Perkins Loans: Navient's Role And Responsibility Explored

Navient is a student loan servicer that has been the subject of regulatory action by the Consumer Financial Protection Bureau (CFPB). The CFPB has banned Navient from servicing federal student loans due to its history of regulatory violations, including illegally overcharging servicemembers and steering borrowers towards costly repayment options. Navient was one of the largest federal student loan servicers before it ended its contract with the Education Department and moved millions of accounts to Aidvantage. While it no longer services federal student loans, Navient still services FFEL Program loans and private student loans. The company has also been ordered to pay $120 million in restitution to harmed borrowers. As for Perkins loans, they were federal loans that were discontinued in 2017, with the last loans issued in 2018. Perkins loans are not eligible for IDR plans, but borrowers may qualify for loan forgiveness or cancellation through other programs.

Navient no longer services Perkins loans

Navient, formerly known as Sallie Mae, was the largest student loan servicer in the United States. It serviced more than $300 billion in federal and private student loans for over 12 million borrowers. However, Navient has faced numerous lawsuits and regulatory violations, including illegally overcharging servicemembers and steering borrowers towards costly repayment options. As a result, Navient was banned from servicing federal student loans in 2021 and ordered to pay $120 million in restitution to affected borrowers.

Following the ban, Navient's federal student loans were transferred to Aidvantage, a new servicer. Aidvantage is now responsible for managing the loans and providing customer support. Borrowers can access their Aidvantage account online to view their monthly billing statements, make payments, and enrol in autopay. They can also contact Aidvantage's customer service department for assistance.

While Navient no longer services federal student loans, it still operates in the private student loan market. Navient continues to service and manage millions of private student loans for different lenders. Additionally, Navient owns a portfolio of private student loans worth $17 billion.

Perkins loans were federal loans designed for students with substantial financial needs. The program was discontinued in 2017, and the last Perkins loans were issued in 2018. Although the Perkins loan program has ended, forgiveness and cancellation programs are still available for borrowers. These include options for teachers, first responders, public service workers, and some volunteers.

Perkins loan forgiveness programs still exist

Navient is a company that provides technology-enabled education finance solutions. While it is not clear whether Navient has Perkins loans, it is known that Navient services student loans.

The Perkins loan program was discontinued in 2017, with the last Perkins loans issued in 2018. However, the Perkins loan forgiveness programs still exist. If you have a Perkins loan, you may be eligible for forgiveness, or if you consolidate your loans, you may qualify for other federal forgiveness options.

Public Service Loan Forgiveness (PSLF)

Under PSLF, Perkins loan holders who work in a public service position are eligible to have their debt partially or fully erased after five years or 10 years' worth of payments. This includes working for the government or a nonprofit organization.

Perkins Loan Cancellation Program for Teachers

Eligible teachers can qualify for cancellation of up to 100% of their outstanding Perkins loans. To qualify, teachers must work full-time in a public or nonprofit elementary or secondary school and meet one of the following requirements:

• Teach in a school serving students from low-income families
• Teach mathematics, science, foreign languages, bilingual education, or in another field determined by the state to have a shortage of qualified teachers

A percentage of the Perkins loan balance is canceled for each year of service, and the cancellation amount also covers the accrued interest. By the fifth year of service, 100% of the Perkins loan would be canceled.

Loan Forgiveness for First Responders, Public Service Workers, and Some Volunteers

In addition to the Perkins loan cancellation program for teachers, there is a loan forgiveness option for first responders, public service workers, and some volunteers.

Income-Driven Repayment (IDR) Plans

Borrowers who are not eligible for Perkins loan forgiveness or cancellation programs may qualify for loan forgiveness through Income-Driven Repayment (IDR) plans. IDR plans base payments on a percentage of discretionary income, and the remainder is forgiven if there is still a balance at the end of the IDR loan term. Perkins loans are not eligible for IDR plans, but if you consolidate your debt with a direct consolidation loan, you can access other payment plans, including IDR plans.

Teachers can qualify for Perkins loan cancellation

Although the Perkins student loan program has ended, the Perkins loan forgiveness programs continue. Teachers can qualify for Perkins loan cancellation under certain conditions.

