Student borrowers who took out loans that were serviced by Navient, one of the largest student loan collection companies in the country, were cautiously celebrating Thursday’s announcement that tens of thousands of them would get their loans canceled under an agreement with more than three dozen states.
The total amount of debt to be canceled, as well as an accompanying restitution agreement, is major — a deal worth about $1.85 billion.
A bipartisan coalition of state attorneys general are calling the resolution “a victory for student loan borrowers” in holding Navient accountable, after suing the company for allegedly misleading borrowers with deceptive lending practices and offering risky subprime loans. For its part, Navient is denying it violated consumer protection laws or caused borrowers harm, insisting it is settling the agreement “to avoid the additional burden, expense, time and distraction to prevail in court.”
But for the average Navient customer hoping for immediate relief, they may be left disappointed, said Mike Pierce, executive director of the Student Borrower Protection Center, a consumer advocacy group.
“Yesterday was a very big deal for certain people that have really been forgotten in our national conversation in the student debt crisis,” Pierce said. “This will be life-changing for a specific group of those people. But for everyone else, the fight continues.”