Thousands of student-loan borrowers are getting their debt wiped out. Here's how to know if you're one of them.

Thousands of student-loan borrowers are getting their debt wiped out. Here's how to know if you're one of them.
Getty Images
  • Student-loan company Navient Thursday reached a $1.85 billion settlement with 39 attorneys general.
  • Navient will cancel $1.7 billion in private student debt for 66,000 borrowers.

You could be one of the thousands of student-loan borrowers who will receive relief from one of the largest and most controversial student-loan companies in the country.

Navient reached a $1.85 billion settlement on Thursday with a coalition of 39 attorneys general to resolve allegations of "widespread unfair, deceptive, and abusive student loan servicing practices and abuses in originating predatory student loans," a press release said.

The attorneys general said Navient steered student-loan borrowers into deeper debt instead of setting them on track for affordable repayment plans. They also alleged Navient originated "predatory" private student loans for borrowers who attended for-profit schools, regardless of their abilities to afford paying those loans back.

Navient denied any wrongdoing, saying in a press release its decision "to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court."

Within the terms of the settlement, Navient is required to cancel $1.7 billion for 66,000 borrowers with private student loans and distribute $95 million in restitution payments — about $260 each — to about 350,000 federal borrowers who were placed in long-term forbearance.


Here's how to know if you qualify for that debt relief.

Do I qualify for restitution payments?

You qualify if you live in one of these states:

  • Arizona, California, Colorado, Connecticut, Washing, DC, Delaware, Florida, Georgia, Hawaii, Iowa, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Minnesota, Missouri, North Carolina, Nebraska, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, Washington, or Wisconsin.

And meet these terms:

  • Lived in a participating state since January 2017.
  • Entered repayment on a direct-loan program before January 2015.
  • Had at least one federal loan eligible for income-driven repayment.
  • Had at least two consecutive years of loan forbearance between October 2009 and January 2017.
  • Didn't enroll in income-driven repayment before forbearance.

If you meet these criteria, you likely qualify for restitution payments. You will not need to take any action to receive this relief. In spring, if you are eligible, you will receive a postcard to the address on file with the Education Department.

Do I qualify for private-student-loan cancellation?

If you live in one of the states included in the settlement, plus:

  • Arkansas, Kansas, Michigan, Rhode Island, South Carolina, Vermont, West Virginia, or a military address postal code.

And you meet one of these terms:

  • Took out a private subprime student loan — loans for borrowers with low credit scores — through Sallie Mae (Navient's predecessor) between 2002 and 2014 and had more than seven consecutive months of late payments before June 30.
  • Or received a loan to attend a for-profit school on this list.

If you meet these terms, you likely qualify for loan forgiveness. As with the restitution payments, you will not need to take any action to receive relief. Navient will notify eligible private loan borrowers of their forgiveness in writing by July.