Student-Loan Processor Navient to Cancel $1.7 Billion of Debts

The large student-loan processor will cancel the debt of 66,000 borrowers, totaling $1.7 billion, in an agreement with 40 state attorneys general.

Credit Types/Services, Consumer Lending

1/13/2022 8:28:00 PM

Breaking: Navient, one of the nation’s largest student-loan processors, will cancel the debt of 66,000 borrowers, totaling $1.7 billion, in a deal with several states

The large student-loan processor will cancel the debt of 66,000 borrowers, totaling $1.7 billion, in an agreement with 40 state attorneys general.

, the company said. The loans in question are private loans, meaning they are not guaranteed by the federal government. As part of the settlement, the company will make a one-time payment of approximately $145 million to the states.“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 Mark Heleen, Navient’s chief legal officer.

All of the loans forgiven in the agreement were in default, and most originated between 2002 and 2010 at,prior to Navient’s spinoff from the student-lending giant.Navient has faced numerous lawsuits in recent years that alleged the company engaged in unfair and deceptive conduct against borrowers. Last March, a Seattle-area judge ruled that the company had broken a consumer protection law in a case brought by Washington’s attorney general.

Read more: The Wall Street Journal »

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😲😲😲😲😲 Get government out of student loans. So who picks up this tab? Nothing is free. 👍💙👍Sounds good 👍 I should have never paid those loans off... considering 4,000.000 people have substantial student debt, to cancel just over 1% is a good start. Democrats gearing up for the primary. Buying votes I hope that includes NaviRefinance!

HELBpage come and see this. Learn from your elders ASAP Wow Weird how Navient also just offloaded a bunch of student-loan accounts to another lender…

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Do people who paid them off get to get in on this ? KeepItBlueDems How generous of them after you pay 3X what you originally borrowed!!! Fucking sharks! 🙋🏾‍♂️ Excuse me Mr and Mrs I asked y’all to look into “Nelnet” my student loans are with “N-E-L-N-E-T. Thank you regards- Whistleblower That is unbelievable if it is true.our hats off to Navient

Why did I pay mine off right away? Navient has been giving the ppl hell for ages Don’t refinance your student loans! It could prevent you from getting them forgiven. MaddowBlog Breaking: the headline is misleading clickbait journalism. Hence, so is your retweet. It was a court settlement. Reuters got it right.

I wonder if a certain someone in the government is working his magic? MaddowBlog How many are of non white debts? It would be interesting to see how they come to that decision.

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Just after they got rid of my loans to another company. “All of the loans forgiven in the agreement were in default, and most originated between 2002 and 2010 at Sallie Mae, prior to Navient’s spinoff from the student-lending giant.” So rewarding those who didn’t pay cuz they weren’t gonna get a dime anyway?

$1.7 billion worth of student loan debt forgiven! How do I find out if I'm one of the qualified ones to cancel my debt I hope mine is included in this. Dang I just made my last payment. MaddowBlog Now *that's* what I'm talking about!!! Do the people who paid it off get their money back? What does this say about personal accountability?

MaddowBlog So the lesson here is to sue them into submission because Biden ain’t helping you all.

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WSJ News Exclusive | Government Losses on Student Debt Climb Above $100 Billion Amid Pause on PaymentsWith costs mounting, congressional Republicans have asked the Education Department to release documents related to how the government calculates projected losses from students defaulting on loans. Honestly doesn't seem like that much, given what they waste already. That appears to be a lie... If they’re hurting for a few billion, they could just print more money. That seems to have worked out so far. Inflation is only at 6.9%.

1.12% , the company said. The loans in question are private loans, meaning they are not guaranteed by the federal government. As part of the settlement, the company will make a one-time payment of approximately $145 million to the states. “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 Mark Heleen, Navient’s chief legal officer. All of the loans forgiven in the agreement were in default, and most originated between 2002 and 2010 at , prior to Navient’s spinoff from the student-lending giant. Navient has faced numerous lawsuits in recent years that alleged the company engaged in unfair and deceptive conduct against borrowers. Last March, a Seattle-area judge ruled that the company had broken a consumer protection law in a case brought by Washington’s attorney general. “Navient repeatedly and deliberately put profits ahead of its borrowers—it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back, and placed an unfair burden on people trying to improve their lives through education,” Pennsylvania Attorney General Josh Shapiro said. Related Video WSJ higher-education reporter Melissa Korn breaks down the select groups of borrowers who are currently eligible for student debt relief and what borrowers can expect next year. Photo: Getty Images In addition to loan cancellation and some restitution for borrowers with private loans, Navient will pay $95 million to about 350,000 federal loan borrowers—or about $260 each—who were placed into certain types of forbearance programs that caused them to accumulate more debt rather than entering income-based repayment plans, the states said. States will distribute restitution to borrowers within their jurisdictions. Massachusetts, for example, will receive more than $6 million, including $2.2 million in restitution for more than 8,300 federal loan borrowers, state Attorney General Maura Healey said. As part of the agreement, Navient continued to deny the claims or that the company has harmed any borrowers. Private loans without federal backing make up less than 10% of the total $1.7 trillion student-loan industry. About 43 million people owe $1.6 trillion in federal student debt, Education Department data show. About 5.2 million of those federal borrowers are in default. Those borrowers, unless they also held private student loans, are not affected by Thursday’s settlement. Navient is in the midst of an exit from federal student-loan processing. It has been one of the primary federal contractors, serving around six million borrowers. Its accounts are being transferred to a new contractor, Maximus, whose role was approved by the Education Department. The Biden administration is in the midst of restructuring its student-loan processing system. In November it announced it was ending its relationship with private collection agencies that had been tasked with recovering payments from federal to improve collections and provide borrowers with more support. Last February, borrowers in New York to force Navient’s loan-processing unit into bankruptcy, alleging the company had improperly collected debts they didn’t owe. The company called the claims frivolous, and a judge dismissed the case. The Consumer Financial Protection Bureau since 2017 over allegations that it steered borrowers into postponing payments instead of entering lower-cost, income-driven repayment plans. The CFPB has said the practice cost borrowers $4 billion in interest expense. Navient has disputed the government’s claims. Write to