It’s part of a $1.7 billion settlement from a lawsuit against lender Navvent led by state attorney general Bob Ferguson.
SEATTLE – The student loan debt of about 1,400 Washington residents will be erased, such as Part of a $1.7 billion settlement from a lawsuit led by Attorney General Bob Ferguson.
Ferguson started legal action against student loan lender Navent years ago and 38 other countries eventually joined the lawsuit.
About $35 million is coming to borrowers in Washington. On average, they will each receive $25,000 in debt relief.
Ferguson said, among other things, Navent has pushed people into plans that put interest above concern.
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“When cash-strapped long-term borrowers reach out to Navient for help, Navient deceives them. (They) promised to help them as they dealt with these long-term loans that spanned over many years, but when the students stopped making the payments, Ferguson said: This interest has accrued.”
He explained that the accrued interest was added to the principal of the loan, and then they would have to pay interest on this new total, thus going deeper into debt as a result.
“There were alternatives. Instead, Navient took the easy route.”
RELATED: No, Navient Settlement Doesn’t Cancel Loans for Federal Student Borrowers
Ashley Harden, a chef and food truck owner in the Seattle area, was one of the people who got scammed. She said “relief and justice” were the two words that came to mind when she learned about the settlement. She hopes the legal victory will transform the $1.7 trillion student loan industry.
“I’m sure Navient is not the only lender doing this,” she told KING5. “I hope this not only changes their practice, but also opens up another (way) for others to look at them more comprehensively and make sure that they are straight and narrow, taking care of students the way they should be.”
In a statement, Navient “expressly denies violating any law, including consumer protection laws, or causing harm to a borrower.”
If you were one of the people who took out a loan through Navient between 2002 and 2014 – you don’t have to do anything. The company will notify you, and if you have made any payments since July 2021, you will be compensated.
According to the Consumer Financial Protection Bureau, student loans in the United States total $1.7 trillion. If this were a national budget, it would be the fifth largest in the world, after the United States, China, Japan and Germany.