KANSAS CITY, Mo. — Navient, one of the nation’s largest student loan servicers, will forgive millions of dollars in student debt and pay millions in restitution to Missourians and Kansans after reaching a civil settlement on charges predatory practices.
The Missouri settlement terms are $53 million – $2.5 million in restitution and $51 million in private loan debt forgiveness.
In Kansas, state Attorney General Derek Schmidt said the settlement total reached $10.3 million.
“More than 400 Kansans will receive nearly $10.3 million in student loan relief as part of a nationwide settlement with one of the nation’s largest student loan servicers,” a statement from Schmidt’s office said. .
Missouri Attorney General Eric Schmitt’s office broke the news for Missouri. In addition to Missouri and Kansas, Navient has also reached settlements with 37 other states that have joined a lawsuit over its practices.
According to the Kansas AG statement, the total settlement, including all states, is $1.85 billion.
Navient is perhaps best known by the brand name “Sallie Mae”.
“Navient was formed in 2014 when SLM Corporation (known as Sallie Mae) spun off its lending business from its consumer banking business,” according to the Kansas AG statement. “After the separation, the company’s loan servicing and collection operations were rebranded as Navient, and consumer banking continued under the Sallie Mae brand.”
Navient has been accused of directing borrowers to worse payment plans since 2009, according to Missouri AG.
“After saying it would help borrowers find the best repayment options for them, Navient steered struggling student borrowers toward costly long-term forbearances instead of advising them on the benefits of more affordable repayment plans focused on income,” the Missouri AG statement said. .
He was also accused of lending to students who the company knew would not be able to repay the loans.
“Navient also allegedly created risky private predatory loans to students attending for-profit schools and colleges with low graduation rates, even though he knew a very high percentage of those borrowers would be unable to repay the loans. “, states the statement from Missouri AG.
Those with loans from the company can expect notice from Navient if their debt is forgiven or if they can expect to recover money on loans that have already been repaid.