Student Loan Company Navient to Issue Debt Relief

Students who received aid may qualify for debt cancellation or restitution

Estlin Coates, Staff Writer

The student loan servicer Navient is taking steps to settle claims from a 2017 lawsuit, and affected borrowers can look forward to compensation.

On Jan. 13, Washington Attorney General Bob Ferguson announced that Navient will provide $35 million toward debt relief and $2.3 million toward restitution in the state, as well as $7 million toward costs and fees from Washington’s investigation and litigation.

In March 2021, King County declared that Navient had violated the Consumer Protection Act, according to the Office of the Attorney General. The violation involved reported unfair and deceptive practices, including predatory loan-making, failure to provide borrowers with complete information and penalization of borrowers for early payments set up by the company.

Nationwide, the company is to cancel $1.7 billion of debt and pay $95 million in restitution, according to the Navient Multi-State Settlement informational website.

Who is eligible for relief?

The Attorney General’s Office lists a few groups of people as eligible for debt relief or restitution. Included are individuals who took out subprime student loans — loans with high interest rates offered to those who do not qualify for more conventional loans — between 2002 and 2014. Those borrowers’ remaining debt will be canceled if they had over seven months of delinquent payments before June 30, 2020.

Some restitution is available for borrowers who contacted Navient due to long-term financial hardships and were enrolled in forbearance for a long period of time. With payments from Navient and the Attorney General’s Office, eligible individuals are expected to receive about $500 total.

Borrowers qualifying for any of these benefits are expected to be contacted by either Navient or the Attorney General’s Office in the next few months.