Navient, a large student loan servicer, has settled allegations of predatory lending practices for $1.85 billion, Pennsylvania’s attorney general announced Thursday.
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Shapiro said the subprime loans were made “to borrowers they knew could not pay the money back,” a situation similar to the 2008 mortgage crisis. Additionally, he said, Navient “mislead borrowers into forbearances … and led many to accumulate more debt and never-ending interest payments.” “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,” said Navient Chief Legal Officer Mark Heleen in a statement.
Navient must also train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness and related programs.
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