Michigan Attorney General Dana Nessel issued the following statement on entering a settlement with Navient as part of a multistate effort, which will directly impact 1,576 student borrowers in Michigan through debt cancellation and requires beneficial changes in Navient’s business practices:
"The predatory practices used by Navient exploited students who wanted nothing more than an education,” Nessel said. “The company placed borrowers in risky subprime loans, causing them to incur debts they could never repay. This settlement reflects accountability for affected borrowers across the country.”
This settlement involves 38 states and the District of Columbia. Under the terms of the settlement, Navient will cancel the remaining balance on $1.7 billion in subprime private student loan balances owed by more than 66,000 borrowers nationwide. This includes 1,576 borrowers in Michigan.
The settlement also includes conduct reforms that require Navient to explain the benefits of income-driven repayment plans and to offer to estimate income-driven payment amounts before placing borrowers into optional forbearances.
Additionally, Navient must train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness (PSLF) and related programs. The conduct reforms imposed by the settlement include prohibitions on compensating customer service agents in a manner that incentivizes them to minimize time spent counseling borrowers.
The Department of Attorney General is still reviewing the full impact this settlement will have for Michigan borrowers. An update will be provided once the full scope of relief is determined.
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