Michigan student borrowers who accrued debt through loan servicer Navient are now eligible for relief as a result of a $1.85 billion nationwide settlement to resolve allegations of widespread unfair and deceptive student loan servicing practices and abuses in originating predatory student loans.
Michigan Attorney General Dana Nessel is one of 39 attorneys general to take part in the settlement, which was announced last week.
“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.”
As a result of this settlement, 1,576 Michigan borrowers will receive over $38.6 million in debt relief.
The borrowers receiving private loan debt cancellation will be contacted by Navient by July 2022, along with receiving refunds of any payments made on the cancelled private loans after June 30, 2021.
Federal loan borrowers who qualify for relief under this settlement do not need to take any action except update or create their studentaid.gov account to ensure that the U.S. Department of Education has their current address.
For additional information, visit www.NavientAGSettlement.com.
Until recently, Navient had a contract to service federal student loans owned by the U.S. Department of Education, including a large portfolio of loans made under the Direct Loan Program and a smaller portfolio of loans made under the Federal Family Education Loan (FFEL) program.
In late 2020, the U.S. Department of Education announced the transfer of this contract from Navient to Aidvantage, a division of Maximus Federal Services, Inc. However, Navient will continue to service federal student loans made under the FFEL Program that are owned by private lenders, as well as non-federal private student loans.
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