Navient Student Loan Forgiveness: What Borrowers Need to Know

Navient, once a major servicer of private and federal student loans, is offering rare private student loan forgiveness to some borrowers who were defrauded by their schools, as of May 2024.

It’s the latest student debt cancellation effort for Navient borrowers. In 2022, the company delivered $1.7 billion in debt cancellation to approximately 66,000 private loan borrowers, after five years of litigation with 39 state attorneys general. An additional 350,000 federal student loan borrowers who previously had Navient as a servicer received about $260 each in restitution in 2022.

A similar lawsuit filed by the Consumer Financial Protection Bureau (CFPB) in 2017 is ongoing.

Navient was, at one time, the largest student loan servicer after its parent company Sallie Mae moved its portfolio to it in 2014. Navient ended its federal student loan servicing contract after December 2021 and its portfolio was then transferred to Aidvantage. In February 2024, Navient said it would exit the student loans business entirely, and transfer its outstanding private student loans to the servicer MOHELA.

Here’s what you need to know about the Navient student loan forgiveness program, the settlement with the state attorneys general and the ongoing lawsuit with the CFPB.

What is the Navient student loan forgiveness program?

On May 30, the Project on Predatory Lending (PPSL) launched a campaign to publicize a student loan forgiveness program that Navient had been quietly offering to some borrowers. According to PPSL, Navient has recently begun sending out a “school misconduct discharge” application to a select group of borrowers who were defrauded by their colleges.

“Private student loans have always carried basic consumer protections like borrower defense, yet lenders and servicers have obstructed borrower efforts to realize them, individually or at scale,” said Eileen Connor, president and executive director of PPSL, in a statement.

This is the only known student loan forgiveness program for private student loans. It’s similar to borrower defense forgiveness, which can erase federal student loan debt for borrowers who believe they’ve been misled or defrauded by their schools.

How to get Navient student loan forgiveness

If you attended a predatory school and want to challenge your Navient private student loans, ask Navient for a school misconduct discharge application, the PPSL advises. You can reach Navient by calling Navient’s Office of Consumer Advocate at 888-545-4199, extension 998214. You may also send an email to [email protected].

The application will ask you to explain how your school deceived you. An example of the loan discharge application is available here. Include as many details as possible, such as:

• Dates. 

• Amounts owed. 

• How specifically your school lied to you, misled you or harmed you financially. 

You must also submit supporting documentation, which may include:

• Notice of your federal loans being forgiven under borrower defense for the same school.

• An Education Department announcement about a federal loan discharge for borrowers who attended your school. 

• Public information about lawsuits and investigations related to your school.

• Original documents from your school that prove misrepresentation or deceptive recruitment tactics, like financial aid claims, recruiter statements or job placement claims. 

Submit your completed application by mailing it to: Navient, P.O. Box 4200 Wilkes-Barre, PA 18773-4200. Or, you can email the application to [email protected].

If Navient refuses to send you an application, doesn’t respond to your submitted application within 30 days or denies your application, consider filing a student loan complaint with the CFPB, which is the federal agency responsible for overseeing private student loans. For more details, check out the PPSL’s guide to Navient student loan forgiveness.

How will I know if my private Navient loans are cancelled?

Navient notified all borrowers who were affected by cancellation, according to the company. Private loan borrowers received notification of their cancelled loans by July 2022, including any refunds of payments made on the cancelled loans after June 30, 2021.

The cancellation impacted borrowers with private student loans originated by Sallie Mae between 2003 and 2014 that defaulted and were charged off. The settlement cancelled remaining balances, totaling about $1.7 billion, for borrowers who attended for-profit colleges with very low graduation rates. The lawsuit alleged that Navient knew most borrowers could not repay the loans but wanted to secure preferred-lender status with the schools.

The cancellation was automatic, and borrowers did not need to do anything to have their qualifying debts wiped away.

Federal student loan borrowers do not receive debt cancellation as a result of the settlement.

How will I receive restitution for my federal student loans?

The $260 restitution applies to federal student loan borrowers in certain states whose loans were previously serviced by Navient and whose loans were placed in certain types of long-term forbearances between October 2009 and January 2017.

The settlement administrator mailed postcard notices to borrowers receiving the $260 restitution on Apr. 22, 2022, according to Navient. Payments went out on July 29, 2022.

What is the CFPB Navient lawsuit?

The 2022 settlement with 39 states is separate from the ongoing litigation stemming from a suit filed by the CFPB in January 2017, but the arguments are largely the same.

Among other things, the CFPB alleges that since at least January 2010, Navient has:

• Misallocated payments

• Steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and

• Provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release.

In September 2019, the lawsuit uncovered an internal memo that shed light on Navient's strategy for collecting loan payments. It was written in 2010 by a senior director at Navient's former parent company, Sallie Mae. On the topic of forbearance, the memo indicated, "Our battle cry remains 'forbear them, forbear them, make them relinquish the ball.' Said another way, we are very liberal with the use of forbearance once it is determined that a borrower cannot pay cash or utilize other entitlement programs."

The CFPB, like the state attorneys general suits, argue Navient steered federal student loan borrowers away from income-driven repayment plans and toward forbearance — a temporary pause in payments. Forbearance can be used in multiple situations, such as job loss or any other decrease in income. However, forbearance can increase the overall debt borrowers owe because interest continues to build and is added to the principal when repayment begins again.