(Des Moines, IA) -- More than 1,500 Iowans who borrowed money for college from a private lender, could have millions of dollars in student loan debt cancelled under a legal settlement.
Iowa and nearly 40-states accused the student loan lender Navient of widespread unfair and deceptive student loan services.
This settlement, joined by a coalition of 39 attorneys general, resolves claims against Navient dating back to 2009. The AGs alleged Naviant said it would help borrowers find the best repayment options, but instead recommended costly long-term agreements, instead of counseling them about the benefits of more affordable income-driven repayment plans.
“Today’s settlement finally holds Navient accountable for the harm it caused students and families for more than a decade. This long-overdue relief will help borrowers move forward and set an example for student loan servicers in the future,” Miller said.
Attorney General Miller filed the settlement as a proposed Consent Judgement today in Polk County District Court. The settlement will require court approval.
Under the terms of the settlement, Navient will cancel the remaining balance on more than $1.6 billion in subprime private student loan balances owed by approximately 62,000 borrowers nationwide.
The lender will pay $95 million in restitution (about $260 each) to approximately 350,000 federal loan borrowers placed in certain types of long-term forbearances.
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