Student loan borrowers serviced by Navient have until November 20 to seize an opportunity for financial relief as part of a $200 million settlement.
The settlement, reached in July, addresses allegations that Navient continued to collect on debts that should have been discharged in bankruptcy, as per Newsweek.
Student Loan Debt Relief
Navient agreed to eliminate approximately $182 million in student debt as part of the resolution and establish a $16 million fund for borrowers who made payments to the company even after declaring bankruptcy.
Navient, one of the largest private education loan companies in the US with a portfolio exceeding $18 billion, faced legal challenges for allegedly collecting debt from borrowers whose obligations had been erased during bankruptcy proceedings.
Despite denying wrongdoing, the company committed to a significant settlement to rectify the impact on affected borrowers. As the settlement heads for a final approval hearing on December 13 at the US District Court for the Eastern District of New York, eligible borrowers must act quickly to secure their share of the $16 million relief fund.
To be eligible, borrowers must have filed for bankruptcy on or after October 17, 2005, been obligated to repay their loans before filing for bankruptcy, received court approval for loan discharge via bankruptcy, and never reaffirmed their loans, according to Business Insider.
Deadline and Steps for Borrowers
Borrowers seeking to claim their share of the relief fund should file a claim by November 20 using the Unique ID and PIN in the settlement notice. Those who believe they are eligible but have not received a message can contact the settlement administrator at 888-848-0808.
While the amount each borrower will receive is yet to be determined, it could range from 20% to 100% of the damages suffered. However, the distribution of payments will occur after the district court grants final approval to the settlement and resolves any potential appeals, which may take a significant amount of time.
The Navient settlement not only provides financial relief but also addresses the long-standing issue of debt collection practices and serves as a call for reform in bankruptcy laws concerning the dischargeability of student loans.
Navient, in a statement to Newsweek, expressed support for updating bankruptcy laws to allow for the dischargeability of all federal and private student loans after good-faith repayment periods.
Despite the settlement, the company maintains its adherence to relevant bankruptcy rules and regulations, pledging not to collect on properly discharged debts.
As the deadline approaches, eligible borrowers are encouraged to submit their claims promptly, ensuring they can benefit from this rare opportunity for financial relief, Dnyuz reported.
