Navient Private Loans: What You Need To Know

Navient, a major servicer of private and federal student loans, has been accused of illegal and deceptive practices, resulting in a ban from the federal student loan servicing business. While the company no longer manages federal loans, it continues to service private student loans and FFEL Program loans. Navient has offered rare private student loan forgiveness to borrowers defrauded by their schools, and borrowers with private loans originated by Sallie Mae between 2003 and 2014 may also be eligible for cancellation. The company holds a significant portfolio of private education loans, and its private loan borrowers have faced issues with cosigner release and credit score improvement.

Navient's private student loan forgiveness

Navient has been involved in a series of controversies and lawsuits regarding its lending practices. In 2024, the company introduced a private loan forgiveness option for borrowers who took on high-interest loans to attend for-profit schools known for misconduct, such as the Art Institutes, ITT Tech, and Westwood College. This initiative is separate from Navient's previous legal settlements.

The private loan forgiveness program, officially called the "School Misconduct Discharge Application," provides relief for borrowers with high-interest loans from predatory for-profit schools. To be eligible for this program, your private student loans must be serviced by Navient, and your educational institution must have engaged in misconduct. This includes making untrue or misleading statements to persuade attendance or enrolment, concealing or omitting information, or using deceptive recruitment tactics.

If you believe you are eligible for Navient's private student loan forgiveness program, you can follow these steps:

• Obtain the School Misconduct Discharge Application by contacting Navient by phone at (888) 545-4199 or by email at [email protected].
• Fill out the application form thoroughly and concisely, explaining why you believe you are entitled to relief. Include specific details such as dates, amounts owed, and how your school misled or deceived you.
• Strengthen your case by gathering supporting documents, such as notices of approval from the Department of Education or public announcements of misconduct related to your school.
• Submit your completed application to Navient by mail.

It is important to note that Navient's private loan forgiveness program is not available to all private student loan holders. Additionally, refinanced or fully repaid loans typically do not qualify for this program. If Navient refuses to send you an application, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

Navient's FFELP loans

Navient is a student loan servicer that has been in the business since at least 2004. In 2021, Navient stopped servicing federal student loans. The company has also been banned by the Consumer Financial Protection Bureau (CFPB) from ever re-entering the federal student loan servicing business. This ban was the result of a seven-year legal saga, during which Navient was found to have engaged in illegal activities such as depriving student borrowers of opportunities to enrol in more affordable income-driven repayment plans and forcing them to pay more than they should have. As part of the CFPB settlement, Navient must pay $100 million in restitution to borrowers it harmed.

Navient's student loan portfolio is split between private student loans and commercially held loans from the Federal Family Education Loan Program (FFELP). The company holds $38 billion worth of FFELP loans and $17 billion in private education loans. In early 2024, Navient announced its intention to offload its FFELP and private student loan portfolio to MOHELA. This transfer is currently underway, and Navient will retain ownership of the entire portfolio while MOHELA will manage it. Borrowers with commercially managed FFELP loans held by Navient are eligible to consolidate these loans into a federal direct loan, which provides access to federal student loan benefits such as income-driven repayment (IDR) plans and loan forgiveness programs.

If your federal loans were held by Navient before December 31, 2021, they were likely transferred to Aidvantage. You can confirm your current servicer by logging into your StudentAid.gov account or by contacting any of the loan servicer contact centres.

Navient's private loan debt relief

Navient, a large owner of private student loan debt, has created a program that allows borrowers to apply to have their loans forgiven. This program is not publicized, and many borrowers are unaware of it. The Project on Predatory Student Lending, an advocacy group in Boston, has published Navient's application form and an instruction guide for borrowers with private loans seeking relief on the grounds that their school misled them.

In addition to the relief provided by Navient's private loan forgiveness program, the Consumer Financial Protection Bureau (CFPB) has banned Navient from the federal student loan servicing business and ordered the company to pay $120 million for widespread student lending failures. This includes a $20 million penalty and a $100 million redress for affected borrowers. The CFPB's investigation into Navient's practices revealed that the company had engaged in illegal activities such as steering borrowers into costly repayment options and depriving them of opportunities to enroll in more affordable income-driven repayment plans. These efforts have resulted in more than $50 billion in debt relief for over 1 million borrowers.

If your federal loans were previously held by Navient, they may have been transferred to Aidvantange as of December 31, 2021. You can confirm your current servicer by logging into your StudentAid.gov account or by contacting the loan servicer contact centers. Your new federal student servicer can assist you with tasks such as registering for online access to your account, enrolling in autopay, and signing up for income-driven repayment plans.

It is important to note that Navient is still servicing FFEL Program loans issued by the government and owned by private lenders, and it continues to serve as a private student loan lender. If Navient is your current or former student loan servicer or private lender, you can expect to receive updates about the planned transfer of your loan servicing to MOHELA in the coming months.

Navient's private loan forgiveness

Navient, formerly known as Sallie Mae, was one of the largest servicers of federal and private student loans in the United States. However, in 2021, Navient stopped servicing federal student loans and began the process of transferring its private student loan portfolio to MOHELA. As of June 2024, Navient announced its intention to exit the student loans business entirely.

Despite no longer servicing federal student loans, Navient continues to service loans issued by the government and owned by private lenders under the Federal Family Education Loan Program (FFELP). Navient also serves as a private student loan lender, holding $17 billion worth of private education loans.

Navient Private Loan Forgiveness:

As Navient transitions its student loan portfolio to MOHELA, borrowers with Navient loans can still take advantage of the company's private loan forgiveness programs. Navient has introduced a private loan forgiveness program for borrowers if their school engaged in misconduct or if borrowers believe they have been misled or defrauded by their schools. This program is similar to borrower defence forgiveness, which can erase federal student loan debt in similar circumstances.

To apply for Navient's private loan forgiveness program, borrowers can request a ""school misconduct discharge" application from Navient. If Navient refuses to send an application, does not respond within 30 days, or denies the application, borrowers can file a student loan complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB is the federal agency responsible for overseeing private student loans and has taken action against Navient for its failures and lawbreaking in the student loan servicing business. As a result of a settlement with the CFPB, Navient is required to pay $100 million in redress to affected borrowers and a $20 million penalty.

It is important for borrowers to keep in mind that their loans may continue to be serviced by MOHELA even after the transfer from Navient. MOHELA will manage the loan portfolio, but Navient will retain ownership. Borrowers can save copies of their payment history and loan forgiveness progress during the transition to ensure they have documentation in case any issues arise.

Navient's private student loan cancellation

Navient, a major servicer of private and federal student loans, has recently offered a private student loan forgiveness program for borrowers defrauded by their schools. This program has not been publicized, but a non-profit group of lawyers has stepped in to help borrowers seeking relief.

The Project on Predatory Student Lending, an advocacy group in Boston, published Navient's application form and an instruction guide for borrowers. This initiative is intended for those who took out private loans to attend for-profit schools that misled them.

Navient's loan forgiveness program is a significant development, as people with private loans have generally been excluded from relief efforts until now. In the past, government aid programs have focused on eliminating federal student loans for borrowers who were defrauded by for-profit schools.

In 2022, Navient faced litigation with 39 state attorneys general, resulting in a $1.7 billion debt cancellation for approximately 66,000 private loan borrowers. Additionally, 350,000 federal student loan borrowers who previously had Navient as a servicer received restitution in 2022.

As of October 21, 2024, MOHELA, a non-profit, governmental corporation, has taken over the servicing of Navient's student loans. Borrowers can now access their loan information through MOHELA's website, servicing.mohela.com, using their existing user IDs and passwords.

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