Navient, one of the largest private student loan providers in the United States, has reached a $1.85 billion settlement with dozens of states.
The settlement concerns one of the US’s most prominent student-loan providers, which authorities have accused of predatory behavior amid scrutiny of a precariously accelerating accumulation of student debt.
Under the 39-state agreement, $1.7 billion will be forgiven on nearly 66,000 customers’ personal student loan debt and Navient will repay $95 million to students across the country.
“Navient has contributed to the national student debt crisis for far too long by deceptively luring thousands of students into even more debt,” said Letitia James, New York Attorney General, in a statement. “Navient will no longer be able to line its pockets at the expense of students trying to earn a college degree.”
The states’ investigation found that starting in 2009, Navient pushed students who were struggling to pay off their loans into expensive, long-term forbearance rather than advising them on other repayment programs that were increasing customers’ debt mountains, according to the New York Attorney General’s office.
Authorities said the company provided “displaced, private subprime loans” to students attending lower-quality for-profit schools and institutions, knowing that many of those borrowers would not be able to repay their loans.
“The Company’s decision to resolve these matters, which were based on unsubstantiated claims, allows us to avoid the added burden, cost, time and distraction of standing up in court,” said Mark Heleen, Chief Legal Officer by Navient. The loan provider has helped borrowers “select the right payment options for their needs,” he said. Navient has denied any wrongdoing.
Read more about the settlement of Navent here
