ATLANTA (WTXL) — Georgia attorney general Chris Carr announced Friday that the state of Georgia has joined 38 states in reaching a $1.85 billion nationwide settlement with Navient, one of the nation’s largest student loan servicers.
According to a press release by the Georgia attorney general’s office, the settlement resolves claims that since 2009, Navient steered struggling student loan borrowers into costly long-term forbearances instead of counseling them about the benefits of more affordable income-driven repayment plans. This, despite Navient representing that it would help borrowers find the best repayment options for them.
Terms of the settlement include canceling the remaining balance of $1.7 billion in subprime private loans balances owed by 66,000 borrowers nationwide.
Georgia will receive part of $142.5 million requested by attorney generals in the lawsuit. A total of $95 million in restitution was allocated to 350,000 federal loan borrowers who were placed in certain types of long-term forbearances.
Georgia is set to receive more than $5.9 million in restitution for 22,468 borrowers. The settlement requires the cancellation of $113 million in private student loan debt owed by 4,268 Georgia borrowers.
As part of the settlement, Navient agreed to numerous reforms.