Settling Student Loan Debt With Navient For Less Than You Owe

Your student loan debt has been hanging round for years. You wish to repay your loans. But you wish to do away with the curiosity. And you’d prefer to accept near or lower than your authentic principal steadiness.

A student loan settlement might make sense for you if:

  • your loans are in default
  • you have got cash to pay in direction of a settlement.

A lump sum is not all the time essential. But it is useful.

Can you negotiate a settlement with Navient?

You can negotiate a student loan settlement with Navient. But the method for negotiating a settlement will change relying on whether or not your loan is a federal student loan or a personal student loan.

Are your Navient student loans federal or personal?

The best solution to discover out in case your loans are federal or personal is to name Navient. The consultant ought to have the ability to let you know which of your loans are federal and that are personal.

Phone quantity for Navient: 800-722-1300

You can even log in to You can discover your checklist of loans underneath the Loan Details tab.

Finally, you possibly can log in to the Federal Student Aid web site,, to see all of the student loans you borrowed from the federal authorities. Compare that checklist towards your credit report. Any loan listed on is a federal loan. Any student loan that seems in your credit report however not on that web site is personal.

Click right here to learn How to Tell if Navient Loan is Private or Federal?

Will Navient settle federal student loans?

Navient will not settle federal student loans. As a student loan servicer, they do not have the authority. Only the Department of Education and warranty companies have the ability to settle federal student loans.

You can settle a federal student loan that Navient providers after you default on the loan. After you default, the Department of Education or warranty company sends the loan to a set company. Once the loan is there, the gathering company has the authority to just accept settlement presents for defaulted federal loans.

What is a warranty company?

A warranty company is a state or personal non-profit company that helps insures federal loans made underneath the Federal Family Education Loan Program. A warranty company pays the loan holder when a loan defaults. ECMC is a warranty company.

Will Navient settle personal student loans?

Navient will settle personal student loans. But it’s important to default first. You can’t settle a personal student loan that’s in good standing, deferment, forbearance, or delinquency.

You default on a personal student loan after you miss about 6 month-to-month funds.

>> Click right here to schedule a free 10-minute telephone name to speak with me about settling your Navient loans.

What if in case you have each federal and personal loans with Navient?

You can settle your Navient personal student loans and never your federal student loans or vice versa.

Consequences of settling student loan debt with Navient

The penalties of settling student loan debt with Navient depend upon whether or not you are looking for a federal student loan settlement or a personal student loan settlement.

Federal student loan penalties

The penalties of defaulting in your federal student loans are:

  • harm to credit rating
  • wage garnishment
  • tax refund offset
  • Social Security Benefits offset
  • lack of eligibility for student loan forgiveness applications (e.g., Public Service Loan Forgiveness Program)
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Private student loan penalties

The predominant consequence of settling student loan debt with Navient is harm to you and your cosigner’s credit rating. Because it’s important to default on a student loan earlier than Navient accepts a settlement, late funds can be reported to the credit bureaus. Those late funds could cause credit scores to plummet.

A secondary consequence of settling student loan debt is taxes. The IRS will deal with the distinction between your student loan steadiness and the settlement quantity as taxable revenue.

You’ll need to pay taxes on that quantity except you qualify for an exclusion.

One closing consequence is that Navient might resolve to file a lawsuit towards you for breach of contract. More on that beneath.

>> Click right here to schedule a free 10-minute telephone name to speak with me about settling your Navient loans.

How to settle student loan debt with Navient

  1. Review your loans
  2. Check your private funds
  3. Talk together with your cosigner
  4. Default in your loans
  5. Wait for Navient to make a settlement supply
  6. Check the written settlement supply
  7. Pay the settlement

1. Review your loans

Before you begin the settlement course of, test:

  • the variety of loans you have got
  • the loan steadiness for every loan
  • the reimbursement standing for every loan

This info will assist you to put together to estimate your potential settlement quantity and when settlement will turn into a risk.

2. Check your private funds

A settlement goes to take cash. Check your bank accounts, financial savings, 401k, and many others., to see how a lot you have got out there. You might also wish to speak together with your partner, mother and father, and many others., to see in the event that they’re keen that will help you with a settlement.

You wish to know two issues:

  • how a lot you may have out there in a lump sum inside 30 days of receiving a settlement supply
  • how a lot you possibly can afford to pay in direction of a settlement each month

Most student loan settlements I negotiate for shoppers are for a lump sum. You often get a greater settlement supply the more cash you possibly can pay at one time.

But generally, a lump sum is not an choice. So you wish to know what’s essentially the most you possibly can afford to pay in direction of a settlement every month.

Also, think about making use of for a private loan. You haven’t got to just accept the loan. Just get pre-approved.

3. Talk together with your cosigner

Defaulting in your student loans will harm your credit and your cosigner’s credit. So in the event you’re not already in default, speak together with your cosigner to debate your choices for coping with the loans (e.g., student loan refinancing).

You might look into getting them launched as a cosigner earlier than you default. But the cosigner launch course of can take 1 to 2 years.

Note: While you possibly can’t sue the first borrower for a cosigner launch, a cosigner can sue a major borrower to get better the cash they’ve paid in direction of the loan.

4. Default in your loans

There’s no manner round it. You need to default earlier than a settlement can be accepted. No personal student loan lender, together with Navient, is keen to take a settlement if the loan is in good standing.

