Student loan servicer Navient has agreed to a $1.85 billion settlement with 39 states, including Indiana.
The company was accused of unfair and deceptive practices for student loan services and “abuses in originating predatory student loans.”
The agreement will cancel the private loans of roughly 66,000 borrowers, pay states a total of about $143 million and provide restitution to thousands of federal loan borrowers.
According to the Office of the Indiana Attorney General, the settlement with Navient will include more than $31 million in relief to Hoosiers. Of that, $26.3 million will go to 1,189 borrowers in loan forgiveness. Another $4.3 million will go to compensate 16,304 consumers. The state of Indiana will receive a one-time payment of $688,871.
In Indiana, federal or private student loans average about $32,000 per person, according to the Indiana Community Action Poverty Institute.
Navient issued a news release denying the company broke any laws.
“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.
In 2019, the Indiana attorney general’s office joined a bipartisan coalition of state attorneys general.
“This settlement offers resolution to affected borrowers while protecting the jobs of thousands of Navient employees,” said Attorney General Todd Rokita in a statement.
Borrowers qualifying for full cancellation on private loans or restitution for federal loans will be contacted later this year by Navient or the settlement administrator.
Navient has offices in four states including Indiana.