Navient, one of the largest student loan servicers in the United States, has agreed to cancel $1.7 billion in student loans as part of a settlement with state attorneys general. The settlement, which was announced on Wednesday, is the result of a four-year investigation into Navient’s allegedly deceptive practices in servicing student loans.
The investigation found that Navient engaged in a number of unfair and deceptive practices in its servicing of student loans. These practices included steering borrowers into costly forbearance plans, failing to properly process borrowers’ payments, and misrepresenting the terms of loan repayment options. As a result, many borrowers found themselves facing mounting debt and struggling to make payments on their loans.
Under the terms of the settlement, Navient has agreed to cancel $1.7 billion in student loans for more than 66,000 borrowers who were harmed by the company’s deceptive practices. The cancelled loans will provide much-needed relief to borrowers who have been struggling to repay their student loan debt.
In addition to the loan cancellations, Navient has also agreed to make significant changes to its servicing practices. The company will be required to provide clearer and more transparent information to borrowers about their repayment options, as well as improve its processes for handling borrower payments. Navient has also agreed to pay $12.3 million in restitution to the states that were involved in the investigation.
In a statement, Navient CEO John Remondi expressed regret for the company’s past practices and emphasized its commitment to improving its servicing operations. “We are pleased to have reached a resolution with the attorneys general that allows us to focus on our core mission of helping student loan borrowers achieve financial success,” Remondi said.
The settlement with Navient is just the latest in a series of actions taken by state attorneys general to address the student loan debt crisis in the United States. With total student loan debt in the U.S. now exceeding $1.7 trillion, many borrowers are struggling to make ends meet and are in need of relief.
The cancellation of $1.7 billion in student loans by Navient is a significant step towards addressing this crisis and providing much-needed relief to borrowers who have been harmed by deceptive practices. It is a reminder that companies that engage in unfair and deceptive practices will be held accountable for their actions, and that borrowers have rights that must be protected.