With an estimated $1.7 billion of outstanding student loan debt in the United States, it is no surprise that student loan servicer Navient’s settlement with several state attorneys general was major news recently. The headlines of this news screamed “student loan borrowers to have student loan debt wiped out!!” … but as is customary, the headlines do not tell the whole story.
The settlement will only impact an estimated 66,000 borrowers, who will have their student loans wiped out. An additional 350,000 borrowers will receive a nominal payment of $260 for restitution. So who qualifies to have their student loans forgiven? It will primarily be borrowers that took loans between 2002 and 2014, and whose loans are “private” student loans.
Notices to those that will have their loans forgiven will be mailed in July, 2022. To confirm borrowers have their address updated it is suggested that borrowers set up an account through the US Department of Education at www.studentaid.gov. I routinely advise my bankruptcy clients to do this regardless because there are numerous income based repayment plan options to help address student loan debt. Even if your debt is not affected by the Navient settlement, it is a good idea to explore the available programs to pay down your student loans.