New Jersey student loan borrowers are in line for more than $ 60 million in relief from a settlement with Navient Corp., Acting Attorney General Andrew Bruck and the state Division of Consumer Affairs announced Thursday.
The $ 57.2 million in debt relief and the $ 3.1 million in restitution payments to New Jersey borrowers, plus the $ 3 million payment to the state, are part of a $ 1.85 billion national settlement.
It resolves a 2020 lawsuit filed against the student loan servicing giant and its subsidiary, Navient Solutions, for alleged predatory behavior.
The state had accused Navient of deceptive conduct, unconscionable business practices and misrepresentation in servicing thousands of New Jersey consumer student loans over a decade.
The debt cancellation will benefit about 2,040 New Jersey borrowers, while another 11,522 New Jersey borrowers will receive restitution payments of approximately $ 260 each, under the terms of the settlement, pending court approval.
Nationwide, Navient will pay off more than $ 1.7 billion in high-risk private student loans owed by some 66,000 borrowers, while also paying $ 95 million in restitution to some 350,000 consumers.
Navient, formerly known as Sallie Mae, was one of the nation’s largest private and federal student loan servicers, until it partially went out of business in September 2021.
In the settlement, Navient expressly denies having violated any laws, including consumer protection laws, or causing harm to the borrower, according to the company’s own written statement.
Who is receiving payments
Consumers do not need to take any action to receive the benefits.
Anyone receiving a private loan debt cancellation will be notified by Navient, and any payments made after June of last year will also be reimbursed.
Navient said the debt on the loan to be canceled would be among “certain qualified private education loans that originated largely between 2002 and 2010 and then defaulted and canceled,” according to its own statement Wednesday.
Those eligible for restitution payment will automatically receive a check from the Attorney General’s settlement administrator later this year.
Eligible federal loan borrowers are urged to update the contact information in their account online.
Additional information is available on the settlement website.
“Too many New Jerseyans have had trouble paying their student loans,” Bruck said in a written statement. “And too many of those borrowers have struggled because their student loan servicer put corporate profits above their best interests.”
More than 44 million people across the country have obtained student loans, as the average cost of tuition and expenses for a four-year college or university increased about eight times faster than the average salary, between 1986 and 2016.
Total student loan debt is now estimated at more than $ 1.75 trillion nationwide.
The average New Jersey borrower has a student debt of $ 35,730, according to the state attorney general’s office, among the highest in the country.
“With today’s settlement, we are holding one of the largest student loan servicers in the country accountable, and we are putting millions of dollars back into the pockets of our residents,” said Bruck.
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