BATON ROUGE, La. (KLFY) – The nation’s largest student loan service, Navient, has agreed to a nearly $2 billion nationwide settlement, over allegations that the company took advantage of students.
“To say that this company tormented me is an understatement. Like many others across the country with the constant calls, with the misleading of information – pushing into forbearance which I knew wasn’t the right choice.”
Louisiana and 38 other states called out the company for allegedly deceiving students since 2009, by locking them into costly long term loans, instead of helping students find more affordable options.
“We want to make sure that those who go out there, and grant students loans, do so in an equitable and fair process,” said Louisiana Attorney General Jeff Landry. “That they go out there, and not take advantage of them. Take care of them, and understand students are using this money to further their education. Hopefully, they go out into the workforce. When they go out into the workforce, we don’t want the amount of debt to overcome the income from the jobs they get.”
It is also alleged that Navient pushed loans on students attending for-profit schools with low graduation rates, knowing that some students would not be able to repay.
“I think the lesson can be learned by financial institutions that extend student loans and finances to students, in that there are attorneys general around the country that will be watching and holding them accountable, for the way they conduct their business with their consumer students,” said Landry.
Navient has agreed to give Louisiana $3.6 million for 13,000 students who had loans with the company.
When you do the math, each will get a restitution payment of approximately $260. Nearly 1,200 borrowers in Louisiana will have more than $23 million in debt erased.
Navient borrowers in Louisiana, who are under the settlement, should receive notice by July that their loans have been cancelled. Also, the should look for a postcard in the mail by this spring, to get the restitution check for $260.