The price of a college education continues to be a stumbling block to many across the country. According to the Education Data Initiative, an estimated 43.2 million individuals are currently paying off loans with an average value of more than $39,000. Of that group, Black students and college graduates are hit especially hard, owing an average of $25,000 more on their loans than whites.
Fortunately, former students of all races with college debt got some good news recently. Following an ongoing lawsuit, Steve LeBlanc of The Associated Press reported that “Navient, a major student loan collecting company, [has] agreed to cancel $1.7 billion in debt owed by more than 66,000 borrowers across the U.S. and pay over $140 million in other penalties to settle allegations of abusive lending practices.”
The settlement is one of the largest ever in American history and involves deals negotiated in 39 different states across the country.
In a statement, Pennsylvania Attorney General Josh Shapiro, who worked on the case, said, Navient “engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back and placed an unfair burden on people trying to improve their lives through education.”
In addition to encouraging students to take out loans larger than they were capable of repaying, Navient is also accused of encouraging borrowers into what is known as long-term forbearances. Borrower payments paused temporarily but allowed the company to continue charging interest, increasing the amount borrowers ultimately owed exponentially.
Although Navient has denied it did anything wrong in its lending practices in the massive settlement, which still needs official approval by the court, the company has agreed to forgive tens of thousands of loans. The company will also repay more than $142 million to borrowers who had their loans placed in long-term forbearances.
In an interview with AP, Massachusetts Attorney General Maura Healey described the settlement against the company as “an important step toward addressing our broken student loan repayment system.”
Speaking with LeBlanc, Seattle’s Ashley Hardin said that the settlement will literally change her life. After spending more than a decade trying to pay off more than $100,000 in loans to Navient, she said, “It’s a massive weight lifted. I can breathe again and feel like I’m not drowning — like I’m not going to get a call tomorrow that they’re suing me for defaulting.”
Helena Moon agreed, telling LeBlanc that attending her “dream college,” Howard University, left her burdened with debt she still hasn’t been able to overcome.
“This is a step forward in racial equality when you think about the percentage of African Americans in debt in this country,” she said.
Individuals who are impacted by the settlement and will be having their loans forgiven or will be getting payments back from Navient will be notified in the coming weeks, LeBlanc reported.
States involved in the Navient settlement include Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia and Wisconsin.