COLUMBUS, Ohio (WDTN) – Some Ohio borrowers may find their student loans canceled as the result of a settlement with Navient.
According to a release by Attorney General Dave Yost, Navient, one of the nation’s largest student loan servicers had engaged in predatory loan practices. The practices included lending to students attending for-profit schools and colleges with low graduations rates, knowing they would likely be unable to repay the loans as well as neglecting to help borrowers choose the best repayment options, pushing them into further debt with higher interest.
“This settlement puts money back into the pockets of borrowers struggling to pay for college,” Yost said. “It’s also an important reminder for corporations that there are consequences for prioritizing profits over the public’s best interest.”
Navient has agreed to a $1.8 billion settlement to resolve these allegations. As part of the agreement, Navient will be forced to cancel the remaining balance on over $1.7 billion in subprime student loan balances. This affects 66,000 borrowers since 2002, Yost said.
Navient will also pay $142.5 million to the attorney’s general and $95 million in restitution payments of approximately $250 each to loan borrowers who were placed in certain types of long-term forbearances.
Borrowers impacted by this settlement only need to make sure their address is updated in their studentaid.gov account to ensure the U.S. Department of Education can contact them.
Borrowers receiving private loan debt cancellation will receive a notice from Navient by July, along with refunds of any payments made after June 30, 2021, on the canceled private loans, the release said. Federal loan borrowers who are eligible for the estimated restitution payment of $260 will receive a postcard in the mail from the settlement administrator later in the spring.
For more information on the Navient settlement, click here.