Maura Healey Announces $1.85 Billion Student Loan Settlement With Navient, Formerly Sallie Mae – Sentinel and Enterprise
Navient, one of the nation’s largest student loan managers, is coughing up money – to the tune of $1.85 billion – after facing allegations of unfair, deceptive and predatory student loan practices , announced Massachusetts Attorney General Maura Healey.
“Student borrowers here in Massachusetts and across the country who were already facing financial hardship were put even deeper into debt by Navient at a time when they needed help the most,” Healey said of the company. , formerly known as Sallie Mae. “They stopped people from doing things like buying houses, buying cars, saving for retirement or pursuing a career.”
Healey, along with 38 other state attorneys general, announced that Navient would be “held accountable for its failures” via a $1.85 billion settlement. The company will pay $95 million in restitution to compensate 350,000 federal borrowers subject to certain long-term forbearances, which allowed borrowers to lock in their monthly payments while snowballing interest.
The company also agreed to forgive $1.7 billion in debt for borrowers of subprime and other private loans made between 2002 and 2014, then had more than seven months of delinquent payments by June 20, 2021.
Bay State will receive more than $6 million, including $2.2 million in restitution, for more than 8,300 federal borrowers, and more than 1,500 state borrowers will receive more than $41 million in private debt relief, Healey announced.
Healey pointed out that those who are eligible for the roughly $260 restitution, or debt relief, don’t have to do anything to collect their relief later this year. She recommended borrowers go to studentaid.gov to update their details to get relief.
“It really is a miracle that I’ve been praying for for almost 10+ years now,” said Kelly Feeherry, a Massachusetts resident who took out loans to attend the for-profit New England Institute of Art. “I don’t have to be afraid to answer the phone of creditors and people who claim to be helping me but who are actually scamming me.”
Feeherry became emotional as she spoke of the anguish Navient has inflicted on her and the relief she feels at potentially being able to go back to school, buy her first home with her husband and support her four-year-old daughter.
In a statement, the company called the AGs’ claims “unsubstantiated” and said the decision to settle “allows us to avoid the additional burden, expense, time and distraction that prevails in court.” said Navient Chief Legal Officer Mark Heleen. “Navient is and has always been focused on helping student borrowers understand and select the right payment options to meet their needs.