Schools
Washington Wins $45M In Student Loan Debt Lawsuit
Included in the winnings is $35 million in debt relief for 1,400 Washingtonians.
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OLYMPIA, WA — Washington has garnered a multimillion dollar victory over student loan servicer Navient, after a lawsuit determined Navient engaged in unfair and deceptive practices against student loan borrowers.
Washington Attorney General Bob Ferguson first filed suit against Navient Corp. in 2017. The suit alleged that Navient, the nation’s largest student-loan servicer, intentionally offered subprime, predatory loans to students attending for-profit colleges with low graduation rates, knowing that most of the students would not be able to pay back their loans long term.
As a result of the suit, Washington will receive $45 million from Navient, $35 million of which will go to help pay off student loan debt for hundreds of Washingtonians.
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“Higher education should not equal a lifelong debt sentence — and student loan corporations do not have the right to deceive Washingtonians in order to maximize their profits,” Ferguson said. “We are holding the country’s largest student loan servicer accountable, achieving hard-fought corporate reforms, and helping repair the damage they did to Washington borrowers. We will continue fighting to prevent the financial abuse of Washington students overburdened with debt.”
The $35 million will help more than 1,400 Washingtonians who took out student loans between 2002 and 2014, Ferguson's office said, averaging around $25,000 per borrower. Of the remaining money, $2.3 million will be used to repay 8,900 more Washington borrowers enrolled in forbearance between 2009 and 2017, and $7 million will go to the state to settle the cost of litigation and investigation.
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"Borrowers who will receive restitution or debt relief span all generations: Navient’s harmful conduct impacted everyone from students who enrolled in colleges and universities immediately after high school to mid-career students who dropped out after enrolling in a for-profit school in the early 2000s," the Attorney General's Office (AGO) said.
Washingtonians who are eligible for reimbursement or debt relief do not need to do anything to claim that relief, according to the AGO. Borrowers whose debt was cancelled should soon receive a notice from Naviant, plus refunds for any payments made on those loans since June 30, 2021. Those eligible for restitution should receive a postcard from the Attorney General’s settlement administrator sometime in the next few months.
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More information on the settlement, reimbursement and restitution can be found at www.NavientAGSettlement.com.
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