Navient (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
If you don’t qualify for student loan forgiveness from Navient, try these options instead.
Here’s what you need to know.
Student Loans
If you’ve followed the latest headlines on student loans, then you may know that Navient — one of the nation’s largest student loan servicers — agreed to a major settlement regarding student loans. As a student loan borrower with Navient, you could get over $1.7 billion of student loan cancellation. That’s the good news. (Here’s how to qualify for $1.7 billion of student loan forgiveness).
The bad news, however, is there is a good chance that you may not qualify. For example, approximately 66,000 of student loan borrowers out of 45 million borrowers are eligible for the $1.7 billion of student loan forgiveness. Another 350,000 of student loan borrowers may be eligible for an additional $95 million of student loan relief. This means that millions of student loan borrowers won’t be eligible for student loan forgiveness. (Here’s who won’t get student loan forgiveness).
However, there’s a silver lining. If you don’t qualify for this student loan cancellation, there are several other viable options, and here are the actions you should consider.
1. The student loan payment pause can help you save every month
If you have federal student loans, the good news is that your student loans are still paused through May 1, 2022. This means no mandatory federal student loan payments, no accrual of interest, and no collection of student loans in default. Since March 2020, when Congress passed the CARES Act, student loan borrowers have had access to this historic student loan relief. (Biden should end student loan relief). The U.S. Department of Education estimates that borrowers have saved $5 billion a month in student loan interest. Progressives in Congress want President Joe Biden to extend student loan relief beyond May. (Will student loan payments be postponed until 2023?). However, to date, the White House and Education Department have signaled that student loan repayments will restart as planned in May. (Student loans will restart soon. Here’s how to prepare for repayment).
Shock Poll: Student loans will be completely cancelled before student loan payments restart in May
2. Consolidate student loans
If you’re overwhelmed by the idea of returning to monthly student loan payments, you’re not alone. Student loan repayment is a lot to manage, particularly if you have multiple student loans with different student loans interest rates, student loan balances and student loan servicers. (Biden stops challenging student loan forgiveness after public outcry). Student loan consolidation is one strategy to organize and streamline your federal student loans. You can consolidate your current federal student loans into a single Direct Consolidation Loan. This new federal student loan will have one student loan balance, student loan interest rate, student loan servicer and monthly payment. This can simplify your life each month. The downside is that you won’t get a lower interest rate. Rather, your interest rate will be equal to a weighted average of your current interest rates, rounded up to the nearest 1/8%.
3. Get student loan forgiveness this way
There are several options to get student loan forgiveness, including income-driven repayment plans such as IBR, PAYE, REPAYE and ICR. Check with your student loan servicer for details. (If Biden cancels student loans, this will happen next). Alternatively, there are options for student loan forgiveness such as public service loan forgiveness. Through this program, you work for a qualified public service or non-profit employer, make 120 monthly student loan payments, and meet other requirements. The good news is that you can full federal student loan cancellation. The downside is that it can take 10 years. If you have prior student loan payments that are ineligible for public service loan forgiveness, you can complete a limited waiver to count your prior student loan payments. (Student loans are paused, but here are 6 things to do right now).
4. Refinance student loans to get historically low rates
Student loan refinancing is the best way to get a lower interest rate on your student loans. Student loan refinancing rates are at historic lows now and start as low as 1.74% for variable interest rates and 1.99% for fixed interest rates.
This student loan refinancing calculator shows you how much you can save when you refinance student loans.
For example, let’s say you have $100,000 of student loans, an 8% interest rate and 10-year repayment term. By refinancing your student loans to a 3% interest rate and 10-year repayment term, for example, you would save $248 each month and $29,720 overall. You can choose a fixed or variable interest rates as well as a repayment term between 5 and 20 years. There’s no application fees, origination fees or prepayment penalties if you pay off your student loans early. Plus, you can refinance again in your find a lower interest rate in the future. To qualify, you’ll need at least a 650 credit score, current employment or a signed job offer, steady income and a low debt-to-income ratio.
With student loan refinancing, you can refinance private or federal student loans, or both. Refinancing private loans is a smart move if you can qualify for a lower interest rate. Refinancing federal loans depends on whether you think you’ll need access to federal benefits such as income-driven repayment payment or public service loan forgiveness. If yes, then don’t refinance federal student loans. If no, then you may decide to refinance federal student loans to get a lower interest rate and save money.
