New Jersey student borrowers are set to receive more than $60 million in aid following a settlement with Navient Corp., Acting Attorney General Andrew Bruck and the state’s Consumer Affairs Division announced Thursday.
The $57.2 million in debt relief and $3.1 million in restitution to New Jersey borrowers — plus $3 million in payments to the state — are part of a nationwide settlement of 1, $85 billion.
It resolves a lawsuit filed in 2020 against the student loan servicing giant and its subsidiary, Navient Solutions, for alleged predatory behavior.
The state had accused Navient of deceptive conduct, unreasonable business practices and misrepresentation in servicing thousands of New Jersey consumer student loans for a decade.
The debt forgiveness will benefit about 2,040 New Jersey borrowers, while another 11,522 New Jersey borrowers will receive restitution payments of about $260 each, under the terms of the settlement, pending court approval. .
Nationally, Navient will cancel more than $1.7 billion in subprime private student loans owed by approximately 66,000 borrowers, while also paying $95 million in restitution to approximately 350,000 consumers.
Navient, formerly known as Sallie Mae, was one of the nation’s largest federal and private student loan managers until she partially left the company in September 2021.
In the settlement, Navient expressly denies violating any law, including consumer protection laws, or causing harm to the borrower, according to the company’s written statement.
Who receives the payments
Consumers do not have to do anything to receive the benefits.
Anyone receiving a private loan debt cancellation will be notified by Navient, and they will also be refunded any payments made after June of last year.
Navient said the loan debt to be written off would be part of “certain private education eligible loans that were issued substantially between 2002 and 2010 and then defaulted and were written off,” according to its own release. Wednesday.
Those eligible for the Restitution Payment will automatically receive a check from the Attorney General’s Settlement Administrator later this year.
Federal borrowers who may be eligible are asked to update their contact information in their online account.
Additional information is available on the settlement website.
“Too many New Jerseyans are struggling to repay their student loans,” Bruck said in a written statement. “And too many of those borrowers have had it harder because their student loan manager put company profits above their best interests.”
More than 44 million people across the country took out student loans as the average cost of tuition and expenses for a four-year college or university rose about eight times faster than the average wage , between 1986 and 2016.
Total student loan debt is now estimated at over $1.75 trillion nationwide.
According to the state attorney general’s office, the average New Jersey borrower has student debt of $35,730, among the highest in the nation.
“With today’s settlement, we are holding one of the nation’s largest student loan servicers accountable, and putting millions of dollars back into the pockets of our residents,” Bruck said.
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