BOISE — Attorney General Lawrence Wasden on Friday announced a settlement with Navient, one of the nation’s largest student loan servicers, that will provide $3,972,316 in student debt relief to eligible borrowers in Idaho. The settlement was filed Friday with the Ada County District Court and is now pending court approval.
“More than 170 Idaho borrowers will receive debt relief as a result of this settlement,” Wasden said. “Furthermore, the settlement corrects Navient’s past actions and includes safeguards to help ensure the company does not take advantage of student borrowers in the future. I thank Navient for being willing to resolve this matter out of court.” for Idaho borrowers.
Borrowers who receive private loan debt relief under the settlement will receive written notice from Navient in the coming months and do not need to take any action to receive the benefit.
The settlement stems from concerns about Navient’s practices, which included steering borrowers struggling to make payments on their loans toward high interest forbearances that added significant additional long-term debt. The settlement also addresses the company’s use of risky private loans to students who attended for-profit colleges with low graduation rates. As a result of these practices, students often incurred substantial debts that they would likely never repay.
In addition to providing student debt relief, the settlement requires Navient to:
- Continue to explain the benefits of income-based repayment plans and offer to estimate income-based payment amounts before placing borrowers in optional forbearances;
- Maintain customer service practices that support borrower success, such as processing payments quickly and accurately, making payment histories available to borrowers, directing additional payments to rate loans interest rates and the possibility for borrowers to provide standing instructions for the allocation of additional payments; and
- Train specialists who will advise borrowers in difficulty on alternative repayment options.
The loans in question are private education loans issued largely between 2002 and 2010 that are in default.