Navient To Forgive $41 Million In Massachusetts Student Loans

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Massachusetts (Reuters) – Navent, previously known as one of the leading providers of student loans across the country, has settled allegations of unfair lending practices for $1.85 billion, Attorney General Maura Healey said Thursday.

The settlement includes canceling $1.7 billion in debt and repaying $95 million.

In Massachusetts alone, Navint agreed to forego $41 million in private loans to 1,523 borrowers, giving residents more than $6 million from the settlement, including $2.2 million in compensation to more than 8,300 federal borrowers, Healey said.

Healey accused Navient of deception during the Zoom meeting, saying that much of that debt could have been avoided had Navient used the right tools to steer borrowers toward income-driven repayment plans that would have drastically reduced their monthly payments, rather than her practice of guiding them toward patience.

“Student borrowers in Massachusetts were more likely to be in debt than Navent at a time when they needed help most,” Healy said during the Zoom meeting.

Formerly known as Sallie Mae, Navient has been accused of allegedly creating loans that were fraudulent and unfair, resulting in a “lifetime crush of student loan debt” and putting “borrowers on the hook” for their bottom line.

“Students should not pay for Navent’s mistakes,” Healy tweeted Thursday morning.

As a result, Navient will forgo $1.7 billion in debt and pay $142.5 million to compensate 350,000 borrowers nationwide.

Healy said Navient will also have to change the way they do business going forward, providing better guidance for borrowers.

“We allege that Navient lied to the students,” Erwin Thoman, deputy director of the Department of Insurance and Financial Services at the Massachusetts Attorney’s Office, said on a Zoom call.

“This is basically about injustice,” Healy added, noting that student loan debt has exceeded $1.8 trillion in the United States.

Healy said that eligible borrowers don’t need to do anything to claim their part of the settlement because the payments will be mailed, but he urged borrowers to update their contact information here.

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