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Idaho State News

Wasden Announces Nearly $4 Million in Student Debt Relief in Settlement with Loan Servicer Navient

(BOISE) – Attorney General Lawrence Wasden announced today a settlement with Navient, one of the nation’s largest student loan servicers, that will provide $3,972,316 in student loan debt relief to eligible Idaho borrowers. The settlement was filed today 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. “Additionally, the settlement corrects Navient’s past actions and includes safeguards to help ensure the company does not take advantage of student loan borrowers in the future. I credit Navient for being willing to amicably resolve this matter for Idaho borrowers.”
 
Borrowers receiving 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 this benefit. 
 
The settlement stems from concerns over Navient’s practices, which included steering borrowers struggling to make payments on their loans towards high interest forbearances that added significant additional long-term debt. The settlement also addresses the company’s use of sub-prime private loans to students who attended for-profit colleges with low graduation rates. The practices resulted in students often incurring substantial debts they were never likely to repay.
 
In addition to providing student loan debt relief, the settlement requires Navient to:Continue to explain the benefits of income-driven repayment plans and offer to estimate income-driven payment amounts before placing borrowers into optional forbearances;Maintain customer service practices that support borrower success, such as processing payments quickly and accurately, making payment histories available to borrowers, directing extra payments to loans with the highest interest rates, and enabling borrowers to provide standing instructions in allocating extra payments; andTrain specialists who will advise distressed borrowers concerning alternative repayment options. The affected loans are private education loans originated largely between 2002 and 2010 that are in default.
 
The Office of the Attorney General has prepared a list of Frequently Asked Questions to help borrowers better understand the settlement’s eligibility requirements for loan discharge. If a borrower’s question is not covered in the FAQs, the borrower may contact the Attorney General’s Consumer Protection Division via email at consumer_protection@ag.idaho.gov or by phone at 208-334-2424.