What is the lowest offer I can make to Navient for a settlement?
Posted by IncidentFlaky7923@reddit | studentloandefaulters | View on Reddit | 49 comments
Currently in default on $130000 of private loans. Navient sent me a letter in the mail for a settlement of 70% which I obviously did not respond to.
I see stories of 32% or below. What is realistic and what is not realistic?
I contacted an attorney's office about a year ago and they said something like 80% plus the attorney fees and that is why I won't work with an attorney.
I just want to know what I can reasonably expect as a settlement offer if I offer them a lump sum all at once with no payments spread out. What's the lowest they will take?
TheresaSweet@reddit
From what I’ve seen, the longer you’re in default, the lower the amount they’re willing to settle for.
Beware of the tax bomb.
IncidentFlaky7923@reddit (OP)
Hi Theresa!
I also have a borrower defense case opened and if they rule in my favor, I have to thank you! I think they will too.
As far as the tax bomb, I'm just going to declare insolvency.
TheresaSweet@reddit
I hope you get approved!
Upbeat_Sky_6813@reddit
Hi Theresa! I hope you see this. I'm the same person who had asked this question. I tried to reach you on the r/BorrowerDefense subreddit but apparently there is a post history requirement and I just made this account to share my update.
I wanted to let you know I got approved on July 24th! I was actually on a NYC boat cruise, right next to the Statue of Liberty, in 100 degree heat when I saw the email! It was the rest of the trip so much SWEETer!
I actually never knew about Borrower Defense until late 2021. I was really upset about the burden of those loans and I knew that school screwed me (and so many others) over. I must have Googled loan forgiveness programs or something like that and when I discovered and read about Borrower Defense, my eyes got wide because I knew I would get a shot to prove my case. I sent in a paper application just to be safe and I pulled up a ton of files from Wayback Machine which showed the school fudging up their pass rates. This was in early 2022. I'm not going to lie, it was a stressful waiting period but I would call the Borrower Defense hotline every few months and one person hinted that my file was "flagged" for approval and I just held onto that hope. As we got closer to July 28, I knew it would get approved and I got it on July 24!
The amount forgiven comes out to $110k. The school I went to was one of those Caribbean medical schools so that should tell you the corruption is far-reaching, even at the professional level.
I just wanted to say thank you for what you have done for all of us. My life has now changed because of this and I owe that to you. This whole experience has taught me to be kind to people and to do my part to pay it forward to the next person. Once my money situation straightens out (shortly) , I will donate $250 anonymously to your Gofundme. Buy as much coffee as you want but please buy a bottle of Fireball on me! or as I call it..."Christmas in a glass."
The lesson I learned is that this world is always trying to screw us over, but in spite of that, there are still so many good people in every area of this corruption who will fight for what is right. And that should make us all feel better, and push us to be a part of that change.
As for me, I'm still working toward my graduate degree, now at a reputable school, and this has given me the boost I desperately needed!
TheresaSweet@reddit
Omg yaaaaaay! Congratulations! (My fellow named plaintiff runs the BD sub along with someone else. I have my DMs turned off on Reddit because this place is wiiiild lol)
Upbeat_Sky_6813@reddit
To anybody else that happens to read this, I just got the settlement approval from Navient today for 16%! The loans actually went to Allied Interstate and I got the offer through them.
Honestly, they were actually quite helpful and I owe them gratitude as well. This was NOT AT ALL an easy experience but I connected with the right people on this forum and they shared their stories and I was convinced I could go much lower than everyone was saying. Everybody's situation will be different and I can't guarantee you will also get a 16% settlement, but you have to do the work and just try and be firm. I'm very busy right now but when I have more time, I am going to post my story so that I can help the next person.
I'm not going to lie, this was the hardest thing I had to go through and my life has sucked for at least a few years now because having those loans was like being shackled. It was the worst feeling, it took my smile away, I lost my motivation, and it brought this grown man to tears. I even lost my temper and cursed my dad out several times because I blamed him for putting me on this path and I have since been able to accept that our parents would have no way of knowing where the corruption is with higher education. All you can do is learn and help the next person not fall into the same trap. But now IT IS DONE and I get the chance to become my old self again!
My advice is to keep researching and keep fighting. Just know that EVERYTHING in life is negotiable...even if they tell you otherwise.
