HARRISBURG–Attorney General Josh Shapiro announced today that Navient, known as one of the nation’s largest student loan servicers, will provide relief totaling $1.85 billion to resolve allegations of widespread unfair, deceptive, and abusive student loan servicing practices and abuses in originating predatory student loans.
In October 2017, Attorney General Shapiro sued Navient for engaging in unfair and deceptive lending and failing to offer proper repayment plans to students. Pennsylvania has the second highest average for student loan debt in the nation at $36,854 per debt holder.
Under the terms of the settlement, Navient will cancel the remaining balance on nearly $1.7 billion in subprime private student loan balances owed by nearly 66,000 borrowers nationwide. In addition, a total of $95 million in restitution payments of about $260 each will be distributed to approximately 350,000 federal loan borrowers who were placed in certain types of long-term forbearances. Borrowers who will receive restitution or debt cancellation span all generations: Navient’s harmful conduct impacted everyone from students who enrolled in colleges and universities immediately after high school to mid-career students who dropped out after enrolling in a for-profit school in the early to mid-2000s.