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Private Student Loan Forgiveness For Teachers
Editor's note: In 2022, Advantage acquires Navient for federal student loans. Additionally, Navient announced on January 13, 2022 that they had reached an agreement with 39 state attorneys general that provided $1.7 billion in forgiveness to certain borrowers with the company's private student loans. Private student loans were mostly issued by Sallie Mae before 2010, and virtually all were in default. You may be eligible if you have a Navient private student loan that is currently in default and that you borrowed before 2010. Also, the 350,000 borrowers with federal loans served by Navient who were included in the forbearance would receive an average payment of $260. We cover the full details of who is eligible and when to expect relief in the next article.
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Navient consistently ranks as one of the most disliked student loan servicers among borrowers. There have also been several lawsuits from the Navy that claim the military's missteps have entered criminal territory. With so many customer service complaints and repayment guidance, student loan borrowers should learn about Naviant's student loan forgiveness options.
It is important to understand that there is no specific Navient student loan forgiveness program. However, there are several general student loan forgiveness programs that Navient borrowers may be eligible for. Additionally, some student loan borrowers may be automatically eligible for loan cancellation or reinstatement payments due to a recent settlement.
Despite once being the same company, Navient and Sallie May are now completely separate organizations. Navient loan forgiveness is not the same as Sallie Mae loan forgiveness.
However, because of its history with Sallie Mae, Navient offers a mix of private and federal student loans. You would like to know what type of loan you have. This makes a big difference in what forgiveness program you qualify for.
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To find out what type of student loan you have with Navient, you can contact them directly or do a "financial review" on the National Student Loan Data System (NSLDS).
If you have federal student loans, those loans will be eligible for federal forgiveness programs, such as Public Service Loan Forgiveness. But private student loans do not. Private student loans may be eligible for forgiveness through state- or company-specific student loan forgiveness programs. For a complete list of programs, see The Ultimate Guide to Student Loan Forgiveness.
On January 13, 2022, a larger settlement was announced that would provide relief totaling $1.85 billion to resolve allegations of "widespread unfair and deceptive student loan servicing practices and predatory student loan origination abuses."
If you qualify for loan cancellation under this settlement, Navient will automatically notify you by July 2022. You should receive a refund for all payments made on loans canceled after June 30, 2021.
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If you qualify for compensation payments, be sure to update your address and contact information on your StudentAid.gov account. You should receive a postcard in the mail from the settlement administrator sometime in the spring of 2022.
While you don't have to do anything to receive loan cancellation or refund payments under Navient's settlement, you may still miss out if you qualify.
Here's a quick summary, including images from the "Frequently Asked Questions" section of the Naviant Multi-State Settlement information website.
If you had federal student loans with Navient, you now likely have with Advantage. There are several forgiveness options available to you.
Student Loan Forgiveness Forms
Currently, the Department of Education's Office of Federal Student Aid offers four repayment plans for your loans.
By taking advantage of these income-based repayment plans, you can lower your monthly payment. Additionally, you may be eligible for Navient Student Loan Forgiveness when you reach the end of your repayment schedule.
Depending on the plan you choose, you can apply for forgiveness in 20 to 25 years. But you want to be on the lookout to make sure your federal student loan payments are being made correctly. And you must re-certify your income and family size every year.
And, keep in mind that if you get the forgiveness, you'll owe income tax on the forgiven amount. So if your strategy is Income Driven Repayment (IDR) forgiveness, make sure you save a little money each year for the tax bill that will come.
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If you work for an eligible employer in the public sector, such as a government or nonprofit organization, the Public Service Loan Forgiveness Program is likely your best option for student loan forgiveness. With PSLF, you can get tax-free student loan forgiveness in as little as 10 years (or 120 qualifying student loan payments).
Note that the Department of Education has selected FedLoan Servicing as the exclusive administrator of the Public Service Loan Forgiveness Program. This means you can only qualify for this program if FedLoan is your servicer. But don't worry if you are with Navient now.
You can apply for PSLF on the StudentAid.gov website. If you are accepted into the program, Navient will automatically transfer your federal student loans to FedLoan Servicing. The Department of Education says it will notify you if you've been accepted into the program. But if it takes longer than you think to get a response, you can call FedLoan Servicing at 1-855-265-4038 to request a status update.
Note that Parent PLUS loans are not eligible for PSLF. However, Parent PLUS borrowers may be eligible by taking out a direct consolidation loan. It is also important to understand that, with Parent Plus Loans, it is
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Teachers may be eligible for up to $17,500 in Navient Student Loan Forgiveness through the Teacher Loan Forgiveness Program.
But to qualify, you must be considered a "highly qualified" teacher by the Department of Education's Office of Federal Student Aid. And you must have taught five consecutive academic years at a low-income elementary, secondary, or educational service agency.
It is important to note that PSLF and teacher loan forgiveness do not mix well. In many cases, it is better to stick with PSLF.
This is not technically a "sorry" option. But keep in mind that there are several ways federal student loan borrowers can be eligible to discharge their student loans.
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An example is a total and permanent disability (TPD) leave. To qualify for TPD discharge, you must provide medical documentation of your disability. Loans eligible for the Total and Permanent Disability (TPD) discharge include Direct Loans, FFEL Loans, and Perkins Loans.
The Federal Student Aid Office will also discharge your student loans if you die or, in the case of one parent plus one loan, one parent dies. Other federal discharge options include closed school discharge, false certification or unauthorized payment discharge, and borrower protection discharge.
If you have private student loans and don't qualify for any of the programs above, or even if you do, you may want to consider refinancing your student loans. By refinancing, you can kill two birds with one stone.
This is your chance to stop Navient and you can even save money on student loan interest. So while refinancing isn't student loan forgiveness, it can be your best student loan strategy.
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But how do student loan borrowers know if refinancing is the right move? Here are three questions to ask yourself:
If you've just started repayments, refinancing can save you a lot of money over the life of your loan.
But if you've already made three years of federal student loan payments for teacher loan forgiveness or five years for public service loan forgiveness, that completely changes the discussion. If you are already on track for Navient Student Loan Forgiveness through a federal program, you should avoid refinancing.
If you decide to stay with Navient, make sure you have the right repayment plan and file your taxes correctly. You should also be on the lookout to make sure Navient is handling your loans properly. If your loan is in default with Navient, you may need to contact a student loan attorney.
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When you refinance federal student loans, you won't be able to get your monthly payment based on your income or apply for federal forbearance or deferment. In other words, federal student loan borrowers will have less repayment flexibility with private student loans. Rain or shine, the bills will keep coming.
So do you have an emergency fund? If not, you may want to reach that goal before refinancing federal student loans.
There are two other financial factors to consider: your credit score and your debt-to-income ratio. If your credit score is above 650 and you owe less than 1.5 times your income, you can
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