Thousands of student loan borrowers will get a few hundred dollars in the mail or see their loans forgiven under a settlement that Colorado’s attorney general reached with one of America’s largest student debt service providers.
Nearly 7,000 borrowers will get $260 in checks, which could start arriving this week. The settlement also wipes out the student debt of about 1,300 Coloradans, according to the Attorney General’s Office.
The restitution and loan forgiveness are part of a $1.85 billion settlement that a bipartisan coalition of 39 attorneys general secured with Naviant, which they accused of predatory loan services. Notably, the company steered students into expensive, long-term loans instead of offering income-driven repayment options, Attorney General Phil Weiser said in a statement.
“Navient’s predatory lending put many Coloradans in stressful financial situations and acted in ways that threatened long-term negative consequences,” Weiser said.
Naviant denied violating any laws.
“The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court,” Mark Heleen, Navient’s chief legal officer, said in a January statement.
Under the settlement, Colorado also will get $650,000 from Naviant, which will help fund efforts to protect student borrowers, Weiser’s office said.
Weiser said the checks should be cashed or deposited within 90 days.