*And just a reminder to anyone that all student loans that are forgiven this year are TAX EXEMPT! Do what you need to do to get your approvals by 12/31/25 and you will avoid the tax bomb. You will also avoid it if you can prove insolvency. Just want to point that out because a lot of people still don't know that.
Finally, to anybody stressing, you'll get through this too. And you know what, it will make you a better person because you'll be able to handle anything life throws at you now! And NEVER let any of this affect your relationships with your loved ones because this mess will all be trivial sooner than later.
Keep fighting and Good luck to you all!
Chijesu@reddit
I got 60% settlement but it’s been 5 years. Next year is 6th years for the SOL. I was wondering if I take one class would that put my private loans back into deferment/forbearance?
Extreme_Late@reddit
I got 20% offer today
SnooMaps4961@reddit
Can I ask what amount of money you owed? How long this took?
I’d like to know your experience; I have 20% to give and that’s about it for my loan settlement right now I defaulted almost 2 years ago
Extreme_Late@reddit
Owe $67k starting from about 20 yrs ago. They have mostly been on in-school deferral since then. They offered $11k to settle, I countered with $5k and they agreed to 6.5k. However since then I realized that Navient and Nelnet are NOT the same and because Navient is no longer affecting my credit I will focus on Nelnet at this time.
GroundbreakingLake51@reddit
Jesus how are you a doctor?
Starshylea@reddit
Can you refinance them? It's a good option if you're looking to rebuild credit. I just refinanced my 91k private student loans. It's a 15-year term for 763.45, but since my pay is bi-weekly, I set 381.73 aside separately in an account the refinance company withdraws from.
I might switch over to the 5 year plan after I get my yearly raises twice.
IncidentFlaky7923@reddit (OP)
Refinance? lol. Those loans were designed to fail the end user. The strategy today is to get away from Navient ASAP. Refinancing only prolongs the relationship with them.
Starshylea@reddit
If you refinance with another company, you'd pay off Navient and would set up a new payment arrangement with the new company.
Those loans with Navient would be marked as paid also. For mine, I'm using Yrefy. They bought my defeaulted sallie mae loans from the lenders who purchased them. I give them 763.45 a month, and they continue to mark the new loan as paid!
IncidentFlaky7923@reddit (OP)
Why on earth would you pay the full balance when those loans are in default and your credit is ruined?
At that point, Navient gets LESS money not more or even equal.
It's like getting divorced, since when does the other person get 100%?
Starshylea@reddit
Take this into account: Say I decide on the route of bankruptcy (sure, it clears, but your credits basically tanked for 10 years, good luck getting anything really nice with ruined credit) settle (Even if you settle, its going to be listed poorly on your credit report, and good luck taking out loans, credit cards, high interest on cars and possible property)
Leaving in defeault opens to lawsuits and litigation. This is really a last resort, but lawyers may be more tempted to move quicker with higher loan amounts. Mine, for example, were 91,020.91.
Refinancing lets me build credit on a term I agree with. My loans are marked as paid, which will reflect well on my payment, and I can create a payment plan that works best for me.
IncidentFlaky7923@reddit (OP)
You're getting a few things mixed up here.
You sound like a mark for a refinance company.
Starshylea@reddit
To each their own. You DO need good or fair credit nowadays. True people with a house and car already might not as much, but you fail to account for people who don't already have homes and cars.
Also, when you settle, it's marked as CLOSED. Paid for less. It's still stuck on your credit report for upward to seven years. They just won't keep reporting it.
But I can afford it and have chosen this avenue. But good luck with yours!
IncidentFlaky7923@reddit (OP)
I still encourage you to research "Strategic Default" for PRIVATE student loans.
This is a very specific situation that requires very specific strategies considering companies like Navient are being sued for their practices.
CTIDmississippi@reddit
How did you go about this? Contact Yrefy?
Starshylea@reddit
https://yrefy.com/
They work with defeaulted private loans all the time. Because my credit score was poor, and I job hopped from working temp jobs straight out of college, they had me add a cosigner.
But I can get her removed after a few years of making payments!
champagne4all@reddit
I just settled with Navient for 35%
IncidentFlaky7923@reddit (OP)
Did they report it as "paid in full?"
That is the only way I would ever give them money for a settlement.
champagne4all@reddit
Via my settlement letter:
“…. We’ll then stop all further collection activities regarding the loans and report the status as “paid in full for less than the full balance” on your credit report.”
