On Jan. 13, one of the nation’s largest student loan providers, Navient, reached a $1.85 billion settlement with 39 state attorney general offices. The settlement resolves allegations that Navient engaged in unfair practices through predatory loan strategies against borrowers.
Over 400,000 borrowers will receive some debt relief, with 66,000 students having their debt completely canceled. These 66,000 loans in question were largely made between 2002 and 2010 totaling over $1.7 billion owed from Navient.
Georgia, along with 38 other states, is included in the settlement. State attorney general Chris Carr said in a statement, “Since 2009, Navient steered struggling student loan borrowers into costly long-term forbearances instead of counseling them about the benefits of more affordable income-driven repayment plans.” said Carr. “By reaching this settlement, Georgia borrowers will receive much-needed relief totaling more than $118 million as they work to regain their financial footing.”
Forbearance is an option for borrowers where they are given a period of time where they don’t have to make payments for their loan, but interest still accumulates. Stated within the settlement, this was the primary option Navient offered to borrowers instead of other more affordable repayment plans.
It is unlikely that University of North Georgia students will receive a complete cancellation of debt, however refunds of any payments made on canceled private loans after June 30, 2021 will receive a notice from Navient by July 2022. Federal loan borrowers who are eligible for a restitution payment of $260 will receive a notice from the settlement administrator later this spring.
Navient released a statement denying violating any law, including but not limited to consumer-protection laws or causing borrower harm. Navient claims, “The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court.”
For more information, borrowers can visit www.NavientAGSettlement.com or contact the Georgia State Attorney’s office.
