Navient Loan Forgiveness Lawsuit

Navient recently (in May 2020) settled a lawsuit brought by public sector employees (teachers) who had claimed they had been denied access to a loan forgiveness program designed for government employees.

Instead, the borrowers alleged, they continued to pay interest and principal on their loans, from which Navient accrued fees.

While the Judge Denise Cote dismissed most of the teachers’ claims in July 2019, the parties began mediated settlement talks that culminated in the May agreement.

That agreement will see Navient change its practices to help guide eligible public sector employees towards the Public Service Loan Forgiveness Program

  • Providing $1.75m to fund a body to educate eligible borrowers about the availability of the program
  • Paying $15,000 to each of the 10 plaintiffs
  • Training its customer service representatives to connect eligible borrowers with the Public Service Loan Forgiveness Program

American Teachers Federation loan forgiveness lawsuit

The teachers’ complaint accused Navient of negligently blocking their access to the program by failing to accurately explain its rules and requirements. Several said they had spent years making payments, only to discover too late that the payments hadn’t counted toward having the loans forgiven.

In simple terms, the Public Service Loan Forgiveness Program is designed to allow people who work in vital but low-paid public service roles to have their remaining student loans forgiven after 10 years of payments.

But the scheme’s complex rules have seen few applicants succeed with their claims for forgiveness.

The loan servicer pledged to make changes in how it guides borrowers seeking to use a problem-plagued program for public service workers.

To end a lawsuit brought by a group of teachers, Navient, one of the nation’s largest student loan servicers, has agreed to alter its practices for identifying and guiding public service workers se

The suit centered on the notoriously troubled public service loan forgiveness program. It’s supposed to aid people who work in vital but often low-paying government or nonprofit jobs by allowing them to have their remaining education debt eliminated after a decade of work and loan payments.

But a gantlet of complex rules has disqualified nearly all of those seeking relief. Just 3,200 of the program’s 146,000 applicants have had their loan forgiveness approved, according to the latest Education Department data.

Further Navient loan forgiveness lawsuit settlements?

The court will now decide if a notice about the proposed settlement will be sent to everyone who had a loan serviced by Navient from late 2007 onward and who indicated an interest in the public-service forgiveness program.

That could potentially see loan forgiveness or settlement payments extended to a range of public sector employees.

Keep checking our Navient lawsuit settlements page for more information.