Mississippi Attorney General Lynn Fitch announced that the state has entered a settlement with Navient, known as one of the nation’s largest student loan servicers, to resolve allegations of unfair and deceptive student loan servicing practices. The settlement will require court approval.
“Student loan debt can be a very real obstacle to achieving financial security, especially for young people just coming out of school,” said Attorney General Lynn Fitch. “As a result of this settlement, Navient will be making much-needed improvements to the way it works with its customers to help them understand the options available to them and help them find the best option when they are facing serious challenges with loan repayment.”
Relief terms in this settlement include improved notification of options available to borrowers, as well as training for loan specialists on how to advise distressed borrowers about alternative repayment options and how to counsel eligible borrowers about Public Service Loan Forgiveness (PSLF). Terms also prohibit compensating customer service agents in a way that incentivizes them to minimize the time they spend counseling borrowers.
Navient will forgive $8,229,788 in private debt for Mississippi borrowers and will provide $1,747,850.40 for restitution payments to Mississippi borrowers who were placed in certain types of long-term forbearances.
Additional information on the restitution payments will be available in the coming months; but federal loan borrowers who may qualify for this relief do not need to take any action at this time other than to update or create their www.studentaid.gov account to ensure that the U.S. Department of Education has their current address.
Separately, Thursday, a coalition of 39 state Attorneys General announced their settlement of similar claims with Navient.
FAQs available here may help answer questions for borrowers.