HARRISBURG, Pa. (AP) – Tens of thousands of people who took out student loans over the past 20 years could see their loans canceled or receive a small check as part of a nationwide settlement with Navient, a major student loan collecting company, over allegations of abusive lending practices.
The agreement, if approved by a judge, cancels $1.7 billion in private loan debt owed by more than 66,000 borrowers across the U.S. and distributes a total of $95 million in restitution payments of about $260 each to approximately 350,000 federal loan borrowers.
Borrowers who will receive restitution or debt cancellation span all generations, officials say. They include students who went to colleges or universities right after high school and mid-career students who dropped out after enrolling.
The loans were taken out pri, officials say. Private loans often came with a variable, rather than fixed, interest rate and a shorter window than federal student loans to make payments before defaulting.
Many borrowers who were struggling to make payments were not told about a federal “income driven” program that could lower their payments. Others were not told about a federal program that forgives some debt for public-sector workers.
Borrowers who will see their private loan debt canceled will be notified by Navient by , along with a refund of payments they made on the loan after , according to state officials.
She chose the nursing program at Drexel University and, in 2006, took out a loan through Navient
Borrowers who are eligible for a restitution payment of approximately $260 will receive a postcard from the settlement administrator this spring, state officials say. Continua a leggere