Student loan company accused of loaning predatory cops to $1.85 billion deal
Published on January 14, 2022 at 5:59 am
Courthouse News Service
Navient Corp. pledged on Thursday to cancel $1.7 billion in private student loans for 66,000 borrowers across the country as part of a settlement with 38 state and District of Columbia attorneys general over lending practices and payment plans deemed abusive and predatory.
In one declaration
Praising the settlement, the US student loan giant, better known to its customers as Sallie Mae, said it broke no laws, including consumer protection laws.
“The company’s decision to resolve these issues, which were based on unsubstantiated claims, allows us to avoid the additional burden, expense, time and distraction that prevails in court,” said the General Counsel. by Navient, Mark Heleen. said in a press release. “Navient is and has always been focused on helping student borrowers understand and select the right payment options to meet their needs. In fact, we’ve increased enrollment in income-contingent repayment plans and reduced default rates, and each year hundreds of thousands of borrowers we support successfully repay their student loans.
the regulation, which separately requires Navient to pay out $95 million to 350,000 long-term borrowers, still requires court approval from the U.S. District Court for the Intermediate District of Pennsylvania.
Navient will also make a one-time payment of $145 million to states — part of which will reimburse them “for their costs with remaining funds” that states use to pay certain student borrowers at their discretion. According to the company, Navient believes that “these costs are significantly lower than the anticipated costs of ongoing litigation and investigations state by state.”
“Navient repeatedly and deliberately put profits ahead of its borrowers – it engaged in deceptive and abusive practices, targeted students it knew would have difficulty repaying their loans, and imposed a burden unfair to people trying to improve their lives through education,” the Pennsylvania attorney said. General Shapiro in a declaration
on the deal Thursday. “Today’s settlement corrects Navient’s past behavior, provides much-needed relief to borrowers in Pennsylvania, and puts safeguards in place to ensure this company never preys on student borrowers again.”
Sallie Mae announced the creation of Navient in 2014 as an offshoot under the SLM Corp umbrella, splitting the so that Sallie Mae focuses on private student loans and Navient focuses on federal and private student loans. The settlement resolves lawsuits that date back to 2009.
Shapiro and the other attorneys general pointed out Thursday that Wilmington-based Navient’s lending practices “have pushed struggling student borrowers into costly long-term forbearances instead of advising them on the benefits of longer repayment plans.” income-oriented affordable”.
Another bad behavior that states decried was Navient’s pressure on colleges and universities to feature it to students on a “preferred lender” list.
Navient says it will notify affected borrowers and co-borrowers as soon as the settlement is approved by the court. Shaprio’s office noted that more details will be made available. in line.
In addition to Pennsylvania, the states involved in the dispute are Washington, Illinois, Massachusetts and California, and was joined by attorneys general in Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Vermont, and Wisconsin.
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