Press Release

US Court of Appeals Upholds Settlement in Navient Class Action

Judges Reject Ideological Challenge to Settlement from Far-Right Legal Funders

For Release:


Andrew Crook
o: 202-393-8637 | c: 607-280-6603

NEW YORK—The U.S. Court of Appeals for the 2nd Circuit has unanimously rejected a challenge by far-right interests to an agreement, approved in 2020 by a federal district court, to settle a class action brought by 10 AFT members against student loan servicer Navient.

The plaintiffs brought the federal suit in October 2018, challenging Navient’s practices regarding federal student loan borrowers and the Public Service Loan Forgiveness program, a federal government relief program that forgives the remaining balance on certain public service workers’ federal student loans after 10 years of making qualifying payments.

Navient agreed to a significant, multipronged settlement that included enhancements to the firm’s internal processes, and the establishment of a nonprofit entity to help borrowers access forgiveness.

But lawyers from the extremist Hamilton Lincoln Law Institute, a fringe group opposed to workers and class actions, were determined to overturn the agreed terms on appeal, and took on both Navient and the plaintiffs to deny them and thousands of other borrowers the benefits of the agreement.

Today, a three-judge panel unanimously dismissed their objections and concluded the district court’s ruling was appropriate, thereby affirming approval of the settlement. It also concurred with U.S. District Judge Denise Cote’s previous finding that “the motive behind AFT acting as it has and the commitment it has shown in this litigation … is nothing but admirable.”

AFT President Randi Weingarten hailed the decision: “We sued Navient years ago challenging Navient’s practices with respect to advising federal student loan borrowers, and Navient agreed to enhance those practices. But right-wing extremists wanted none of it; they thought they could direct their legal arsenal toward hurting the millions of teachers, nurses, first responders, school support staff, higher education faculty and social workers who have dedicated their lives to helping others. Their cruel gambit was rejected by the court: It turns out these borrowers were entitled to the relief under this class action settlement—relief that originated under a bipartisan law signed by President George W. Bush.

“Those encumbered by student debt are now on the path to accessing the reforms and resources carefully crafted by Navient and the plaintiffs. Together with the PSLF reforms announced by the Department of Education, these practices will assist public service workers on their journey to realize the promise and intent of the original program.”

Under the settlement, Navient agreed to train its agents to take additional steps to identify borrowers potentially eligible for relief and to provide them with relevant information. It also agreed to contribute a cy pres award of $2.25 million to establish a nonprofit organization that provides counseling to borrowers at all stages of the repayment process. In addition, the ruling sets an important precedent on the permissibility of class-action claims in the future and sends a message to those opposed to the idea of collective relief that their arguments may founder in court.

“We are proud that this historic settlement has been reaffirmed, further acknowledging its profound impact on public service employees,” said Selendy Gay Elsberg partner Lena Konanova. “Our nation's relief programs should support professionals that make caring for others the focal point of their careers. The decision today proves their work is valued.” 

The case is Hyland v. Navient Corp., 20-3765-cv, in the U.S. Court of Appeals for the 2nd Circuit. Plaintiffs are represented by Faith Gay, Caitlin Halligan and Lena Konanova of Selendy Gay Elsberg PLLC and Mark Richard of Phillips, Richard & Rind, P.A.

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The AFT represents 1.7 million pre-K through 12th-grade teachers; paraprofessionals and other school-related personnel; higher education faculty and professional staff; federal, state and local government employees; nurses and healthcare workers; and early childhood educators.