MADISON, Wis. — One of the country's largest student loan servicers will provide relief totaling $1.85 billion, according to Wisconsin Attorney General Josh Kaul.
Navient will provide the relief to "resolve allegations of widespread unfair and deceptive student loan servicing practices and abuses in originating predatory student loans."
According to Kaul, this settlement was joined by a coalition of 39 attorney generals and resolves claims since 2009.
According to officials, under the terms of the settlement, Navient will cancel the remaining balance on nearly $1.7 billion in subprime private student loan balances owed by nearly 66,000 borrowers nationwide.
"As part of the settlement, Wisconsin will receive a total of $1,110,265 in restitution payments for more than 4,165 federal loan borrowers," a news release states. "Additionally, 953 borrowers will receive a total of $22,776,612 in private loan debt cancellation."
Officials also state that Navient will pay $142.5 million to the attorneys general, as well as a total of $95 million in restitution payments of about $260 each will be distributed to approximately 350,000 federal loan borrowers who were placed in certain types of long-term forbearances.
“A student loan servicer cannot be permitted to engage in deceptive and predatory practices that add to the burdens that families face because of student loan debt,” said Attorney General Kaul. “This resolution provides meaningful relief to many people who were impacted by Navient’s actions.”
As a result of today’s settlement, the DOJ said borrowers receiving private loan debt cancellation will receive a notice from Navient by July 2022, along with refunds of any payments made on the cancelled private loans after June 30, 2021.
Officials also sate that federal loan borrowers who are eligible for a restitution payment of approximately $260 will receive a postcard in the mail from the settlement administrator later this spring.
According to the DOJ, federal loan borrowers who qualify for relief under this settlement do not need to take any action except update or create their studentaid.gov account to ensure that the U.S. Department of Education has their current address.
For more information on this settlement, click here.