Navient was formerly known as Sally Mae.
Navient, one of the nation’s largest student loan companies, on Thursday agreed to pay nearly $2 billion to settle claims from 38 states and the District of Columbia that have defrauded thousands of students. loans into expensive, long-term plans that cost students more than they should.
“They ran a multi-billion dollar scam,” Pennsylvania Attorney General Josh Shapiro said at a news conference announcing the settlement.
The attorney general said Navient, formerly known as Sally Mae, burdened struggling students with debt by pushing them into subprime private loans, which they knew most would not be able to can pay.
“So many people are trapped in student loan debt,“Massachusetts Attorney General Maura Healey said.” These loans had to fail from the start, and Navient knows it. “
Navient also directs students into prohibitions instead of advising them on a more affordable repayment plan.
“What Navient did was deceive them,” said Washington Attorney General Bob Ferguson. “All they got was a bad plan, this patient plan.”
When the students stopped paying, as Ring allowed, the debt piled up. The agreement cancels nearly $1.7 billion of the outstanding balances of 66,000 borrowers nationwide.
Borrowers receiving private loans will receive a notification from Navient, along with the repayment of any payments made on private loans that were canceled after June 30, 2021. Federal loan borrowers who qualify for about $260 in repayment will receive a postcard in the mail from the settlement administrator later this spring.
The settlement includes the states of Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska , Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin and the District of Columbia.
“Today’s multi-billion dollar deal will bring relief to thousands of borrowers in New York and across the nation and help them regain their strength. college degrees,” said New York Attorney General Letitia James. know in a statement on Thursday.
“Americans across the nation are struggling with their student loan debt,” said Illinois Attorney General Kwame Raoul, adding that Navient has “buried students in debt.” with private loans they could never repay. “Today’s settlement provides substantial student loans.”
https://abcnews.go.com/US/student-loan-provider-navient-agrees-2b-settlement/story?id=82246180 Student loan provider Navient agrees to close to $2 billion settlement