National Student Loan Corporation Navient has agreed to waive $41 million in private loans to student borrowers in Massachusetts as part of a $1.85 billion settlement linked to allegations that it misled borrowers into introducing costly repayment plans to add to their balances, Attorney General Maura Healey announced Thursday. .
The settlement would see Massachusetts receive $6 million, including $2.2 million in compensation for more than 8,300 Massachusetts federal borrowers.
Healy called a press conference at 12:30 p.m. on Zoom to discuss the settlement, but he shared some details online before the briefing.
“Students shouldn’t pay for Navent’s mistakes,” Healy wrote in a tweet.
Navient is a Delaware-based national student loan services and collection company, managing $300 billion in student loans to more than 12 million borrowers. The company was founded in 2014 when Sally May split into two entities – Sally May Bank and Navient.
Healy said Navint directed student loan borrowers into carry agreements that added to their debt rather than advising them about income-driven repayment plans that would lower their monthly payments. The settlement will see $41 million in private loans for 1,523 borrowers in Massachusetts forgiven.
“This settlement brings us one step closer to addressing our broken student debt system,” Healy said.
As attorney general, Haley has been vocal in her support of student loan forgiveness, joining state leaders such as U.S. Senator Elizabeth Warren and U.S. Representative Ayanna Pressley last year in calling on President Joe Biden to forgive up to $50,000 in student loan debt against federal borrowers. Last April, she called the system “fundamentally broken,” and said her office used the legal system to prosecute fraudulent lenders and tried to help borrowers restructure payment plans, get their loans out of default and resolve billing disputes.
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