The Navient lawsuit settlement will allow public servants to get their private student loans canceled and avoid paying interest. However, the plaintiffs continued to pay interest on the balance of the loans and accumulated fees. The court found that the plaintiffs were entitled to a $2.5 million settlement from Navient. But what does the settlement mean? The companies will have to meet certain requirements in order to receive the money. This article will discuss some of the requirements that the Navient must meet in order to obtain a settlement.

Navient to cancel $1.7 billion in private student loan debt

After years of public pressure, Navient has finally canceled $1.7 billion of private student loan debt. The move follows an agreement the company made with the Department of Education. Navient agreed to wipe out a majority of the borrowers’ unpaid loans and transfer their accounts to a rival, Aidvantage. In return for the agreement, Navient will refund borrowers $260 each, which amounts to about $2 billion in unused loans.

This settlement was a long time coming, as the company had deceived hundreds of thousands of students into paying more than they should have. Many of these students benefited from higher interest rates than they were supposed to pay. Because of the deceitfulness of Navient, borrowers were over-indebted, and in many cases, missed payments that would have qualified them for a loan discharge. While the settlement provides relief for many of the borrowers, it does not address allegations against the Department of Education.

It must explain benefits of income-driven repayment plans

The U.S. Department of Education should take additional action to help Navient borrowers pay their loans. The company cheated millions of people and should make income-driven repayment plans available to borrowers. These plans are similar to Public Service Loan Forgiveness. In addition to eliminating the loans, Navient must explain the benefits of these plans to students. They must also explain why income-driven repayment plans are beneficial to borrowers.

The settlement will provide $1.7 billion in financial relief for thousands of borrowers. The settlement also involves the payment of $95 million to states and borrowers harmed by Navient’s predatory practices. While the settlement is welcome news for many Navient borrowers, millions of people will not qualify for its terms and may not receive adequate restitution for their harm. The settlement must make these borrowers aware of income-driven repayment plans.

It must train specialists to advise distressed borrowers about alternative repayment options

The settlement requires Navient to train specialists to counsel distressed borrowers about alternative repayment options, including Public Service Loan Forgiveness. The settlement also requires Navient to refund borrowers for payments on canceled loans after June 30 of 2021. These terms address the broken student loan repayment system. But they do not go far enough. Navient must also fix its mistakes and train specialists to advise distressed borrowers about alternative repayment options.

The company has been accused of engaging in predatory practices by failing to follow borrower instructions. Navient allegedly required distressed borrowers to pay more than they had to in order to bring their accounts current. It also advertised the benefits of cosigner release for private loans but implemented requirements that made it difficult for borrowers to release their cosigners. Moreover, Navient failed to provide adequate information to borrowers about income-driven repayment obligations.

It must give funds to borrowers with low credit scores

Under the terms of the settlement, Navient must give borrowers with low credit scores checks for $260 each. However, to receive a check, borrowers must have delinquent payments for at least seven months. In addition, borrowers must have a mailing address in one of the following states or postal codes by June 30, 2021. The settlement covers federal loans from certain for-profit colleges and universities issued between 2002 and 2014.

As part of the settlement, Navient must follow strict guidelines for lending and collecting, train at-risk borrowers, and limit certain late fees. In September, California Attorney General Rob Bonta called for the federal government to act on student loan debt. Several states, including California, filed suit against Navient last year, and the lawsuit grew in 2018.

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