Navient reaches a deal to cancel $1.7 billion in student loan debts

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Navient reaches a deal to cancel $1.7 billion in student loan debts

The loan servicing giant Navient has agreed to cancel $1.7 billion in student loan debts owed by roughly 66,000 borrowers, as part of a settlement announced Thursday with 39 state attorneys general.

The settlement ends a years-long legal fight with states in which Navient faced two serious allegations. First, the company was accused of steering¹ student borrowers into expensive forbearances instead of more flexible, income-driven repayment² plans.

The reason for this steering, says Persis Yu, managing counsel at the Student Borrower Protection Center, is that enrolling³ a borrower into an income-driven repayment plan takes considerable effort on the part of a loan servicer.

"There is paperwork that must go back and forth⁴. It's just more work for the servicer. It's very easy for the servicer to put a borrower into a forbearance, and there is evidence that the call center workers were incentivized to get through these calls as quickly as they possibly could," Yu says. "And that meant getting people into quick, easy options — not necessarily the best option for the borrower."

A 2019 audit⁵ by the U.S. Department of Education's Office of Inspector⁶ General corroborated⁷ this allegation, finding Navient phone counselors⁸ repeatedly recommending forbearance to borrowers without mentioning other, more flexible repayment options.

As part of the settlement, Navient agreed to pay $95 million for states to offer affected⁹ borrowers some reimbursement¹⁰ — roughly $260 each to 350,000 borrowers.

The company also faced allegations that its predecessor¹¹, Sallie Mae, had made subprime private loans to vulnerable borrowers who it knew were likely to default.

States alleged¹² that these private loans were made in cooperation with some for-profit colleges, many with incredibly low graduation rates, as a way of enticing¹³ these schools to rely on the company for other student loans as well.

In order to qualify for the federal government's student loan program — a vital lifeline for colleges and universities — schools must show that at least some of their revenue is coming from other sources, including private student loans, says Eileen Connor, director of the Project on Predatory Student Lending.

Connor says Sallie Mae would issue risky¹⁴, high-interest private loans to some of a school's borrowers with the understanding that the school would then recommend students use Sallie Mae for their federal student loans. In many cases, the schools also promised to repay Sallie Mae if students defaulted.

"Even if they maybe did take a little bit of a loss" on those risky private loans, Connor says, "it was worth it to [Sallie Mae/Navient] because it allowed them to be the preferred lenders on the federal loans for these schools. And so that meant that they would have this really large volume of guaranteed loans also. But this time the guarantee was coming from the government, so it's like they were covered. Either way, the people who were really screwed were the students."

For these affected students, Navient agreed to cancel $1.7 billion in current debts.

"Navient repeatedly and deliberately¹⁵ put profits ahead of its borrowers," said Pennsylvania State Attorney General Josh Shapiro, a leading voice behind the legal fight.

The Department of Education welcomed the settlement.

"We are pleased to see the outcome of this case and look forward to continuing our work with state and federal regulators to create higher standards for servicers and address servicing practices that hurt borrowers," Fabiola Rodriguez, the department's deputy press secretary, said a statement.

In a statement, though, Navient said this settlement should not be taken as an admission of guilt¹⁶.

"The company's decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction¹⁷ to prevail in court," said Navient Chief Legal Officer Mark Heleen in a statement. "Navient is and has been continually focused on helping¹⁸ student loan borrowers understand and select the right payment options to fit their needs."

In September, Navient announced that it would be exiting the federal student loan program and handing off its portfolio¹⁹ to a new servicer.

1 steering   

n.操舵装置

参考例句：

• He beat his hands on the steering wheel in frustration. 他沮丧地用手打了几下方向盘。
• Steering according to the wind, he also framed his words more amicably. 他真会看风使舵，口吻也马上变得温和了。

2 repayment   

n.偿还，偿还款；报酬

参考例句：

• I am entitled to a repayment for the damaged goods.我有权利索取货物损坏赔偿金。
• The tax authorities have been harrying her for repayment.税务局一直在催她补交税款。

3 enrolling   

v.招收( enrol的现在分词 )；吸收；入学；加入；[亦作enrol]( enroll的现在分词 )；登记，招收，使入伍（或入会、入学等），参加，成为成员；记入名册；卷起，包起

