Apparently, it *is* that easy for student loan companies to simply disappear debt.
Under a lawsuit settlement announced by Attorney General Daniel Cameron’s office, Navient has agreed to cancel over $43 million in debt for 2,155 Kentuckians and pay more than $1.2 million in restitutions to 4,659 Kentucky borrowers.
That’s $19,973 in debt wiped out per borrower (if the settlement agreement were actually going to be applied equally). And, $266 extra in the pockets of those receiving restitution.
What did Navient do to be hit with such a big lawsuit?
Thirty-eight states, as well as the District of Columbia, sued the company alleging that Navient issued predatory loans that it knew many borrowers wouldn’t be able to pay back. Then, Navient failed to properly help borrowers pay back their debt.
Borrowers whose student loans will be canceled under this lawsuit should receive a notice from Navient and a refund for payments paid after June 30, 2021. Those who are eligible need to update or create a studentaid.gov account with their current mailing address.
The settlement isn’t for everyone who received a Navient loan: Just for some borrowers who attended certain for-profit colleges, including DeVry University and ITT Technical Institute. Their loans must be past due and issued in 2002 or after.
Navient, which didn’t admit fault in the settlement, will also make some changes (as they should).
They’ll now be required, among other things, to:
- Explain the benefits of income-driven repayment plans
- Train specialists to advise distressed borrowers
- Cease compensating customer service agents in a manner that incentives them to minimize time counseling borrowers
The settlement awaits formal approval by the courts. And we’re waiting for President Biden to do his part to free the rest of us from student loan debt hell.
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