The student loan servicing company will cancel debt owed by more than 66,000 people nationwide in a $1.85-billion settlement on predatory lending.
Navient, a major student loan servicing company, has settled allegations of deceptive lending practices for $1.85 billion, officials said Thursday in announcing a settlement that would cancel the debt of tens of thousands of borrowers.
“Navient repeatedly and deliberately put profits ahead of its borrowers — it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back, and placed an unfair burden on people trying to improve their lives through education,” Shapiro said in a statement.Under the terms of the settlement, Navient will cancel more than $1.7 billion in subprime private student loans owed by more than 66,000 borrowers nationwide, Shapiro said.
Forbearance refers to when a lender allows a borrower to pause or reduce payments for a limited time while they build back their finances. However, interest on the loan continues to accrue and could ultimately cause the amount to be repaid over the life of the loan to be higher.“Navient is and has been continually focused on helping student loan borrowers understand and select the right payment options to fit their needs.
Navient must also train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness and related programs.
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