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Some Idaho student loan borrowers to get debt relief under $4 million settlement

The Idaho Attorney General's Office on Friday announced a settlement with Navient over practices that resulted in additional debt, making repayment more difficult.

BOISE, Idaho — The State of Idaho and Navient, one of the nation's largest student loan servicers, have reached a settlement that will provide nearly $4 million in debt relief to eligible Idaho student loan borrowers, Attorney General Lawrence Wasden announced Friday.

The settlement has been filed in Fourth District Court in Ada County, and is pending court approval. It stems from concerns over Navient practices that resulted in students "often incurring substantial debts they were never likely to repay," Wasden said in a news release.

The Idaho Attorney General's Office said Navient's practices included steering borrowers struggling to make payments toward high-interest forbearances that added significant long-term debt. The settlement also addresses Navient's use of sub-prime private loans to students who attended for-profit colleges with low graduation rates.

Wasden said a total of $3,972,316 in student loan debt relief will go to more than 170 Idaho borrowers. The affected loans are private education loans originated largely between 2002 and 2010 that are in default.

Those receiving private loan debt relief under the settlement will receive written notice from Navient in the coming months, and do not need to take nay action to receive the benefit.

In addition to providing student loan debt relief, the settlement requires Navient to do the following:

  • 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.

For more information on eligibility for relief under the settlement, see this list of frequently asked questions. If you have a question not covered there call the Idaho Attorney General's Office Consumer Protection Division at 208-334-2424 or email that office at consumer_protection@ag.idaho.gov.

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