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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsNavient AG Multi-State Settlement
https://navientagsettlement.com/Home/portalid/0?portalid=0Thursday, January 13, 2022
39 state Attorneys General announced today that Navient, known as one of the nations largest student loan servicers, will provide relief totaling $1.85 billion to resolve allegations of widespread unfair and deceptive student loan servicing practices and abuses in originating predatory student loans.
This settlement resolves claims that since 2009, despite representing that it would help borrowers find the best repayment options for them, Navient steered struggling student loan borrowers into costly long-term forbearances instead of counseling them about the benefits of more affordable income-driven repayment plans.
According to the attorneys general, the interest that accrued because of Navients forbearance steering practices was added to the borrowers loan balances, pushing borrowers further in debt. Had the company instead provided borrowers with the help it promised, income-driven repayment plans could have potentially reduced 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 (or 10 years for borrowers qualified under the Public Service Loan Forgiveness Program).
Lots more info at link. Looks as if those who live in one of the 39 participating states will receive a refund of ~$260 for being forced into forebearance instead of being offered the income-based repayment plan (which for most in this situation would have resulted in $0 payments without the excessive fees & compounded interest).
I know a couple of people this happened to. ~$60k student loan debt, inability to find job after graduating, called Navient in good faith to explore options while continuing to seek employment. Result: railroaded into forebearance.
$60k quickly escalated to $160k due to compound interest after 2 periods of forebearance. The person was not an econ major & had no idea about the compound interest issue. Was shocked to find a balance of ~$160k!
I was a support to these 2 friends while completing my degrees & we remain friends. I've seen the paperwork & have been present during the agonizing phone calls...
If you or someone you know might be a part of this class, the only action needed is to ensure the borrower's current address is correct at:
Studentaid.gov
Eligible persons are to receive a post card this spring regarding loan forgiveness & the teeny refund mentioned above. Of course, there is a long list of conditions that must be met in order to qualify...
Unsure how to follow up, other than to keep checking this settlement website for updates, given the great potential for dejoy's dystopian nightmare to delay or lose pieces of important mail.
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Navient AG Multi-State Settlement (Original Post)
SheltieLover
Jan 2022
OP
Econ is not required for many majors & not sure Navient made that detail clear anyway.
SheltieLover
Jan 2022
#2
My grandson hopefully would become one happy recipient of the loan cancellation
70sEraVet
Jan 2022
#5
Klaralven
(7,510 posts)1. How can you graduate from college and not understand compound interest?
SheltieLover
(57,073 posts)2. Econ is not required for many majors & not sure Navient made that detail clear anyway.
Hence the settlement.
Klaralven
(7,510 posts)3. Interest rate calculations are basic applied math
My recollection is that it was covered in about 8th grade math class.
Not knowing basic math like this is equivalent to illiteracy.
SheltieLover
(57,073 posts)4. Yw for the info & link, which is apparently a factor for many grads.
70sEraVet
(3,504 posts)5. My grandson hopefully would become one happy recipient of the loan cancellation
" Navient will cancel the remaining balance on $1.7 billion in subprime private student loan balances owed by more than 66,000 borrowers nationwide. In addition, Navient will pay $142.5 million to the attorneys general. "