Student loan collecting company Navient has settled a lawsuit over allegations of predatory lending practices. It has agreed to cancel $1.7 billion in debt owed by more than 66,000 borrowers nationwide and pay over $140 million in other penalties to settle.
The $1.85 billion deal was made with 39 state attorneys general, AP reported.
Navient “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,” Pennsylvania Attorney General Josh Shapiro, who was one of the lead negotiators for the settlement, said in a statement.
The settlement also includes the states of Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
Black students carry a heavy student loan debt, with Black and African-American bachelor’s degree holders having an average of $52,000 in student loan debt. Forty-five percent of this debt is from student loans for graduate school.
The settlement agreement covers only certain private student loans that Navient or its predecessor, Sallie Mae, Forbes reported.
Borrowers who will receive cancellation of their student loan debt must have attended certain for-profit educational institutions such as Corinthian schools, DeVry University, the Art Institutes, ITT Technical Institutes, among others. And the student loans must have been received between 2002 and 2014 in one of the 39 states.
“Federal student loans are not eligible for cancellation under the settlement. But these borrowers may be eligible for Borrower Defense to Repayment, a federal student loan forgiveness program that can cancel the federal student loan debt for borrowers who were defrauded by their school,” Fobes reported.
To find out if you qualify for student loan cancellation, visit www.NavientAGSettlement.com.