What Navient’s Lawsuit Settlement Means for Your Student Loans

Navient's Lawsuit

Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven. The lawsuit was backed by the American Federation of Teachers, one of the nation’s largest unions. The lawsuit finally reached a proposed settlement in Manhattan federal court.

The settlement would award $15,000 to the plaintiffs and pay $1.75M to fund a new educational program that would provide public service workers counselling on their debt. It would also increase training of Navient workers to properly guide borrowers.  Judge Denise Cote dismissed most of the other teacher’s claims of wrongdoing in July due to lacking or flimsy evidence.

The Department of Education has already been allocated $2.3M by Congress to increase outreach for the  public service loan forgiveness program last year. Democratic Senators Tim Kaine, Sheldon Whitehouse, Tammy Duckworth, and Maggie Hassan already sent a letter to DeVos inquiring into this funding, as well as 23 senators demanding an investigation into other government loan servicers. Of these senators were three previous democratic presidential nominees Bernie Sanders, Elizabeth Warren, and Amy Klobachur. This settlement does not actually forgive any of the student loans that public service workers applied for, nor does it provide the same amount to pay off the average student loan debt, which as of 2019 was $31,172. Therefore anyone with debt held by Navient should not be expecting loan forgiveness from the settlement.

Michelle Labayen

Michelle Labayen

Michelle Labayen has been practicing Consumer and Bankruptcy law for more than 16 years. She is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), and the National Association of Consumer Attorneys ( NACA).

In addition, she is a Max Gardner Bootcamp graduate. Extensive experience has given Michelle a thorough understanding of bankruptcy, including:

  • Chapter 7
  • Chapter 13
  • Adversary Proceedings
  • Litigation under the Fair Credit Reporting Act
  • Litigation under the Fair Debt Collection Practice Act
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Navient's Lawsuit

What Navient’s Lawsuit Settlement Means for Your Student Loans

Back in 2018 nine teachers filed a lawsuit against Navient, one of the government’s student loan servicers for misleading borrowers or blocking them from accessing a public service loan forgiveness program. According to the New York Times, out of the 146,000 applicants to the program at the time, only 3,200 saw their student loans forgiven.

Read More »
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Filling Bankruptcy And Covid-19

Times of crisis always have a significant impact on any country’s economy. Worse, when the country is caught unprepared, and that is what we’ve witnessed around the world. COVID-19 has pushed the “superpowers” to the wall economically, and countries are struggling to remain afloat.

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Contact Michelle, today, and get on the path to financial freedom.

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The Law Office of Michelle Labayen, LLC Can Help With The Bankruptcy Process

Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.

You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, and Newark, NJ. Florida licensed attorney Drew Gaddis is counsel and would be representing all clients in Florida.

Miami Bankruptcy Office

100 SE 2nd St Suite 2000 #A
Miami Tower
Miami, FL 33131
Phone: (786) 209-2327