing. But for everyone else, the fight goes on."<\/p>\n
About 66.000 student loan borrowers with Navient loans may see their debt forgiven.<\/p>\n
These are borrowers with private loans – specifically subprime student loans taken out between 2002 and 2014 by Sallie Mae, Navient's predecessor company. (Navient was formed in 2014 after Sallie Mae was split into two business units.)<\/p>\n
In addition, these borrowers must be before the 30. June 2021 have had more than seven consecutive months of delinquencies.<\/p>\n
Student borrowers who do not have subprime loans may still qualify if their private loans were originated between 2002 and 2014 and they attended a for-profit school that was later subject to state or federal law enforcement action. These schools include Corinthian Colleges, DeVry University and ITT educational services. For a full list, visit a website for the agreement.<\/p>\n
About 350.000 federal student loan borrowers Navient has enrolled in a long-term forbearance plan would be eligible for a payment – about $260 per borrower.<\/p>\n
Attorneys general say these forbearance agreements pushed student borrowers further into debt because while these borrowers could temporarily suspend or reduce their payments, interest continued to accrue on their loans.<\/p>\n
In order to receive reimbursement, certain conditions apply, e.g. B. The existence of at least one federal loan that was eligible for income-driven repayment and the borrower not enrolling in income-driven repayment prior to the deferral period<\/p>\n
Borrowers whose federal loans were recently transferred another service provider, Aidvantage, may still be eligible for a refund.<\/p>\n
Eligible residents of the following states are covered by the refund agreement: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, Washington, and Wisconsin. Washington, DC, is also included.<\/p>\n
In addition, borrowers who qualify for debt forgiveness must also reside in one of the states listed above or in the following states: Arkansas, Kansas, Michigan, Rhode Island, South Carolina, Vermont and West Virginia.<\/p>\n
If a borrower qualifies for either debt forgiveness or a refund payment, they are contacted directly.<\/p>\n
A settlement administrator is expected to mail a postcard to these borrowers this spring, and the checks would go out in mid-2022.<\/p>\n
Those borrowers facing forgiveness of their personal loans will be contacted in writing by July 2022.<\/p>\n
The agreement between Navient and the states is still waiting for final court approval.<\/p>\n
Pierce recommends borrowers with personal loans to keep paying or, if possible, consult a lawyer about their situation.<\/p>\n
Those with federal student loans still benefit from a moratorium on such payments until 1. May, after the Biden administration extended the break last month.<\/p>\n
But there is lasting good news for those whose debts have been forgiven, including under this latest settlement agreement with Navient, Pierce said.<\/p>\n
Student loan forgiveness is tax-free as part of White House coronavirus stimulus package signed last year. Previously, all student loan debt forgiven by the government was taxable.<\/p>\n","protected":false},"excerpt":{"rendered":"
Student loan borrowers who took out loans serviced by Navient, one of the nation's largest student loan debt collectors, cautiously<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\n