TOPEKA – (January 14, 2022) – More than 400 Kansans will receive nearly $10.3 million in student loan relief as part of a nationwide settlement with one of the country’s largest student loan servicers, Kansas Attorney General Derek Schmidt said today.
Schmidt said the $1.85 billion settlement between Navient and a coalition of 39 attorneys general, including the District of Columbia, resolves claims that since 2009, despite representing that it would help borrowers find the best repayment options, the company steered struggling student loan borrowers into costly, long-term forbearances instead of counseling them about the benefits of more affordable plans.
It was announced on Thursday Missouri would receive approximately $53 million in student loan relief.
“This settlement will provide financial relief to student loan borrowers who, through no fault of their own, were forced into loan plans that only exacerbated their financial struggles,” Schmidt said.
Navient also allegedly originated predatory subprime private loans to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of such borrowers would be unable to repay the loans. Navient allegedly made these risky subprime loans as “an inducement to get schools to use Navient as a preferred lender” for highly-profitable federal and “prime” private loans, without regard for borrowers and their families, many of whom were knowingly ensnared in debts they could never repay.0.