$3.5 million in NH student loan debt canceled in settlement with Navient on behalf of 129 borrowers
CONCORD, NH – The state attorney general’s office announced May 16 that it has reached an agreement with attorney Navient Corporation and Navient Solutions, LLC (“Navient”), a student loan servicer, to provide $3,590,988 $.96 in debt forgiveness to 129 New Hampshire student borrowers.
“This action provides significant relief to New Hampshire student borrowers who have been victimized by Navient’s illegal and harmful practices,” Attorney General Formella said. “Our Consumer Protection and Antitrust Bureau is working diligently to protect New Hampshire consumers, and today’s settlement represents another important step in those efforts. I thank our Consumer Protection team for their efforts in this matter. . »
The consent judgment filed in Merrimack County Superior Court resolves several allegations that Navient violated New Hampshire consumer protection law, including allegations that Navient:
- Created subprime student loans in New Hampshire that Navient expected and eventually defaulted at high rates
- Made billing and payment systems difficult for borrowers and co-signers to control the application and allocation of their payments
- Placed some borrowers who were experiencing long-term financial hardship or difficulty in forbearance or offered forbearance to such borrowers without adequately exploring whether an alternative repayment plan, such as an income-based repayment plan ( “IDR”), would be more appropriate for their conditions
- Did not provide IDR renewal notifications that adequately informed borrowers of the purpose and urgency of the notifications
The consent judgment also contains injunctive terms that reflect the intent of the Attorney General’s Office and Navient to improve customer service for New Hampshire student loan borrowers.
Pursuant to the consent judgment, pending final court approval, Navient:
- Continue to explain the benefits of income-based repayment plans and offer to estimate income-based payment amounts before placing borrowers in optional forbearances.
- Maintain customer service practices that support borrower success, such as processing payments quickly and accurately, making payment histories available to borrowers, directing additional payments to loans at interest rates and the possibility for borrowers to provide standing instructions for the allocation of additional payments.
- Train specialists who will advise distressed borrowers on alternative repayment options and advise civil servants on the Civil Service Loan Forgiveness (PSLF) and related programs, including informing borrowers of the possibility of waiver limited PSLF recently announced by the US Department of Education, which temporarily offers millions of eligible. service workers the option of having previously ineligible repayment periods counted for loan forgiveness, under certain circumstances.
The loans that will be canceled were private education loans taken out largely between 2002 and 2010 that then defaulted and were written off. Borrowers eligible for this private loan debt cancellation will receive notice from Navient in the coming months. Borrowers do not have to take any action themselves to benefit from this advantage.