Sallie Mae Lawsuit Loan Forgiveness

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Sallie Mae Lawsuit Loan Forgiveness

Editor’s note: In 2022, Aidvantage took over for Navient for federal student loans. Additionally, Navient announced on January 13, 2022 that it had reached a settlement with 39 state attorneys general that provided $1.7 billion in forgiveness to certain borrowers with private student loans held by the company. The private student loans were mostly issued by Sallie Mae before 2010, and virtually all of them were in bankruptcy. You may be eligible if you owe private student loans to Navient that are currently in default that you borrowed before 2010. Additionally, 350,000 borrowers with federal loans serviced by Navient that were steered into forbearance will see an average payment of $260. We include all the details of who qualifies and when to expect relief in the article below.

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Navient has consistently ranked as one of the most disliked student loan servicers among borrowers. There are also several Navient lawsuits alleging that the officer’s missteps have indeed entered criminal territory. With so many complaints about customer service and repayment guidance, student loan borrowers need to be aware of Navient student loan forgiveness options.

It is important to understand that there are no exclusive student loan forgiveness programs from Navient. However, there are many general student loan forgiveness programs that Navient borrowers may be eligible for. In addition, some student loan borrowers may automatically be eligible for loan cancellation or repayment due to recent settlement.

Although once the same company, Navient and Sallie Mae are now completely separate organizations. Navient loan forgiveness is not the same as Sallie Mae loan forgiveness.

However, because of their history with Sallie Mae, Navient offers a mix of private and federal student loans. You want to know what type you have. It makes a big difference in what forgiveness programs you qualify for.

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To find out what type of student loan you have with Navient, you can contact them directly or do a “financial review” on the National Student Loan Data System (NSLDS).

If you have federal student loan debt, those loans will be eligible for federal forgiveness programs such as the Public Service Loan Forgiveness (PSLF Program). But private student loans won’t be. Private student loans may be eligible for forgiveness through state or occupation-specific student loan forgiveness programs. For a complete list of programs, check out the Ultimate Guide to Student Loan Forgiveness.

On January 13, 2022, a larger settlement was announced that will provide “relief totaling $1.85 billion to resolve allegations of widespread unfair and deceptive practices in student loan servicing and predatory loan abuse,” according to Pennsylvania’s attorney general.

If you qualify for loan cancellation under this settlement, you will be automatically notified by Navient by July 2022. You should receive a refund for any payments made on the canceled debt after June 30, 2021.

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If you are eligible for refund payments, be sure to update your address and contact information on your StudentAid.gov account from the U.S. Department of Education. You should receive a postcard in the mail from the settlement administrator sometime in the spring of 2022.

Even if you don’t have to do anything to get a loan cancellation or refund under the Navient settlement, you may still be wondering if you qualify.

Here’s a brief summary, including images, from the “Frequently Asked Questions” section of the Navient Multi-State Settlement information website.

If you had federal student loans with Navient, they are likely now with Aidvantage. Here are several forgiveness options available to you.

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Currently, the Office of Federal Student Aid at the Department of Education offers four income-driven repayment plans for its loans.

By taking advantage of these income-driven repayment plans, you may be able to lower your monthly payment amount. Additionally, you may be eligible for Navient Student Loan Forgiveness when you reach the end of your repayment schedule.

Depending on the plan you choose, you will be eligible for forgiveness in 20 to 25 years. But you want to be vigilant to make sure your federal student loan payments are handled correctly. And you must recertify your income and family size every year.

And remember that if you are forgiven, you owe income tax on the forgiven amount. So if income-driven repayment (IDR) forgiveness is your strategy, be sure to save some money each year for the tax bill that comes your way.

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If you work for a qualifying public sector employer, such as the government or a nonprofit organization, the Public Service Loan Forgiveness program is probably your best option for student loan forgiveness. With PSLF, you can earn tax-free student loan forgiveness in as little as 10 years (or 120 qualifying student loan payments).

It should be noted that the Department of Education has selected FedLoan Servicing as the exclusive service provider of the Public Service Loan Forgiveness program. This means that you can only qualify for this program if FedLoan is your servicer. But don’t worry if you’re with Navient right now.

You can apply for PSLF at the StudentAid.gov website. If you are accepted into the program, Navient will automatically transfer your federal student loans to FedLoan Servicing. The Department of Education says it will let you know if you’ve been accepted into the program. However, if it takes longer than you think is reasonable to get a response, you can call FedLoan Servicing at 1-855-265-4038 to request a status update.

Note that Parent PLUS loans do not qualify for PSLF. However, Parent PLUS borrowers can become eligible by taking out a direct consolidation loan. It is also important to understand that with parental PLUS loans it is

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Teachers may be eligible for up to $17,500 in Navient student loan forgiveness through the Teacher Loan Forgiveness Program.

However, to qualify, you must be considered a “highly qualified” teacher by the Federal Student Aid office of the Department of Education. And you must teach five consecutive academic years in a low-income school, high school, or educational service agency.

It’s important to point out that PSLF and student loan forgiveness do not mix well. In many cases, it may be better to stick with PSLF.

This is technically not a “forgiveness” option. However, it should be noted that there are several ways that federal student loan borrowers can become eligible to have their student loans paid off.

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An example is total and permanent disability (TPD) discharge. To qualify for TPD discharge, you must provide medical documentation of your disability. Qualifying total and permanent disability (TPD) loans include direct loans, FFEL loans, and Perkins loans.

The Federal Student Aid Office will also pay off your student loans if you die or, in the case of a parent PLUS loan, your parent dies. Other federal discharge options include discharge from closed school, false certification or unauthorized discharge of payments, and discharge from borrower defense.

If you have private student loans and don’t qualify for one of the above student loan cancellation programs—or even if you do—you may want to consider refinancing your Navient student loans. By refinancing, you can kill two birds with one stone.

It’s your chance to kick Navient to the curb, and you can also save money on student loan interest. So while refinancing isn’t student loan forgiveness, it may be your best Navient student loan strategy.

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But how can student loan borrowers know when refinancing is the right move? Here are three questions to ask yourself:

If you’re just starting to repay student loans, refinancing can save you a lot of money over the life of the loans.

But if you’ve already paid off three years of federal student loan forgiveness for teacher loan forgiveness or five years for public loan forgiveness while working full-time, that completely changes the discussion. If you are already well on your way to earning Navient student loan forgiveness through a federal program, you should avoid refinancing with some private lenders.

If you choose to stay with Navient, make sure you have the right repayment plan and file your taxes correctly. You should also be vigilant in ensuring that Navient handles your loans correctly. If your loans are delinquent with Navient, you may need to contact a student loan attorney.

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When you refinance federal student loans, you will not be eligible to base your monthly payment amount on your income or to apply for federal forbearance or deferment. Your loan type changes from federal to private. So in other words, federal student loan borrowers will have less payment flexibility with private student loans. Rain or shine, the bills will just keep coming — while federal borrowers have taken advantage of the latest payment break and hope Biden’s debt relief will go