$4.3 million in debt to be canceled for nearly 200 student borrowers in Hawaii | News, Sports, Jobs
A total of $4.3 million in debt will be erased for 196 student borrowers in Hawaii, and 1,380 others will receive restitution payments, as part of a settlement with Navient over allegations of unfair and deceptive lending practices, Hawaii Attorney General Holly Shikada announced on Tuesday.
The $1.85 billion settlement, joined by a coalition of 39 attorneys general, resolves claims that since 2009 the student loan service has steered struggling student borrowers into costly long-term forbearances instead of Advise them on the benefits of more affordable income-driven repayment plans. , despite the fact that it would help borrowers find the best repayment options for them, according to a press release from the State Department of the Attorney General.
“Student loan borrowers should have the option of receiving income-based repayment counseling,” Shikada said. “This settlement ensures that counseling will take place before student borrowers are forced to accept costly long-term forbearances, which can have disastrous financial and personal consequences.”
Navient also allegedly created predatory private loans at risk to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of these borrowers would be unable to repay the loans. according to the press release.
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. Additionally, Navient will pay $142.5 million to the attorneys general. A total of $95 million in restitution payments of about $260 each will be distributed to about 350,000 federal borrowers who have been placed in some type of long-term forbearance.
Under the settlement, Hawaii will receive a total of $367,867 in restitution payments for 1,380 federal borrowers.
Borrowers with private loan debt cancellation will receive notice from Navient by July, along with reimbursement of any payments made on private loans canceled after June 30, 2021. Federal borrowers eligible for restitution payment approximately $260 will receive a postcard in the mail from the Settlement Administrator later this spring.
Federal borrowers who are eligible for relief under the settlement do not need to take any action other than updating or creating their studentaid.gov account to ensure that the U.S. Department of education has their current address. For more information, visit NavientAGSettlement.com.