Not as great as “paid in full”, but thankfully I’m not too worried about it
SettleBankDebt@reddit
It will actually help your overall score by reducing by 130K in debt.
champagne4all@reddit
Definitely. I’m not sure where things will land once my settlement is paid off, but my credit score shot up about 40 points when Navient charged-off my account.
SettleBankDebt@reddit
I have worked with clients that had hundreds of thousands of dollars of debt. After we settled within a year some had scores up to 700 or more, however they also had stable tradelines such as a mortgage and car payment that positively impacted the credit report.
IncidentFlaky7923@reddit (OP)
When you settle the loan like that, does it remove the charge off? Or is that still on file for 7 years?
SilverBolt52@reddit
It's on your credit for 7 years. But it's not the end of the world dude. I've had one debt worth 19k that I defaulted on and ran out the SOL on while also having a charge off of 2.5k. Even with both of those things I was able to buy a house and a car. Car was high interest but house is normal since it's FHA.
IncidentFlaky7923@reddit (OP)
My understanding is that with a settlement, the charge off is removed and it is listed as "paid, settled for lesser amount."
champagne4all@reddit
Truthfully, I’m not sure. I’m planning for it to be listed for 7 years & I’ll be pleasantly surprised if it drops off sooner.
TheToken_1@reddit
That’s less than what’s owed. So you’re responsible for the taxes on the amount not paid.
champagne4all@reddit
Correct. Thankfully, I’ll be able to claim insolvency.
DatMX5@reddit
Can you elaborate on this please? I'm curious.
IncidentFlaky7923@reddit (OP)
When you make a settlement, they could report it as "settled for less than agreed upon amount" or "paid in full"
The latter is a better option.
heyjos@reddit
wow! 35% after a month? did you owe 6 figures?
champagne4all@reddit
Yes! I owed a little over $110k at the time of default
heyjos@reddit
I don't have direct experience, currently trying to strategic default to get a settlement. I'm hopeful for somewhere around 35%.
I have seen many people in this thread over the years saying they got offers of 35%-40% after months and months (8+ months) of offers starting significantly higher (75-80%, then dropping to 50% something, then 40%'s)
Stanley T claims in 2021 he was able to settling 135k for 38k with a part lump sum and monthly payments. I've seen a lot of blogs/posts like this where over 100k can settle for 30-35% after waiting them out.
How long ago was the letter? assuming it was the first?
How many months in default are you?
IncidentFlaky7923@reddit (OP)
I don't like Stanley T. I'm not getting good vibes from him.
The first letter was two months ago. I was in default a month before that.
TheToken_1@reddit
He seems like one of those attorneys that have enough clients and makes plenty of money already so he really doesn’t care about your money. But not necessarily in a bad way, but more so that he’s not hurting and there will be plenty of other clients other than you.
And so he’s brash and straight to the point but comes off as an a$$hole. But I’d likely very good at his job and is likely very knowledgeable.
IncidentFlaky7923@reddit (OP)
No, I don't think it's that.
heyjos@reddit
I don't love him, he posts/shares letters that seem real tho, def would not hire him...how long can you hold out? I'm going to guess the next letter will be lower
IncidentFlaky7923@reddit (OP)
I'm not waiting to run out the SOL. The sooner the better to settle but I just want to know how low they will go.
TheToken_1@reddit
They technically can go to $0 if they wanted, but of course they won’t. I’d say a more realistic number in general would be roughly 30%
But at the same time, I’d imagine if you’ve actually paid on the loan for years and possibly paid close to the full original loan amount then they may settle for alot less. Maybe like 10% or so.
SettleBankDebt@reddit
I have settled numerous student loan debts. If they are offering 70% that means they can go much lower. Do not put anything in writing and do not tell them how much you have.
RevolutionaryEbb2522@reddit
When you do settle do they offer a monthly plan and offer to remove the default ?
IncidentFlaky7923@reddit (OP)
I literally just asked the other user the same question at the same time as you!
They offer payment plans for four years with a down payment but I think a large lump sum will get the best offer up front.
tweakingforjesus@reddit
I'm guessing with the new SAVE plan and other IBR options, they will put you on one of those first. It might actually work out better for you since interest does not accrue and forgiveness can be earned over time. Depending on your history you may also earn credit for past payments.
IncidentFlaky7923@reddit (OP)
These are private loans. No IBR available.