NASHVILLE, Tenn. (WTVF) — They’re considered one of the country’s largest student loan servicers, but now Navient has reached a settlement to pay $1.85 billion in debt relief.
About 66,000 people in the US are eligible to have their student loans paid off after attorney generals across the country alleged that Navient preyed on students who couldn’t make their payments.
At least 39 state states signed off on the lawsuit which claimed Navient used predatory practices to lure people into a loan forgiveness program. They say Navient told borrowers they could sign-up to clear the federal loan amount they had left, as long as they made payments based on their income
As the Wall Street Journal pointed out, the loans related to the settlement are private loans and are not guaranteed by the federal government.
Samantha Fisher is the communications director for Tennessee’s Attorney General’s office and says these promises were almost always too good to be true.
“Typically what happens is that the interest rates are really high and interest payments are accumulating and basically being added on to the loan,” Fisher said.
She says this made it nearly impossible for anyone to pay back what they owed. The settlement forces Navient to pay more than $47.6 million to clear the remaining debt of 2,090 eligible Tennesseans.
Most of these loans were made between 2002 and 2010. If you think you’re entitled to money from this settlement, just visit this site and make sure your contact information is up-to-date. If you don’t have an account, sign up anyway to make sure you’re contacted with details about eligibility. If you’re eligible, Navient will notify you by July 1. You may also get refunds for what you paid toward the now canceled debt.
About $2.8 million will go toward paying restitution for more than 10,800 others in the state, with each person likely to get $260 in the mail.
Not nearly as much as paying off your loans altogether, but Fisher says the point is someone will pay for what happened and it won’t be you.
“On some of these big problems that affect people nationwide, you’re seeing results. You’re seeing something done about it,” Fisher said.
Navient did not admit to breaking any laws in the settlement, but will now have to make these repayment plans far more clear for anyone who signs up for the optional plan.
“What this means is that state attorney’s whose role is to enforce consumer protection laws, they’re not going to tolerate people in their state becoming victims of deceptive marketing,” Fisher said.
The settlement also requires Navient to notify borrowers about the US Dept. of Education’s recently announced Public Service Loan Forgiveness Program. For a limited time, borrowers can receive credit for past periods of repayment that would otherwise not qualify for help.