COLUMBUS, Ohio (WJW) — One of the nation’s largest student loan services has agreed to a $1.85 billion settlement over allegations that it engaged in predatory practices.
According to claims by Ohio Attorney General Dave Yost, along with 38 other attorneys general, Navient promised to help borrowers find affordable repayment options. They claim that instead the company financially restricted borrowers to long and expensive plans.
As part of the settlement, Ohio will receive $5.3 million in restitution payments. That money will then be shared with the more than 19,800 federal borrowers in the state who were affected by the alleged practices between 2009 and 2017.
The settlement requires Navient to cancel $1.7 billion in private student loans owed by 66,000 borrowers across the country since 2002.
More than 3,500 Ohio borrowers will get a combined $81.8 million in private loan debt forgiveness.
“This settlement puts money back in the pockets of borrowers who are struggling to pay for their education,” Yost said. “It’s also an important reminder for businesses that there are consequences to prioritizing profits over the public interest.”
Federal borrowers eligible for the estimated $260 restitution payment will receive a postcard in the mail this spring.
Borrowers whose private loans have been canceled will receive notice from Navient by July 2022, along with a refund of any payments made after June 30, 2021.
Navient must also do more to help borrowers understand their repayment options and plans, according to the settlement.
The settlement was submitted Thursday in the Franklin County Court of Common Pleas as a proposed consent judgment. It is subject to court approval.
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