Maura Healey announces $1.85 billion student loan settlement with Navient, formerly Sallie Mae

One of the country’s largest student loan servicers, Navient, is coughing up some serious cash– to the tune of $1.85 billion– after facing allegations of unfair, deceptive and predatory student loan practices, Massachusetts Attorney General Maura Healey announced.

“Student borrowers here in Massachusetts and around this country who were already facing financial hardships were driven further into debt by Navient at a time when they needed help most,” Healey said of the company, formerly known as Sallie Mae. “They’ve held people back from doing things like buying homes, buying cars, saving for retirement or pursuing careers.”

Healery, along with 38 other state attorneys general, announced that Navient will be “held accountable for its failures” via a $1.85 billion settlement. The company will pay $95 million in restitution to compensate 350,000 federal loan borrowers placed in certain long-term forbearances, which allowed borrowers to stall on their monthly payments while causing interest to snowball.

The company has also agreed to forgive $1.7 billion in debt for borrowers in subprime and other private loans made between 2002 and 2014, and then had over seven months of delinquent payments prior to June 20, 2021.

The Bay State will receive over $6 million, including $2.2 million in restitution, for over 8,300 federal loan borrowers, and more than 1,500 borrowers in the state will receive over $41 million in private loan debt relief, Healey announced.

Healey emphasized that those who are eligible for the restitution of about $260, or for the debt relief, do not have to do anything to collect their relief later this year. She recommended that borrowers head to studentaid.gov to update their contact information to get the relief.

“This really is a miracle that I’ve been praying for for almost over 10 years now,” said Kelly Feeherry, a Massachusetts resident who took out loans to attend the for-profit New England Institute of Art. “I don’t have to be scared to answer my phone from creditors and people who would claim to be helping me, but were in fact actually scamming me.”

Feeherry got emotional as she talked about the anguish Navient put her through, and the relief she feels at being able to potentially go back to school, purchase her first home with her husband, and provide for her four-year-old daughter.

In a statement, the company called the AGs’ claims “unfounded,” and said the decision to settle “allows us to avoid the additional burden, expense, time and distraction to prevail in court,” Navient’s Chief Legal Officer Mark Heleen said. “Navient is and has been continually focused on helping student loan borrowers understand and select the right payment options to fit their needs.”

from Boston Herald https://ift.tt/33uM8Z1