Navient and AFT Members, Nationwide Class Agree to Settle Loan Forgiveness Suit

NEW YORK—Loan servicing company Navient Solutions LLC has agreed to enhance its call center practices as part of a multipronged settlement preliminarily approved by a federal judge, in a putative nationwide class action brought by members of the American Federation of Teachers.

On June 19th, Judge Denise L. Cote of the United States District Court for the Southern District of New York gave preliminary approval to the terms of the settlement. Under the settlement, Navient agrees to enhance its internal practices and policies, including training customer service agents to take additional steps to identify borrowers potentially eligible for relief under the Public Service Loan Forgiveness program and provide them with information about the program and how to qualify.

AFT members brought the suit in October 2018, challenging Navient’s practices with respect to advising federal student loan borrowers about the Public Service Loan Forgiveness program, a federal government relief program that forgives the remaining balance on certain public service workers’ federal student loans after 10 years of making qualifying payments. The proposed class consisted of teachers, nurses, first responders, school support staff, higher education faculty and social workers, who have dedicated their lives to helping others.

AFT President Randi Weingarten hailed the settlement as great news for borrowers hoping to access PSLF: “This exceptional agreement is a big step forward that will help millions of borrowers get the relief they need—and were promised by the federal government—by enhancing the resources available to them through their loan servicer. Developed by Navient with input from our members, these enhanced practices will assist public service workers on their journey to realize the federal government’s bipartisan promise of public service loan forgiveness.

“The agreement is a good illustration of how borrowers and servicers can work together for the benefit of both parties. It acknowledges that PSLF is a vital program for many graduates who forgo larger salaries in the corporate sector to serve the public instead. The student debt crisis has impacted an entire generation and put the promise of higher education further and further out of reach. This settlement is an important part of combating that crisis.”

Under the settlement, Navient will hold a stakeholder meeting with the 10 plaintiffs to hear firsthand about their challenges with PSLF and will use that feedback in implementing the agreed-upon practice enhancements. The agreement requires Navient to train its customer service representatives on these new practices, which they will use when reviewing and determining borrower eligibility for loan forgiveness. These practice enhancements will be used whenever borrowers express an interest in exploring repayment options or say they are having difficulty repaying their loans, and Navient will report on its compliance.

Lead plaintiff Kathryn Hyland said the settlement provides a noteworthy illustration of a servicer enhancing policies and practices with input from borrowers. “We are looking forward to working with Navient on this innovative approach to improving borrower education. Real solutions to society’s biggest problems require a commitment from all of us—with this agreement, Navient is doing its part to help borrowers access loan forgiveness, which the federal government promised as a path toward relieving the heavy burden of student debt for public service workers—and, as plaintiffs, we couldn’t be more pleased.”

As part of the settlement, Navient agents would receive additional training to listen for keywords or phrases that indicate potential borrower eligibility for the PSLF program and to ask probing questions about possible employment by a government or not-for-profit organization. Borrowers who appear to be eligible would then be provided with more information regarding loan forgiveness, directed to the Federal Student Aid website or the federal government’s designated servicer for PSLF, or sent additional information by email.

Navient has also agreed to pay $1.75 million to a cy pres organization, to be agreed upon by the parties, that provides student loan counseling and education to borrowers who work in public service. These funds will give borrowers across the country an additional avenue to access information about PSLF, helping a future generation of public service workers to serve their communities.

Final approval of the agreement is expected within months. The case is Hyland et al. v. Navient Corp. et al., United States District Court for the Southern District of New York, No. 18-cv-9031. Plaintiffs are represented by Faith Gay, Maria Ginzburg, Lena Konanova, and Margaret Siller of Selendy & Gay PLLC and Mark Richard of Phillips, Richard & Rind, P.A.