![]() ![]() "The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court," Mark Heleen, Navient's chief legal officer, said in a statement. 39 state Attorneys General announced today that Navient, known as one of the nation’s largest student loan servicers, will provide relief totaling 1.85 billion to resolve allegations of widespread unfair and deceptive student loan servicing practices and abuses in originating predatory student loans. Navient, and its predecessor, Sallie Mae, have allegedly created a repayment system designed to systematically misallocate regular payments and extra payments. Under the terms of the settlement, Navient will cancel the remaining balance on 1.7 billion in subprime private student loan balances owed by more than. Under the agreement, Navient is denying it violated consumer protection laws or caused borrowers harm. "Navient repeatedly and deliberately put profits ahead of its borrowers - it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back, and placed an unfair burden on people trying to improve their lives through education," Shapiro, who co-led the settlement, said in a statement. Altogether, it services more than 300 billion in federal and private student loans. He also accused Navient of engaging in the use of risky subprime private loans for students to attend for-profit colleges, some with dubious track records, while knowing those borrowers would be unable to repay their debts. A group of public servants who had contacted Navient for help repaying their loans (collectively, Plaintiffs) filed a putative class action lawsuit. Pennsylvania Attorney General Josh Shapiro, who spearheaded a lawsuit against Navient in 2017, said the loan management company steered borrowers further into debt through forbearance practices, which allowed borrowers to temporarily postpone repayment while still being charged interest. ![]()
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