Navient, one of the largest private student loan providers in the United States, has reached a $ 1.85 billion settlement with dozen of states.
The comparison hits one of the best-known student loan providers in the United States, accused by the authorities of predatory behavior as they gained control over a precariously accelerating spike in student debt.
Under the agreement with 39 states, $ 1.7 billion in private student loan debt will be canceled by nearly 66,000 customers, and Navient will repay $ 95 million to students across the country.
“For too long, Navient has contributed to the national student debt crisis by deceptively putting thousands of students into additional debt,” New York attorney general Letitia James said in a statement. “Navient will no longer be able to fill pockets at the expense of graduate students.”
The state investigation found that since 2009, Navient has been pushing students struggling to repay their loans into expensive, long-term deferrals rather than advising them on other repayment plans, which the New York attorney general’s office said increased customers’ debts.
Authorities said the company had also given “robbery, subprime personal loans” to students attending for-profit schools and substandard facilities, knowing that many of those borrowers could not repay their loans.
“The company’s decision to resolve these unfounded claims enables us to avoid the additional burdens, costs, time and distraction enforced in court,” said Mark Heleen, Navient’s chief legal officer. The lender has helped borrowers “choose the right payment options for their needs,” he said. Navient has denied any wrongdoing.
Read more about the Navient settlement here.