JEFFERSON CITY, Mo. – A settlement between the Missouri Attorney General’s office and Navient, one of the nation’s largest student loan servicers, has resulted in $53 million in debt relief for Missourians.
The civil settlement agreement with AG Eric Schmitt’s office and 38 other states was with Navient over “allegations of widespread unfair and deceptive student loan servicing” Schmitt said.
The AG’s office said Navient falsely represented itself. Instead of helping “borrowers find the best repayment options for them, 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.”
“Taking advantage of students who need assistance in funding their educations is illegal, and can hurt the futures of so many. This settlement is a great result for Missouri students, and for the entire state,” Schmitt said.
Following the settlement, Navient is now required to explain income-driven repayment plans and offer to estimate income-driven payment amounts before putting borrowers into optional forbearances.
Specialists are also required to be trained by Navient to “advise distressed borrowers concerning alternative repayment options.” The student loan servicer must also notify borrowers “about the U.S. Department of Education’s new PSLF opportunity, which temporarily offers millions of qualifying public service workers the chance to have previously non-qualifying repayment periods counted toward loan forgiveness.”
Borrowers receiving private loan debt cancellation will be notified by Navient. Loan borrowers eligible for a restitution payment of approximately $260 will receive a postcard in the mail this spring.