Illinois Attorney General Kwame Raoul joined a group of attorneys general from around the country yesterday to announce a nationwide settlement with one of the largest student lenders in the country.
Raoul says that Navient has agreed to pay out $1.85 billion over allegations that the company, previously operating as Sallie Mae, steered student borrowers towards predatory loans to pay for tuition at for-profit colleges: “Wherever the students attended, Navient’s private student loan program buried these students into debt by targeting those unlikely to be able to repay with high-interest loans. High-interest, private loans like these are an ongoing problem. As part of our investigation and litigation, we uncovered and alleged that Navient operating as Sallie Mae, made private predatory loans to students attending for-profit colleges, students whom Navient knew would not be able to repay [the loans].”
The payouts and debt relief will resolve years-old lawsuits filed by attorneys general from nearly 40 states. Illinois was one of the first states to sue the student lender in 2017 while still under the direction of Attorney General Lisa Madigan.
Illinois’ share is over $145 million, with more than 18,000 borrowers set to receive payouts of about $260 each. A postcard notification will be sent to those eligible this Spring. Another 5,000-plus borrowers in the state will have their debt cancelled.
According to the Chicago Sun-Times, Navient did not admit to any wrongdoing as part of the settlement. The settlement will still have to be approved by a federal judge in Pennsylvania. Borrowers can learn more about the Navient settlement at https://navientagsettlement.com/.