One of the largest student loan servicers will disburse a total of $1.85 billion to student borrowers nationwide.
ST PAUL, Minn. – In 2008, Misha Brave did what many of us have done. She borrowed money from the student loan service, Navient.
“I was really going super blind,” Brave said. “I got a community college loan because I felt like it was my best option at the time… All the interest on that one ended up being closer to $10,000, which ‘they ended up getting to me via my tax returns. They just took my tax returns for a few years.’
Thirty-nine attorneys general announced a settlement with Navient totaling $1.7 billion in debt forgiveness and $95 million in restitution nationwide.
Attorney General Keith Ellison, who was one of 39 AGs involved, said the settlement, which includes about $14 million for Minnesota borrowers, is necessary because Navient deliberately misinformed the public.
“They were doing a lot of things to basically extend the length of the loan period and make you pay more by keeping you in the loan products and not offering or even telling you that there were ways for you to d ‘get loan forgiveness,’ he said.
Navient “expressly denies breaking any law”, but the company has agreed to cancel the balances of around 66,000 borrowers born between around 2002 and 2010 and said it would notify those affected.
To check for yourself, Ellison says to contact the attorney general’s office by phone at 651-296-3353.
“And it’s not just young people, either,” he said. “It’s the parents who co-signed. Sometimes it’s the grandparents…it’s an intergenerational problem.”
Student loan debt is greater than any other type of debt, including credit card debt, he says.
“Because of the high amount of student debt, young people are delaying forming a family, delaying marriage, you have young people who have doctorates and higher degrees who are still living in their parents’ basement”, Ellison said. “Of course, this crisis isn’t hitting everyone equally. Students of color and low-income white students are hit harder because they have to borrow more because their family income just isn’t there to support them. pay tuition.”
More than 4,000 Minnesota federal borrowers will be eligible for a small restitution payment. Another 432 Minnesota borrowers will receive debt forgiveness from their private loans.
Although Brave is unlikely to be eligible for this settlement money, she is considering the possibility of being reimbursed.
“Getting that money doesn’t mean as much as it would have meant at the time; how many opportunities it took away from me in general,” she said.