Navient Loan Settlement: GA Borrowers To Get $118M In Relief

GEORGIA — Georgia and 38 other states have reached a $1.85 billion nationwide settlement with Navient, one of the nation’s largest student loan servicers, Georgia Attorney General Chris Carr announced Friday.

Carr said the settlement resolves claims that since 2009, 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. This, despite Navient representing that it would help borrowers find the best repayment options for them.

“For years, Georgians who turned to Navient for help with repaying their student loans saw their debt worsen rather than improve due to the company’s deceptive practices,” Carr said in a news release.

“By reaching this settlement, Georgia borrowers will receive much-needed relief totaling more than $118 million as they work to regain their financial footing," he continued. "We are proud of this announcement and hope it serves as a reminder that we will pursue servicers that unfairly take advantage of those struggling with student loan debt."

In Georgia, the settlement requires Navient to cancel over $113 million in private loan debt owed by 4,268 Georgia borrowers. It also requires the company to pay more than $5.9 million in restitution to 22,468 Georgia federal loan borrowers.

The settlement also includes an injunction that requires Navient to explain the benefits of income driven repayment plans and to offer to estimate income-driven payment amounts before placing borrowers into optional forbearances.

Additionally, the attorney general's office said that Navient must train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning PSLF and related programs. The company is also prohibited from compensating customer service agents in a manner that incentivizes them to minimize time spent counseling borrowers, the Georgia Attorney General's Office said.

The settlement also requires Navient to notify borrowers about the U.S. Department of Education's recently announced PSLF limited waiver opportunity, which temporarily offers millions of qualifying public service workers the chance to have previously nonqualifying repayment periods counted toward loan forgiveness – provided that they consolidate into the Direct Loan Program and file employment certifications by Oct. 31, 2022.

Consumers receiving private-loan debt relief under the settlement will receive a notice from Navient. Federal loan borrowers who are eligible for a restitution payment will receive a postcard in the mail from the settlement administrator later this spring. Federal loan borrowers who qualify for relief under this settlement do not need to take any action except update or create their studentaid.gov account to ensure the U.S. Department of Education has their current address.
For more information, visit www.NavientAGSettlement.com.