Washington AG: $45M settlement with student loan company
OLYMPIA, Wash. (AP) — Washington state Attorney General Bob Ferguson says a major student loan servicer will provide about $45 million in debt relief and restitution to settle the state’s lawsuit that alleged it deceived loan seekers and engaged in unfair practices.
It’s part of a national settlement in which Navient, which was spun off from Sallie Mae in 2014, will cancel $1.7 billion in debt and pay $95 million in restitution.
In a statement Thursday Ferguson said Navient will extend more than $35 million in debt relief, erasing the remaining debt of more than 1,400 people in the state who took out certain private student loans between 2002 and 2014. The average loan was about $25,000 per person.
The company will also pay $2.3 million in restitution to approximately 8,900 Washington borrowers enrolled in a postponement of loan payments for an extended period of time between 2009 and 2017 and pay $7 million to Washington to cover costs from the litigation.
Ferguson said people receiving private loan debt cancellation will get a notice from Navient, and they will receive refunds of any payments made on those loans after June 30, 2021.
“Higher education should not equal a lifelong debt sentence — and student loan corporations do not have the right to deceive Washingtonians in order to maximize their profits,” Ferguson said.