参考例句：

• They lashed out at the university enrolling system. 他们猛烈抨击大学的招生制度。 来自辞典例句
• You're enrolling in a country club, Billy. 你是注册加入乡村俱乐部了，比利。 来自辞典例句

4 forth   

adv.向前；向外，往外

参考例句：

• The wind moved the trees gently back and forth.风吹得树轻轻地来回摇晃。
• He gave forth a series of works in rapid succession.他很快连续发表了一系列的作品。

5 audit   

v.审计；查帐；核对；旁听

参考例句：

• Each year they audit our accounts and certify them as being true and fair.他们每年对我们进行账务审核，以确保其真实无误。
• As usual,the yearly audit will take place in December.跟往常一样，年度审计将在十二月份进行。

6 inspector   

n.检查员，监察员，视察员

参考例句：

• The inspector was interested in everything pertaining to the school.视察员对有关学校的一切都感兴趣。
• The inspector was shining a flashlight onto the tickets.查票员打着手电筒查看车票。

7 corroborated   

v.证实，支持（某种说法、信仰、理论等）( corroborate的过去式 )

参考例句：

• The evidence was corroborated by two independent witnesses. 此证据由两名独立证人提供。
• Experiments have corroborated her predictions. 实验证实了她的预言。 来自《简明英汉词典》

8 counselors   

n.顾问( counselor的名词复数 )；律师；（使馆等的）参赞；（协助学生解决问题的）指导老师

参考例句：

• Counselors began an inquiry into industrial needs. 顾问们开始调查工业方面的需要。 来自《现代英汉综合大词典》
• We have experienced counselors available day and night. ) 这里有经验的法律顾问全天候值班。） 来自超越目标英语 第4册

9 affected   

adj.不自然的，假装的

参考例句：

• She showed an affected interest in our subject.她假装对我们的课题感到兴趣。
• His manners are affected.他的态度不自然。

10 reimbursement   

n.偿还，退还

参考例句：

• He received reimbursement for his travel expenses.由于出差的花费他可以得到公司的补偿。
• Which forms do I need to complete for my travel reimbursement?我需要填什么表来报我的旅费？

11 predecessor   

n.前辈，前任

参考例句：

• It will share the fate of its predecessor.它将遭受与前者同样的命运。
• The new ambassador is more mature than his predecessor.新大使比他的前任更成熟一些。

12 alleged   

a.被指控的，嫌疑的

参考例句：

• It was alleged that he had taken bribes while in office. 他被指称在任时收受贿赂。
• alleged irregularities in the election campaign 被指称竞选运动中的不正当行为

13 enticing   

adj.迷人的；诱人的

参考例句：

• The offer was too enticing to refuse. 这提议太有诱惑力，使人难以拒绝。
• Her neck was short but rounded and her arms plump and enticing. 她的脖子短，但浑圆可爱；两臂丰腴，也很动人。

14 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

15 deliberately   

adv.审慎地；蓄意地；故意地

参考例句：

• The girl gave the show away deliberately.女孩故意泄露秘密。
• They deliberately shifted off the argument.他们故意回避这个论点。

16 guilt   

n.犯罪；内疚；过失，罪责

参考例句：

• She tried to cover up her guilt by lying.她企图用谎言掩饰自己的罪行。
• Don't lay a guilt trip on your child about schoolwork.别因为功课责备孩子而使他觉得很内疚。

17 distraction   

n.精神涣散，精神不集中，消遣，娱乐

参考例句：

• Total concentration is required with no distractions.要全神贯注，不能有丝毫分神。
• Their national distraction is going to the disco.他们的全民消遣就是去蹦迪。

18 helping   

n.食物的一份&adj.帮助人的，辅助的

参考例句：

• The poor children regularly pony up for a second helping of my hamburger. 那些可怜的孩子们总是要求我把我的汉堡包再给他们一份。
• By doing this, they may at times be helping to restore competition. 这样一来, 他在某些时候,有助于竞争的加强。

19 portfolio   

n.公事包；文件夹；大臣及部长职位

参考例句：

• He remembered her because she was carrying a large portfolio.他因为她带着一个大公文包而记住了她。
• He resigned his portfolio.他辞去了大臣职务。