Most individuals who had loans owed to Navient are learning the hard way that they are likely not part of a settlement that was announced last month where the student loan servicing giant announced it was canceling $1.7 billion of delinquent student loans. Those who scrimped and sacrificed to keep making their payments are likely going to have to keep doing so, much to their disbelief, according to a report in The New York Times.
Those who are still on the hook for their payments, especially those who attended for-profit schools that took advantage of unsuspecting or uneducated borrowers are calling for their loans to be wiped away, too. They should not be penalized because they made their payments, they claim.
“It’s incredibly unfair,” said one woman in the report. “If you were defrauded by your school, you were defrauded, and your loans should be released whether you’ve paid on them or not.”
The settlement was reached with 39 state attorneys general after a protracted legal battle that began more than five years ago. The attorney general of California, one of the leaders in reaching the settlement, said the deal focused on those who were “hurt the most by the bad practices — they were the most distressed, the most in need.”
Individuals who were at least seven months behind on their payments as of June 20, 2021 were covered by the settlement. That amounts to about 66,000 people. For them, their private student loans were canceled. For those who were not delinquent, they are expected to continue making payments. Their only recourse, according to the article, is to pursue litigation against Navient.
“You’re relying on state laws that prohibit deceptive practices, and the strength of those statutes varies widely,” said Adam Minsky, a Boston lawyer who specializes in student loan cases and was quoted in the article. “A lot of state court judges are not gong to be sympathetic to allegations that the loan was used to attend a predatory school. There’s a real sense that if you signed for the loan, you have to repay it.”