Navient agrees to cancel millions in student loans: Who's affected and what happens next

Navient Corp. and student loan servicer Navient Solutions agreed to a settlement that will result in the cancelation of more than $3.5 million in student debt for New Hampshire student loan borrowers, according to the state's Department of Justice.

Merrimack County Superior Court resolved the settlement between Navient and the New Hampshire Attorney General’s Office over allegations against the company that included:

• Giving new loans to subprime students in New Hampshire that ultimately defaulted at higher rates
• Making its billing and payments system difficult for borrowers to control where their payment was being made
• Placing borrowers in long-term financial distress into forbearances without exploring other options
• Failing to give income-driven repayment (IDR) renewal notices that advised borrowers on the urgency of the notifications

"This action provides important relief to New Hampshire student loan borrowers who were victims of Navient's illegal and harmful practices," Attorney General John Formella said. "Our Consumer Protection and Antitrust Bureau works diligently to protect New Hampshire consumers and today's settlement represents another important step in those efforts. I thank our Consumer Protection team for their efforts in this case."

If you're looking for help in repaying student loans of your own, consider refinancing to help lower your interest rate and your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.

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Navient to make improvements on servicing practices

As part of the settlement, Navient agreed to provide $3,590,988.96 in student debt cancelation for 129 qualifying student borrowers in New Hampshire. It also included other changes to the servicer’s systems in order to help prevent a similar allegation in the future. 

Navient must also improve its customer service in these areas: 

• Explain IDR plans and benefits to borrowers and give them an estimated payment amount before placing borrowers into costly long-term forbearances
• Maintain customer service standards like processing payments quickly and accurately, making viewable payment history, directing extra payments to loans with the highest interest rate and allowing borrowers to give instructions to where they want their extra payment directed
• Train specialists to help advise borrowers on repayment options including counseling public service workers on the public service loan forgiveness program (PSLF)

The canceled loans mostly originated between 2002 and 2010, and later defaulted. Borrowers who qualify for the cancellation will receive a notice from Navient in the coming months and require no action on their part to obtain the benefit. 

Back in January, Navient canceled more than $1.7 billion in student loans to settle litigation with various state attorneys general. The agreement would cancel student loans for about 66,000 borrowers in 36 states and Washington, D.C.  

If you are interested in paying down your student debt from private lenders or lowering the monthly payments, consider a refinance. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.

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How you can pay down your student debt

Student loan debt increased by $14 billion in the first quarter of 2022 to a new high of $1.59 trillion, according to the Federal Reserve Bank of New York. The amount now accounts for about 10% of total household debt. 

Federal student loan repayment plans are currently paused via a federal forbearance. Borrowers may also have some of their student loan debt canceled if the White House cancels student debt altogether. But, unlike federal student loan borrowers, private loans wouldn't qualify for loan forgiveness. 

If you are interested in paying down your student loans, there are several options available to pay down loan balances: 

1. Cash-out refinancing

Home prices are currently at all-time highs and continue to surge, even rising in markets that are typically inexpensive. But homeowners can take advantage of their newfound equity with a cash-out refinance — doing so could help pay down their student debt by consolidating payments and lowering interest rates. Visit Credible if you are interested to get prequalified for a home loan in minutes.

2. Refinance your student loan

Refinancing your private student loans can help you significantly reduce your monthly payments by changing the loan terms like repayment periods and lowering your interest rate.

Once the interest rate is lowered, borrowers can pay down their loans more quickly by allotting more money to the principal balance of the loan. Contact Credible to speak to a home loan expert and get all of your questions answered.

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