Loans

Maine included as Navient settles predatory student loan claims for $1.85 billion

Maine included as Navient settles predatory student loan claims for $1.85 billion
Written by Publishing Team

BOSTON — Navient, a major student loan collector, has agreed to write off $1.7 billion in debt owed by more than 66,000 borrowers across the United States and pay more than $140 million in other fines to settle allegations of abusive lending practices.

The settlement with 39 state attorneys general was announced Thursday.

Pennsylvania Attorney General Josh Shapiro, who helped lead the negotiations, said Navient “engaged in deceptive and abusive practices, targeting students who knew they would struggle to repay loans, and placing an unfair burden on people trying to improve their lives through education.” . in the current situation.

Among other things, he said, Navient misled borrowers who had difficulty making payments by entering into what is known as long-term forbearance, causing them to build more debt.

Forbearance is when lenders allow borrowers to pause or reduce payments for a limited time while they rebuild their finances. However, interest on the loan continues to accrue and can eventually lead to an increase in the amount paid over the life of the loan.

Navint has denied acting illegally, and has not admitted any wrongdoing under the settlement, which is subject to court approval.

“Navient has focused and remains focused on helping student loan borrowers understand and choose appropriate payment options to suit their needs,” Mark Helen, chief legal officer, said in a statement.

In addition to forfeiting tens of thousands of loans, Navient will pay out $142.5 million, most of which will go to about 350,000 borrowers who are housed long-term.

Also, Navient will be required to do more to inform borrowers of their options and explain their repayment plans.

Massachusetts Attorney General Maura Healey called the settlement “an important step toward addressing the crippled student loan repayment system.”

Among the beneficiaries is Ashley Harden, 38, of Seattle. Hardin defaulted on a private student debt of $108,000 in 2020 after struggling for more than a decade trying to pay off a loan she used to attend the Brooks Institute of Photography in California.

Her monthly payments were often more than her rent. Navint agreed for a time to lower her payments to about $650 a month, but when that period was up, she owed more than $1,000 again, and had to pay compound interest.

“It’s been a huge weight lift,” said Harden, who was unable to pursue a career in photography in Seattle and now runs a food truck with her husband. “I can breathe again and feel like I’m not drowning, as if I won’t get a call tomorrow that they are suing me for defaulting.”

Helena Munn, 34, was accepted into her “dream college” – Howard University – when she was 18. When financial aid and scholarships weren’t enough, she sought out private loans and found herself besieged by phone calls and letters from lenders after graduation. Moon, who lives in Washington, D.C., said the experience has also been stressful for her mother, who is one of the loan signatories.

“This is a step forward in racial equality when you think about the percentage of African Americans in debt in this country,” she said of the settlement.

Kelly Ferry, 34, of Franklin, Massachusetts, described her experience using loans to attend art school as a “living nightmare” that threatened to burden her with lifelong debt.

“What the settlement will mean to me is that I can finally get my credit back,” she said.

Borrowers whose loans have been canceled will receive a notification from Navient along with refunds for any payments made after mid-2021.

The settlement also includes Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, Oregon, Caroline, New York, New York, OR Tennessee, Vermont, Virginia, Washington, West Virginia and Wisconsin.

Associated Press writer Jane Johnson contributed from Seattle.


Use the form below to reset your password. When you send the email to your account, we will send an email with the reset code.

” former

next one ”

About the author

Publishing Team

Leave a Comment