Student Loan Processor Navient is to Cancel $1.7B in Student Loans

Many student loan borrowers will be thrilled to learn that one student loan processor has been required to cancel many loans.

Navient, one of the largest student loan servicers, has been required to cancel $1.7 billion in student loans after a deal it reached with 39 states.

The lender was accused of giving out private loans to students who would be unable to pay them.
As part of the settlement announced on Thursday, Navient denied that it violated the law. The settlement however resolves all six outstanding state lawsuits against Navient, company officials said.

“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.

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 about $145 million to the states.

Nearly 66,000 borrowers are expected to get their loans cleared under this $1.85 billion deal.

“At long last, the student loan borrowers who had been forced to shoulder the burden of dangerous and predatory private student loans made by Sallie Mae and owned by Navient will finally be debt-free,” said Mike Pierce, executive director of the Student Borrower Protection Center.

The company was formed in 2014 by the split of Sallie Mae into two entities: Sallie Mae Bank and Navient.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.