Thousands of New York student loan borrowers will get restitution and debt relief as part of a nationwide settlement with Navient to settle claims of deceptive and predatory lending.
Under the multistate agreement announced by a coalition of state attorneys general Thursday, the loan servicing company will cancel $1.7 billion in private student loan debt and pay millions in restitution. The joint lawsuit claimed that Navient, one of the nation’s largest student-loan servicing companies, deceived thousands of student loan borrowers into costly long-term forbearance plans, causing students to pay more than they should have. The agreement will cover borrowers in more than three dozen states, including New York.
State Attorney General Letitia James said more than 25,000 federal loan borrowers in New York will receive an estimated $6.8 million in restitution payments. Additionally, about 4,300 New York borrowers will receive more than $110 million in private loan debt cancellation. New York state will also receive almost $1.2 million in cash.
The agreement requires Navient to better train specialists to advise borrowers concerning alternative repayment options and counsel eligible workers concerning Public Service Loan Forgiveness programs. NYSUT’s national affiliates, the American Federation of Teachers and National Education Association have pushed relentlessly for student loan debt relief, filing lawsuits on behalf of members and testifying before Congress. Last fall, the Biden administration announced a major overhaul and expansion of PSLF.
In a Twitter thread, AFT President Randi Weingarten thanked the attorneys general for pursuing the case and fighting to hold Navient accountable.
For more information on the Navient agreement, go to navientagsettlement.com to find out if it may apply to you.
Some key takeaways:
- Federal loan borrowers who qualify for relief under this settlement do not need to take any action. Be sure to update or create your studentaid.gov account to ensure that the U.S. Department of Education has your current address.
- In Spring 2022, the settlement administrator will send a postcard to each federal loan borrower eligible for a restitution payment, using the most current address on file with the U.S. Department of Education. Federal loan borrowers who are eligible for a restitution payment of will receive approximately $260.
- Borrowers receiving private loan debt cancellation will receive a notice from Navient by July 2022, along with refunds of any payments made on the cancelled private loans after June 30, 2021. Check navientagsettlement.com to see whether you may be in this group.
- Navient must notify borrowers about the U.S. Department of Education’s recently announced PSLF limited waiver opportunity, which temporarily offers millions of qualifying public service workers the chance to have previously nonqualifying repayment periods counted toward loan forgiveness—provided that they consolidate into the Direct Loan Program and file employment certifications by Oct. 31, 2022.
To help thousands of members struggling to understand and get out from crushing debt, NYSUT offers free student loan debt workshops and services in partnership with Cambridge Credit Counseling. Since the COVID-19 pandemic, NYSUT has moved the workshops online, helping hundreds of members with informational webinars and individualized follow-up support.
To find out more about the settlement, PSLF changes and general student loan debt information, sign up for an upcoming student loan debt webinar. The next free sessions are Jan. 20, Feb. 9 and 24; and March 8 and 24. Space is limited.