Thousands of people with student loan debt will have their debt canceled or receive a one-time check as part of a multistate settlement with one of the nation's largest student loan servicers.

Navient, a Delaware-based company, was accused of encouraging borrowers to pause payments through forbearance rather than directing them to lower-cost repayment plans tied to their income. Although Navient denies the charges, the settlement ends probes by multiple states into the company's practices and will affect thousands of people whose loans are serviced by Navient.

The loans in question were mostly originated by Sallie Mae between 2002 and 2014 before Sallie Mae spun off its student loan services as Navient in 2014. The agreement will result in the cancellation of $1.7 billion in student loans. Another $95 million will be distributed in restitution payments worth about $260.

An aerial view of some of the businesses at the Wilmington Riverfront which includes AAA MidAtlantic and Navient.

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How do I find out if I will benefit?

Those who will have private loan debt canceled will be notified by Navient no later than July. They will receive a refund for payments made after June 30, 2021.

Borrowers who are eligible for the $260 restitution payment will receive a postcard from a settlement administrator this spring.

Borrowers who qualify for either debt forgiveness or a payment do not need to take any action other than making sure their account is up to date with their current address, according to officials.

The website says it will post updates on the timing for the notice postcards.

Who is eligible for the $260 restitution payment?

Generally, borrowers need to have lived in a state participating in the settlement as of January 2017 and spent at least two years in forbearance to qualify for restitution.

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At least one federal loan needs to have been eligible for income-driven repayment and the borrower can not have enrolled in income-driven repayment prior to entering forbearance.

Delaware-based Navient is the nation’s largest servicer of student debt. In this February photo, Navient CEO Jack Remondi speaks at a ribbon cutting for the new headquarters on Justison Street.

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Who is eligible for debt cancellation?

According to officials from the participating states, debt relief will primarily go to borrowers who had subprime student loans through Sallie Mae between 2002 and 2014 (before the company spun off Navient) and had more than seven consecutive months of delinquent payments prior to June 30, 2021.

Borrowers who had non-subprime loans to attend certain for-profit schools will also have debt canceled. A list of these schools can be found at

How do I find out if my debt is serviced by Navient?

Log into your account, enter your account dashboard and click on "My Loan Servicers." The most recent communication will show the entity that sends bills for your private loan payments.

You can also call the Federal Student Aid Information Center at (800) 433-3243.

When do I have to resume making payments on my federal student loans?

The student loan payment pause instituted due to the COVID-19 pandemic is scheduled to end May 1.

Contact Brandon Holveck at Follow him on Twitter @holveck_brandon.

This article originally appeared on Delaware News Journal: Navient settlement: Who qualifies for student loan debt cancellation

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