$60M In 'Predatory' Navient Student Loan Debt Canceled In NJ: AG

NEWARK, NJ — Student loan borrowers in New Jersey will share more than $60 million in relief from a federal settlement with a loan servicing company.

The settlement with Navient includes $57.2 million in debt relief and $3.1 million in restitution for borrowers, as well as a $3 million payment to the state. Andrew J. Bruck, Acting Attorney General for the state of New Jersey announced the settlement Thursday.

The state filed a lawsuit in 2020 seeking damages for predatory and irresponsible lending practices.

This is a nationwide settlement, with 38 states and the District of Columbia filing claims against Navient. The company will have to pay about $1.85 billion in total and will cancel about 60,000 borrowers' subprime private student loans.

“Too many New Jerseyans have struggled to pay off their student loans,” said Acting Attorney General Bruck in a news release. “And too many of those borrowers have had a harder time because their student loan servicer put corporate profits above their best interests. With today’s settlement, we are holding one of the country’s largest student loan servicers accountable, and we are putting millions of dollars back in our residents’ pockets.”

Consumers do not need to take any action to receive the benefits required under the settlement. Consumers receiving private loan debt cancellation will receive a notice from Navient, and they will receive refunds of any payments made after June 30, 2021.

Consumers who are eligible for a restitution payment will automatically receive a restitution check of approximately $260 from the Attorney General’s settlement administrator in mid-2022.

To ensure the settlement administrator can find you, federal loan borrowers who may be eligible for a restitution payment are encouraged to update their contact information in their studentaid.gov account or create an account if they do not already have one. For additional information, please visit the settlement website at www.NavientAGSettlement.com.