Teachers can qualify for cancellation of up to 100% of their outstanding Perkins loans if they teach full-time in a public or nonprofit elementary or secondary school. They must also meet one of the following requirements: teach in a school serving students from low-income families, teach mathematics, science, foreign languages, bilingual education, or teach in another field determined by their state to have a shortage of qualified teachers.

A percentage of the Perkins loan balance is canceled for each year of service, and the cancellation amount also covers the interest accrued during each year. By the fifth year of service, 100% of the Perkins loan would be canceled. Teachers in early childhood education programs, such as Head Start or other state-licensed pre-kindergarten and childcare programs, may also qualify for Perkins loan cancellation.

It is important to note that there is no standard application form for Perkins Loan Public Service and Employment-based cancellations. To apply for loan cancellation, individuals should contact the school they attended when they received the Perkins Loan or, if directed by the school, the school's designated Perkins Loan servicer. Additionally, borrowers should request cancellation and document their eligibility to the school's satisfaction to receive a pre-cancellation deferment of repayment until they complete each year of service and the applicable loan percentage is canceled.

Perkins loans aren't eligible for IDR plans

Perkins loans are not eligible for IDR plans. However, if you consolidate your Perkins loans with a direct consolidation loan, you can gain access to IDR plans. Once your Perkins loans are consolidated, you can enrol in an IDR plan and start working towards loan forgiveness.

IDR plans, or income-driven repayment plans, base your payments on a percentage of your discretionary income. If you still have a balance at the end of the IDR loan term, the remainder is forgiven.

Perkins loans are federal loans that were issued to students with substantial financial need. The government covered the accrued interest on these loans while the borrower was in school. The Perkins loan program ended in 2017, and the last Perkins loans were issued in 2018. As of March 2023, 1.2 million people still had outstanding Perkins loans, owing a combined $3.7 million.

If you are a borrower with outstanding Perkins loans, you may be eligible for forgiveness or cancellation. There are different forgiveness and cancellation benefits available to Perkins loan borrowers in certain occupations or repayment plans. For example, under the Perkins loan cancellation program, eligible teachers can qualify for the cancellation of up to 100% of their outstanding Perkins loans. To qualify, teachers must work full-time in a public or nonprofit elementary or secondary school and meet at least one of the following requirements: teach in a school serving students from low-income families, teach a subject such as mathematics, science, or foreign languages, or teach in another field determined by their state to have a shortage of qualified teachers. For each year of service, a percentage of the teacher's Perkins loan balance is canceled, including the interest accrued during that year. By the fifth year of service, 100% of the loan is canceled.

Navient has been banned from federal student loan servicing

Navient, formerly known as Sallie Mae, has been banned from federal student loan servicing by the Consumer Financial Protection Bureau (CFPB). The CFPB filed a proposed order against Navient for its years of failures and lawbreaking. The company steered struggling borrowers towards high-cost repayment plans, illegally overcharged nearly 78,000 servicemembers, and deprived student borrowers of opportunities to enrol in more affordable income-driven repayment plans.

The proposed order, if entered by the court, would ban Navient from servicing federal Direct Loans and acquiring most loans under the Federal Family Education Loan Program. It would also forbid the company from conducting consumer-facing servicing activities for the Federal Family Education Loan Program.

Navient has also been ordered to pay $120 million in fines and compensation to borrowers. This includes a $100 million redress to consumers and a $20 million penalty to the CFPB's victims' relief fund.

The CFPB's lawsuit and order against Navient are the result of years of investigations and litigation. As early as 2014, Navient and its predecessor Sallie Mae were found to have ignored the 6% interest cap for servicemembers and unfairly conditioned benefits on made-up and difficult-to-attain qualifications. In 2017, the CFPB sued Navient for failing borrowers at every stage of repayment. In 2018, Senator Elizabeth Warren uncovered an audit of Navient conducted by the ED, indicating that the company boosted its profits by steering borrowers into high-cost plans. This finding was verified by the ED Inspector General in 2019.

The ban on Navient from federal student loan servicing and the associated fines and compensation are intended to hold the company accountable for its actions and protect borrowers' rights.

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