SPRINGFIELD, Ill. (WBBM NEWSRADIO) -- Thousands of Illinoisans will receive restitution payments or have their student loan debt canceled as a result of a settlement with a major loan servicer accused of making predatory student loans.
Illinois and Washington were the first two states that sued Navient in 2017.
Now, Illinois and 38 other states have agreed to a settlement with Navient for $1.85 billion in restitution and student loan debt cancellations. It breaks down to $1.7 billion in restitution and $95 million in student loan debt forgiveness.
Attorney General Kwame Raoul was one of five attorneys general on a Zoom news conference.
“Wherever the students attended, Navient’s private student loan program buried these students into debt by targeting those unlikely to be able to repay with high interest loans," Raoul said.
Raoul said Navient took advantage of people who later had financial troubles that made it difficult to buy a home, get married, or start a family.
“When they experienced issues with making repayments on their student loans, they should be able to turn to their servicers for accurate information, as well as trustworthy guidance. That was not the case here," he said.
Raoul said more than 18,000 Illinoisans will be eligible for restitution payments, while about 5,200 Illinoisans will have their student loan debt forgiven.
The Illinois Attorney General said that, “Instead of helping struggling borrowers get into repayment plans based on their income, Navient chose to steer people into forbearances or provided inaccurate information about important benefits, as [Washington State Attorney General Bob Ferguson] mentioned, like public service forgiveness programs.”
Raoul said Navient steered people unknowingly to even higher interest rate payments Navient knew the people would be unlikely to afford.
In a response to WBBM Newsradio, Navient noted: “The agreements include an express denial of the claims and any borrower harm by the company.”
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