Attorney General John M. Formella announces that the Attorney General’s Office has reached an agreement with Navient Corporation and Navient Solutions, LLC (“Navient”), a student loan servicer, to provide $3,590,988.96 in debt cancellation for 129 New Hampshire student loan borrowers.
“This action provides important relief to New Hampshire student loan borrowers who were victims of Navient’s illegal and harmful practices,” said Attorney General Formella. “Our Consumer Protection and Antitrust Bureau works 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 case.”
The consent judgment being filed in Merrimack County Superior Court resolves several allegations that Navient violated the New Hampshire Consumer Protection Act, including allegations that Navient:
· Originated subprime student loans in New Hampshire that Navient expected, and which ultimately did default at high rates
· Made billing and payment systems difficult for borrowers and cosigners to control the application and allocation of their payments
· Placed some borrowers who were experiencing long-term financial distress or hardship into forbearances or offering forbearances to such borrowers without adequately exploring whether an alternative repayment plan, such as an income-driven repayment plan (“IDR”), would be more appropriate for their circumstances
· Failed to provide IDR renewal notifications that adequately advised borrowers of the subject matter 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.
Under the terms of the consent judgment, pending final approval by the court, Navient will:
- Continue to explain the benefits of income-driven repayment plans and offer to estimate income-driven payment amounts before placing borrowers into optional forbearances.
- Maintain customer service practices that support borrower success, such as processing payments quickly and accurately, making payment histories available to borrowers, directing extra payments to loans with the highest interest rates, and enabling borrowers to provide standing instructions in allocating extra payments.
- Train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness (PSLF) and related programs including notifying borrowers about the U.S. Department of Education’s recently announced PSLF limited waiver opportunity, which temporarily offers millions of qualifying public service workers the chance to have previously non-qualifying repayment periods counted toward loan forgiveness, under certain circumstances.
The loans that will be canceled were private education loans originated largely between 2002 and 2010 and later defaulted and charged off. Borrowers who qualify for this private loan debt cancellation will receive a notice from Navient in the next few months. Borrowers do not need to take any action themselves to receive this benefit.