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Student loan processor Navient has agreed to a nearly $2 billion settlement with 39 state attorneys general, according to reporting from the Wall Street Journal.
Navient is one of the largest student loan processors in the U.S. The settlement requires the company to cancel about $1.7 billion in delinquent private student loan debt for 66,000 borrowers.
The deal also forces Navient to pay $95 million in restitution.
Pennsylvania attorney general Josh Shapiro, one of the lead attorneys on the case, said, “Navient repeatedly and deliberately put profits ahead of its borrowers — it 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.”
Navient did not admit fault in the settlement and maintained that the company did not act illegally.
“The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court,” said Mark Heleen, Navient’s chief legal officer.
An announcement from Pennsylvania Attorney General Josh Shapiro’s office lists the states that co-led in the negotiation of the settlement, including Washington, Illinois, Massachusetts, and California.
Other states’ attorneys general joined the negotiations, including those from Arizona, Arkansas, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, 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, West Virginia, and Wisconsin.
Under the agreement, which was submitted to the U.S. District Court for the Middle District of Pennsylvania for approval, Navient will also pay the participating states $145 million.
If the settlement is approved, Navient will notify the borrowers whose debts will be forgiven. Details of the deal were posted by the participating states on a new website, NavientAGsettlement.com.
