More than 1,500 Delaware student borrowers will see relief thanks to a 1.85 billion-dollar settlement with Wilmington-based Navient.
Attorney General Kathy Jennings announced the multistate settlement with one of the country’s largest student loan servicers on Thursday.
More than 97% of Delaware’s $5.34 million share of the settlement will go directly to Delaware borrowers in the form of borrower restitution or private loan forgiveness.
That’s broken up into a total of $400,000 in restitution payments for 1,528 federal loan borrowers with 145 Delaware borrowers receiving nearly $4.8 million in private loan debt cancellation.
“Addressing the student loan crisis is one of my biggest consumer protection priorities,” said Jennings. “We have to recognize that even when the playing field is level, student borrowers are fighting an uphill battle. Between rising tuition and a generation of teenagers who were told that a four-year degree was vital to their success, student debt has become a crisis. With Day One debt burdens sometimes eclipsing six figures, it’s no surprise that thousands of people struggle to make ends meet. At a minimum, loan servicers should be expected to follow the law.”
The settlement stems from allegations against Navient of widespread unfair, deceptive, and predatory practices.
In the agreements, Navient expressly denies violating any law, including consumer-protection laws or causing borrower harm, and the company has agreed to maintain servicing practices that support borrower success.
In a statement Navient’s chief legal officer says the allegations were based on unfounded claims.
“The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court,” said Navient’s Chief Legal Officer Mark Heleen. “Navient is and has been continually focused on helping student loan borrowers understand and select the right payment options to fit their needs. In fact, we’ve driven up income-driven repayment plan enrollment and driven down default rates, and every year, hundreds of thousands of borrowers we support successfully pay off their student loans.”
Federal loan borrowers who qualify for relief under the settlement have to update or create their studentaid.gov account to ensure the U.S. Department of Education has their current address.
