Current student loan news for the week of January 17, 2022
Student loan agent Navient settled a $1.85 billion lawsuit late last week, resulting in more than $1 billion in student loan forgiveness and settlement payments for eligible borrowers. Here’s what you need to know about this week’s student loan trends and how they could impact your payments.
1 Current Student Loan Trend for the Week of January 17, 2022
1. Navient settles $1.85 billion lawsuit over alleged deceptive lending practices
Last week, a settlement with student loan agent Navient resolved several lawsuits accusing the agent of deceptive and unfair lending practices. Attorneys general from California, Illinois, Massachusetts, Pennsylvania and Washington led the litigation last week, with 38 states and Washington, DC eventually joining.
Navient would have pushed student borrowers into unnecessary and costly periods of forbearance when they would have instead been eligible for income-contingent repayment or Public Service Loan Forgiveness (PSLF). The repairman is also accused of giving loans to students whose debts the company knew were unlikely to be able to repay.
Navient denies allegations that it violated consumer protection laws or caused harm to the borrower. “The company’s decision to resolve these matters, which were based on unsubstantiated claims, allows us to avoid the additional burden, expense, time and distraction that prevails in court,” said the General Counsel. of Navient, Mark Heleen, in a press release.
How it affects student loans
Eligible borrowers in 38 states and Washington, DC, will benefit from the settlement agreement. Navient is required to forgive $1.7 billion in private student loan debt for borrowers who took out certain loans from the company and later defaulted. This will primarily affect borrowers who attended for-profit schools and took out loans between 2002 and 2010.
Navient will also distribute individual restitution payments of approximately $260 to 350,000 borrowers who have been placed on forbearance.
Although the manager has transferred its federally owned student loan products to Aidvantage, a service unit of Maximus, it will continue to manage private loans and private FFELP loans. Navient is now required to inform borrowers of all repayment options, including income-contingent repayment and PSLF, before suggesting forbearance. It will also train unprompted specialists to help borrowers ask questions about their eligibility for forgiveness or repayment.
Beyond ensuring their current residential address is correct, Navient borrowers do not need to take any other action. Those eligible for remission will receive information from Navient regarding their balance by July 2022, and borrowers receiving a restitution payment can expect a postcard from the settlement administrator in the spring of 2022.
Take away key
Eligible Navient borrowers could see their student loan balances forgiven following a $1.85 billion settlement.
Here’s how you can prepare
Whether you’re new to student loans or in the process of repaying, it’s wise to stay informed about how your student loan rates might change. In 2022, more opportunities for cheaper loans or loan forgiveness may open up; keep an eye on the Bankrate student loan news hub for the latest trends.