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Navient Agrees to Forgive Millions of Student Loans: Who’s Affected and What Happens Next?

Navient has agreed to forgive millions of student loans in New Hampshire. (iStock)

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

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

  • Give new loans to New Hampshire subprime students who ultimately defaulted at higher rates
  • Make its billing and payment system difficult for borrowers to track where their payment was made
  • Put borrowers in long-term financial difficulty into forbearance without exploring other options
  • Failure to give Income-Based Repayment Renewal (IDR) notices advising borrowers of the urgency of notifications

“This action provides significant relief to New Hampshire student borrowers who have been victimized by Navient’s illegal and harmful practices,” Attorney General John Formella said. “Our Consumer Protection and Antitrust Bureau is working 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 matter. .”

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

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Navient will make improvements to maintenance practices

As part of the settlement, Navient agreed to provide $3,590,988.96 in student debt forgiveness for 129 eligible student borrowers in New Hampshire. It also included other changes to the duty officer systems to help prevent a similar allegation in the future.

Navient also needs to improve its customer service in these areas:

  • Explain the plans and benefits of IDR to borrowers and give them an estimate of the payment amount before placing borrowers in costly long-term forbearances
  • Maintain customer service standards such as processing payments quickly and accurately, creating a searchable payment history, routing additional payments to loans with the highest interest rate, and the ability to borrowers to give instructions on where they want their additional payment to be directed
  • Train specialists to help advise borrowers on repayment options, including advising civil servants on the Civil Service Loan Forgiveness Program (PSLF)

The canceled loans were mostly contracted between 2002 and 2010 and then defaulted. Borrowers who are eligible for cancellation will receive notice from Navient in the coming months and will not require any action on their part to obtain the benefit.

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

If you’re interested in paying off your student debt with private lenders or lowering monthly payments, consider refinancing. 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 off 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 represents about 10% of total household debt.

Federal student loan repayment plans are currently on hold via federal forbearance. Borrowers may also have some of their student loan debt forgiven if the White House completely cancel student debt. But, unlike federal student loan borrowers, private loans would not qualify for loan forgiveness.

If you are interested in repaying your student loans, you have several options for repaying the balance of your loans:

1. Refinancing by collection

Home prices are currently at record highs and continue to surge, even rising in generally inexpensive markets. But homeowners can take advantage of their newfound equity with a cash refinance — it could help pay off student debt by consolidating payments and lowering interest rates. Visit Credible if you want to be prequalified for a home loan in minutes.

2. Refinance your student loan

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

Once the interest rate is reduced, borrowers can repay their loans faster by allocating more money to the principal balance of the loan. Contact Credible to speak with a mortgage expert and get all your questions answered.

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.