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Defaulting in your student loans will go away damaging marks in your credit historical past. And these marks will trigger your credit rating.

But from what I’ve seen, it is simpler to lift your credit rating than it’s to do away with your student loan debt. So an inexpensive settlement could also be definitely worth the harm.

5. Let Navient make the primary supply

After you default, Navient will ship your loans to a set company. The assortment company could also be an inner unit at Navient. Or it might be an exterior unit exterior of Navient.

Either manner, when the debt collector calls, ask to your fee choices.

They’ll often supply a settlement for a lump sum or a brief fee plan (e.g., 24-36 months)

You can both settle for or counter the settlement.

You needn’t counter in writing. You can counter through the telephone name.

The debt collector will both settle for or reject the supply through the name. They might even say they’re going to get again to you as soon as they’ve a response.

Either manner, do not pay something till you get a written supply.

6. Check the written settlement supply


  • your title and get in touch with info
  • your account quantity
  • the loan quantity(s) and loan steadiness(s)
  • the settlement phrases (quantity, fee date, and many others.)

If something is wrong, let the consultant know the problem and request an up to date copy.

7. Pay the settlement

Navient means that you can pay them straight by organising an digital funds switch. You can even mail a test to the handle they supply. And, relying on the debt collector, you could even have the ability to pay utilizing a credit card.

No matter the way you pay, maintain a report of your fee.

Navient personal loan settlement supply

Here’s a student loan debt settlement supply from Navient:

And this is a proposal I negotiated with a set company for a Navient loan:

This supply is not for a lump sum. Instead, it is for a small preliminary lump sum fee, adopted by month-to-month funds over the following 4 years.

>> Click right here to schedule a free 10-minute telephone name to speak with me about settling your Navient loans.

How a lot does student loan settlement value?

A student loan settlement for a personal student loan will usually value 40-70% of the present steadiness. So in the event you owe $100 thousand, the settlement could also be for someplace between $40 thousand and $70 thousand.

You might have to pay that in a lump sum or a lump sum plus month-to-month funds.

Federal student loan settlement tips aren’t nearly as good as personal student loan tips are. A student loan settlement for a federal student loan will usually value round 85-90% of the loan steadiness, much less assortment charges. Plus, you may need to pay that settlement in full in not more than 90 days.

How a lot cash are you able to save with a student loan settlement?

There’s no set quantity it can save you with a student loan settlement. Each personal lender could have its personal settlement tips.

READ:   Which Student Loans Should You Pay Off First?

That stated, in my expertise, you possibly can anticipate to avoid wasting about 40-60% of your present loan steadiness.

What occurs if Navient refuses to settle?

As I shared above, Navient will refuse to settle in case your personal student loans are in good standing. So in the event you’re making your student loan funds on time, then Navient will not settle for your supply.

If you default and Navient nonetheless refuses to settle, then your loans can be despatched to a debt collector.

The debt collector will probably give you a settlement.

If you possibly can’t afford that settlement quantity, sooner or later, your loans can be despatched to a legislation agency.

At this level, you could be questioning, “Can Navient garnish wages?” The reply is sure, however provided that they sue you and get a judgment.

>> Click right here to schedule a free 10-minute telephone name to speak with me about settling your Navient loans.


Like most student loan lenders, Navient often will not sue you instantly after you default. Instead, they’re going to wait till the statute of limitations is near operating out.

Speak with an legal professional close to you to test the statute of limitations to your state.

Even if Navient sues you, you continue to ought to have the ability to negotiate a settlement.

Click right here to learn Will Navient Sue Me?

Alternatives to student loan settlement

If you possibly can’t afford a student loan debt settlement, you have got 4 options:

  1. Deferment or forbearance
  2. Income-driven reimbursement
  3. Refinancing
  4. Bankruptcy

1. Deferment or forbearance

Both deferment and forbearance mean you can pause your student loan funds quickly. Interest will proceed to develop throughout that point. But deferment and forbearance provide you with time to breathe so you possibly can determine your subsequent steps.

Navient, like many personal student loan holders, presents deferments and forbearances for a restricted time period. At some level, you may run out of each. From there, they’re going to often supply to mean you can make interest-only funds.

2. Income-driven reimbursement plans

Federal student loan debtors can put their loans into an income-driven reimbursement plan. Under these IDR Plans, your funds are primarily based in your revenue and household measurement.

Depending in your revenue, your month-to-month fee could possibly be as little as $0 with out harming your credit or incurring added penalties and charges.

Plus, you possibly can have your loan steadiness forgiven after spending 20 to 25 years on an income-driven reimbursement plan.

3. Refinancing

Refinancing might mean you can get a decrease rate of interest, an extended reimbursement time period, and extra versatile reimbursement choices.

You can try your refinancing choices with a neighborhood credit union or by looking out on-line.

Typically, you may want an excellent credit rating (680+) to get a decrease rate of interest.

4. Bankruptcy

If you possibly can’t refinance and might’t afford a settlement, submitting chapter could also be your only option.

By itself, neither a chapter 7 nor a chapter 13 chapter case will discharge your student loan debt.

You need to file an adversary continuing for student loans.

Click right here to learn Can You File Bankruptcy on Student Loans?

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