Summary: Negotiating a settlement with Navient can be intimidating. Let SoloSuit walk you through the negotiation steps so you can reach the ideal settlement for you.
It's possible to negotiate a settlement with Navient over your student loan. Even though there's no guarantee that Navient will accept your settlement offer, it's always worth giving it a try. This article discusses all you need to know about making a settlement offer to Navient.
Navient can only settle private student loans, not federal loans. For this reason, it's important first to establish whether your loan is federal or private before discussing settlement.
What kinds of settlements does Navient offer?
Navient may accept settlement for charged-off loans, including those in default or extremely delinquent. However, they won't settle loans in deferment, repayment, or forbearance. The same also applies to loans that have an interest-rate only repayment plan.
How to negotiate a settlement with Navient
Here are some tips to help you negotiate a settlement offer with Navient.
Review the loan
Check the number of loans under your name and the balance for each. You'll need this information to estimate the potential settlement amount.
Once you've established the status of your loan, i.e., confirming that it meets the criteria discussed above, you may contact the Navient customer service number (888-272-5543) to initiate the settlement negotiation process. First, inform them about your intention to settle the loan in question.
Check your financial status
You'll need money to make a settlement offer. For this reason, it's always a great idea to evaluate your financial status. Check how much you have in your bank checking and savings accounts, 401k accounts, and so on. You can also discuss finances with your partner, friends, or family to see if they can lend a helping hand.
When evaluating your finances, figure out how much you'll have within 30 days of receiving the settlement offer. Also, determine the amount you'll be willing to pay every month as settlement.
Pro Tip: You'll get a better settlement offer when you pay a lump sum rather than settle for a monthly payment plan.
Talk to your cosigner
Your credit score will drop if you default on your student loan, and so will your cosigner's. It's therefore essential to ensure that you and your cosigner are on the same page regarding defaulting on a student loan.
You may consider other options, such as student loan refinancing. Talk to your cosigner and find out what's best for the two of you.
The other option is to release the cosigner from your debt account before you default. However, the biggest challenge with this alternative is that it takes too long for the cosigner to be released from the account, usually between one and two years.
A student loan cosigner can't sue you when you take them off the loan account. However, they can sue you to recover the money paid towards the loan.
Default your loan
You won't be able to negotiate a student loan settlement with Navient before defaulting on your loan. Lenders won't negotiate a settlement with a consumer whose debt account is in good standing for that particular private loan. On the other hand, defaulting on your student loan means damaging your credit score and marking up your credit history.
Settle your debt outside of court
If you're behind on paying off your student loan with Navient, and they sue you, SoloSettle can help you resolve the lawsuit quickly.
SoloSettle is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers to Navient until you reach an agreement with the collector, allowing you to settle the debt outside of court. While you may want to win the lawsuit and pay nothing, agreeing to close the case by paying less than the face value of the debt could be more realistic.
The settlement agreement process explained
After defaulting on the student loan, Navient will send your loan account to a collection agency. The collection agency will buy the account and try to reach out to you about paying what you supposedly owe.
The collection agency could be an in-house unit at Navient or an independent debt collector. Regardless, you should expect to receive a call about the defaulted loan.
The most important thing at this point is that you let Navient make the first offer.
In most cases, the settlement offer could either be a lump sum or a payment plan lasting up to 36 months. If the settlement offer sounds right, you may accept it. But if you have any issues or concerns about it, make sure to have them addressed before signing any settlement agreement.
You can also come up with a counteroffer if the initial offer doesn't seem right to you. The worst they can do is decline the offer. Throughout the negotiation process, avoid making any payments to the loan.
If the settlement offer is approved, you'll receive a settlement agreement letter. The letter confirms the settlement agreement terms between you and Navient. Carefully read through and confirm that everything is accurate.
The settlement agreement letter should contain:
- Your name and contact information
- Your account number
- Loan number and balance
- Details of the settlement agreement.
You'll then proceed to process the payment via the proposed payment method.
This video breaks down how to settle a debt lawsuit in 3 easy steps:
What next after settling a student loan with Navient?
When you settle a student loan with Navient, you'll receive a debt clearance letter approximately six weeks after your final payment. The letter states that you no longer owe that loan.
The Internal Revenue Service (IRS) will also send you a 1099-C, also known as a Cancellation of Debt notice at the end of the year. The 1099-C states the unpaid portion of your student loan, which is considered taxable income. So when you file your taxes, you'll be required to include this portion as part of your income.
However, you can talk to the IRS to discuss your options if you wish to exclude the unpaid portion of the student loan from your tax return.
Check out this video to learn more about how settling with Navient will affect your taxes:
When you negotiate a settlement offer with Navient, or any other creditor for that matter, you need to request a copy of all agreements. Such copies come in handy when you need to prove certain aspects regarding the loan in the future. For example, if you mistakenly get sued for the same loan you settled, you'll have receipts to prove that you don't owe the debt collector anything.
The bottom line
There's no guarantee that Navient will accept your settlement offer, but it's always worth giving it a try. However, given that you need to default your loan to stand a chance to negotiate settlement, it's always advisable to talk to your cosigner about your options. You can also contact a debt management expert for further advice.
Lastly, if you've already defaulted on your loan and debt collection agencies have failed in their attempt to recover the amount owed, Navient might file a student loan lawsuit against you. Negotiating a debt settlement plan is the best way to resolve a debt lawsuit. You'll be served with a debt collection Summons, which you must answer to prevent the court from passing a default judgment against you. SoloSuit can help you respond to a debt lawsuit in minutes, for free!
What is SoloSuit?
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)
