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Student Loan Servicer Navient to Cancel $1.7 Billion in Debt

By:
Chris Gaetano
Published Date:
Jan 14, 2022
GettyImages-1298629300-student-loan-relief-240

Navient, a major student loan servicer, has agreed to a settlement with 39 states whereby it will cancel $1.7 billion worth of education debt, CNBC reported.

The states, in six separate lawsuits, had accused the company of making private loans to borrowers who were extremely unlikely to ever pay them off. The states alleged that this was a predatory practice against vulnerable students. The settlement, which also includes a $145 million payment to the states, resolves all six cases at once. The deal will see around 66,000 borrowers getting their loans cleared. 

As part of the settlement, Navient denied that it violated the law. In a statement, the company's chief legal officer said that the suits were based on unfounded claims, and that it settled solely to avoid the additional burden, expense, time and distraction to prevail in court.