Breaking: Navient, one of the nation’s largest student-loan processors, will cancel the debt of 66,000 borrowers, totaling $1.7 billion, in a deal with several states
, the company said. The loans in question are private loans, meaning they are not guaranteed by the federal government. As part of the settlement, the company will make a one-time payment of approximately $145 million to the states.
All of the loans forgiven in the agreement were in default, and most originated between 2002 and 2010 atNavient has faced numerous lawsuits in recent years that alleged the company engaged in unfair and deceptive conduct against borrowers. Last March, a Seattle-area judge ruled that the company had broken a consumer protection law in a case brought by Washington’s attorney general.
In addition to loan cancellation and some restitution for borrowers with private loans, Navient will pay $95 million to about 350,000 federal loan borrowers—or about $260 each—who were placed into certain types of forbearance programs that caused them to accumulate more debt rather than entering income-based repayment plans, the states said.
As part of the agreement, Navient continued to deny the claims or that the company has harmed any borrowers.
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