Student loan company agrees to $1.85 billion settlement with states | Regional


Oregon is part of a $1.85 billion settlement with a National Student Loans Service, state Attorney General Ellen Rosenblum announced Thursday.



SALEM, OR — Oregon is part of a $1.85 billion settlement with a national student loan servicer, state Attorney General Ellen Rosenblum announced Thursday.

Rosenblum said the settlement was negotiated between 39 state attorneys general and one of the nation’s largest student loan managers, Navient. These states accused the company of shifting its borrowers to more expensive payment plans by offering to work with them to adjust loan repayment to more customer-friendly plans.






Rosenblum says the settlement resolves allegations of unfair and deceptive student loan service practices and abuse. The settlement earmarks $95 million for student restitution and $1.71 billion for debt cancellation.

Rosenblum’s office states, “In Oregon, this means 5,488 federal borrowers will receive $1,462,937 in restitution and 864 borrowers will receive $22,454,017 in private debt forgiveness.”

It says borrowers who qualify for relief under the settlement don’t have to do anything to receive their refund or cancellation, as they will receive notice directly from Navient. It states that “Borrowers should update or create their studentaid.gov account to ensure that the U.S. Department of Education has their current address. For more information, visit www.NavientAGSettlement.com.”

“For more than a decade, Navient has promised student borrowers that it will help them find the best repayment options. Instead, they directed struggling borrowers to more expensive payment plans,” Attorney General Rosenblum said. “Today we are taking some of that money back and putting it back into the hands of Oregonians who have been hurt. I sincerely hope this helps many of them move on with their lives. We will not break never the cycle of student debt if we don’t hold student loan managers accountable.

According to the attorneys general, interest on loans accrued as a result of Navient’s forbearance practices was added to borrowers’ loan balances instead of providing borrowers with the relief Navient promised.

The settlement requires Navient to notify borrowers of the U.S. Department of Education’s PSLF Limited Waiver, which provides skilled public service workers with the ability to have previously ineligible repayment periods count toward waiver of loan, provided they consolidate into the direct loan program and file certificates of employment by October. 31, 2022.

Today’s settlement also involves the attorneys general of Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia and Wisconsin.

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