SCHOOLED

Predatory Student Loan Company Will Cancel $1.7 Billion in Debt

A deal with 40 U.S. states will unburden 65,000 borrowers, with another 350,000 receiving restitution payments.

Attorneys general in 40 states have reached a $1.8 billion settlement with student loan processor Navient, which was accused by the government of intentionally saddling borrowers with high-interest loans the company knew they wouldn’t be able to afford. According to The Philadelphia Inquirer, Navient will cancel $1.7 billion in balances owed by 65,000 people across the U.S. About 350,000 borrowers will share $95 million in restitution payments, or roughly $260 each, the outlet reported. A 2017 U.S. Department of Education audit found that Navient steered those struggling with debt to more costlier repayment plans. The company, which last year gave up its contract with the Department of Education, denied the allegations, which it called baseless. “We made this decision to avoid the burden, expense, time and distraction it would take to resolve these claims through state-by-state litigation and investigations,” it said.