{"id":2797,"date":"2022-01-28T04:21:28","date_gmt":"2022-01-28T04:21:28","guid":{"rendered":"https:\/\/africanamericanvoice.net\/?p=2797"},"modified":"2022-01-28T04:21:28","modified_gmt":"2022-01-28T04:21:28","slug":"landmark-1-85-billion-in-relief-for-federal-and-private-loan-borrowers","status":"publish","type":"post","link":"https:\/\/africanamericanvoice.net\/?p=2797","title":{"rendered":"Landmark $1.85 Billion in Relief for Federal and Private Loan Borrowers"},"content":{"rendered":"

By Charlene Crowell, Special to The Informer<\/a><\/span><\/p>\n

A broad coalition of state attorneys general recently secured student loan debt cancellation and restitution against Navient, the nation\u2019s largest student loan servicer.<\/p>\n

Pending federal court approval of the settlement, a record $1.7 billion in debt and an additional $95 million in restitution will resolve and relieve related complaints dating back as far as 2009 regarding federal and private student loans.<\/p>\n

\u201cOur investigation uncovered two deceptive and unfair schemes Navient was using that broke the law and put their own profits ahead of the people they served,\u201d\u00a0said<\/a>\u00a0Pennsylvania State Attorney General Josh Shapiro on Jan. 13.<\/p>\n

Other state attorneys general signing on to the\u00a0settlement<\/a>\u00a0included locales with substantial Black and other minority populations including Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, South Carolina, Tennessee, Virginia, Washington, Wisconsin and the District of Columbia.<\/p>\n

The attorneys general alleged that struggling federal student loan borrowers were never advised by Navient about the benefits of affordable, income-driven loan repayment plans that had the potential to reduce payments to as low as $0 per month, provided interest subsidies, and\/or helped attain forgiveness of any remaining balance after 20-25 years of qualifying payments. Under the Public Service Loan Forgiveness Program, borrowers who worked in government and qualified public service careers could retire their loans following 10 years of on-time payments.<\/p>\n

Instead, Navient steered these borrowers into costly long-term forbearance plans that deepened loan debts through additional interest costs.<\/p>\n

Additionally, Navient originated predatory subprime private loans to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of such borrowers would be unable to repay the loans. These higher-cost and risky subprime loans were used as \u201can inducement to get schools to use Navient as a preferred lender\u201d for highly-profitable federal and \u201cprime\u201d private loans. These predatory loans were made without regard for borrowers and their families, many of whom were unknowingly ensnared in debts they could never repay.<\/p>\n

When facing unemployment or other financial hardship, many borrowers rely on their student loan servicer to help them enroll in alternative repayment plans or request a modification of loan terms. While borrowers choose their student loans, they generally have no choice as to whom will service that same loan. In many cases, borrowers must depend upon a loan official not of their choosing, and seldom the same one over the life of a loan.<\/p>\n

Among the settlement\u2019s key provisions, Navient is required to:<\/p>\n