“Student loan borrowers who thought college would be a path to success instead found themselves on the road to financial ruin as a result of Navient’s unlawful conduct,” said Sean P. Moreover, the findings show that borrowers who received Pell Grants-most of whom have family incomes below $40,000-were five times as likely to default within 12 years borrowers whose parents did not attend college were more than twice as likely to default than borrowers whose parents did attend college and borrowers who began their education at for-profit colleges defaulted at seven times the rate of those who attended public colleges. In 2019, the New York Federal Reserve found that borrowers in Black-majority zip codes are more likely to borrow to fund their education, have higher average loan balances, and fall into default at almost double the rate of white-majority zip code borrowers. Statistics show that certain groups of borrowers are particularly at risk. Total student loan debt is now more than $1.75 trillion nationwide, and the average New Jersey borrower carries $35,730 in student debt, among the highest in the country, according to some sources. ![]() Faced with the soaring cost of higher education, over 44 million people in the United States have taken out student loans. “And too many of those borrowers have had a harder time because their student loan servicer put corporate profits above their best interests. With today’s settlement, we are holding one of the country’s largest student loan servicers accountable, and we are putting millions of dollars back in our residents’ pockets.”įrom 1989 to 2016, the average cost of obtaining a degree from a four-year college or university in the United States rose about eight times as fast as the average wage. “Too many New Jerseyans have struggled to pay off their student loans,” said Acting Attorney General Bruck. In addition to managing borrowers’ accounts and processing their monthly payments, student loan servicers are responsible for assisting financially struggling borrowers to enroll in alternative repayment plans or request a modification of loan terms from lenders. Student loan servicers are a critical link between borrowers and lenders. Navient, formerly known as Sallie Mae, was one of the nation’s largest servicers of both federal and private student loans, until partially exiting the business in September 2021. The total value of the nationwide settlement is approximately $1.85 billion. New Jersey’s settlement is part of a nationwide settlement of claims by 38 States and the District of Columbia alleging widespread abuses in Navient’s student loan origination and servicing business. The Navient settlement includes approximately $57.2 million in debt relief and $3.1 million in restitution payments to New Jersey borrowers, as well as a $3 million payment to the State. The State’s lawsuit alleged that Navient engaged in unconscionable commercial practices, deceptive conduct, and misrepresentations when servicing thousands of New Jersey consumers’ student loans over the past decade – boosting company profits at the expense of struggling borrowers. and its subsidiary Navient Solutions LLC (Navient) that resolves a 2020 lawsuit filed by the State against the student loan servicing giant. ![]() Bruck and the Division of Consumer Affairs today announced that New Jersey student loan borrowers will receive over $60 million in relief from a settlement with Navient Corp. ![]() Newark – Acting Attorney General Andrew J.
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