While debates over President Joe Biden’s attempts to cancel federal student loan debt capture national attention, a little-known program directed by a one-time leading private student loan company is providing relief for eligible borrowers.
Navient, once a major servicer of private and federal student loans, stopped managing federal student loans in 2021. By that point, all federal loans in the Navient portfolio were transferred to another servicer, Aidvantage.
Earlier this year, Navient announced a plan to withdraw from the student loan servicing market. But before the company completely offloads the servicing of its last remaining student loan portfolio, it quietly opened a new loan forgiveness application for private student loan borrowers.
“Navient began quietly sending its new application to a select few borrowers,” said the Project on Predatory Student Lending (PPSL), a legal group advocating on behalf of student loan borrowers, in a statement last week urging eligible borrowers to take advantage of the new initiative.
According to the PPSL, borrowers with private loans who believe they are eligible for relief should ask Navient for a School Misconduct Discharge Application by contacting Navient’s Office of the Customer Advocate or sending an email to [email protected].
Unlike the similar federal Borrower Defense to Repayment program, however, the Navient application asks borrowers to submit supporting documentation along with their application.
Completed applications can be submitted to the same email address, according to the PPSL guidance. The group further advised that, in the case of Navient refusing to provide the application or not responding to the application within 30 days, borrowers should submit a complaint to the Consumer Financial Protection Bureau.
“The application allows borrowers who experienced misconduct at their school to apply directly for discharge of private loans, marking a long overdue recognition of borrower rights,” the group said.
Sen. Elizabeth Warren (D-Mass.), an outspoken advocate for various forms of student loan forgiveness, criticized the company for not making the process easier for eligible borrowers.
This private student loan forgiveness opportunity is limited to borrowers with Navient private student loans. The PPSL said it is not aware of any similar private student loan cancellation process for private student loan holders besides Navient.
As for now, purely private student loans are ineligible for federal student loan repayment and forgiveness programs, and they can’t be consolidated or converted into a federal loan. The Biden administration, which has been working to provide large-scale cancellation of federal student loan debt, is unable to offer the same to private loan borrowers, since private loans aren’t established or funded by Congress and are not subject to executive authority in the same way their federal counterparts are.
By the end of May, the Biden administration authorized the discharge of about $170 billion in student loan debt, according to the most recent figures from the U.S. Department of Education. The sweeping debt cancellation covered at least 4.75 million borrowers who held federal student loans.
