Navient reaches a deal to cancel $3.5 million in NH student loan debts

Paul Feely, The New Hampshire Union Leader, Manchester
·2 min read

May 16—Navient, a major student loan collecting company, agreed to cancel $3.5 million in debt owed by 129 student loan borrowers in New Hampshire to settle allegations of abusive lending practices, the Attorney General's Office announced Monday.

The $3,590,988.96 in loans that will be canceled were private education loans predominantly issued between 2002 and 2010 that later defaulted and charged off.

Borrowers who qualify for the 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," the Attorney General's Office said in a statement.

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:

—Offered 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 Income-Driven Repayment renewal notifications that adequately warned borrowers of the subject matter and urgency of the notifications.

"This action provides important relief to New Hampshire student loan borrowers who were victims of Navient's illegal and harmful practices," said Attorney General John Formella in a statement. "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 also contains language reflecting the intent of the Attorney General's Office and Navient to improve customer service for student loan borrowers in New Hampshire.