News Briefs

Student loan lawsuit settlement delivers $10.28 million in debt relief to Kansans

By: - January 13, 2022 12:29 pm
Attorney General Derek Schmidt, right, said the 39-state settlement of a predatory college loan lawsuit would provide $10.28 million in debt relief to 435 students in Kansas. It's part of a $1.85 billion settlement deal with Navient. (Sherman Smith/Kansas Reflector)

Attorney General Derek Schmidt, right, said the 39-state settlement of a predatory college loan lawsuit would provide $10.28 million in debt relief to 435 students in Kansas. It’s part of a $1.85 billion settlement deal with Navient. (Sherman Smith/Kansas Reflector)

TOPEKA — The nationwide settlement of a predatory student loan lawsuit resulted in waiving $10.28 million in debt owed by 435 Kansas students, officials said Thursday.

Attorney General Derek Schmidt filed a consent judgment in Shawnee County District Court reflecting outcome of the 39-state settlement with Navient. The company, one of the largest student loan companies in the United States, agreed with a coalition of state attorneys general to a $1.85 billion settlement beneficial to more than 60,000 borrowers nationwide.

In the case, plaintiffs alleged Navient promised to help students find a low-cost repayment option tied to income, but instead moved students struggling with loan debt to more expensive repayment plans. The company originated predatory subprime loans to students attending for-profit schools and colleges.

“This settlement will provide financial relief to Kansas student loan borrowers who, through no fault of their own, were forced into loan plans that only exacerbated their financial struggles,” Schmidt said.

Navient was created in 2014 when Sallie Mae separated its loan servicing business from its consumer banking business. The loan servicing and collection operations were rebranded as Navient.

Individual college loan borrowers receiving debt cancellation should receive a notice from Navient and information about refunds for payments made on cancelled private loans after June 30, 2021. For more information, visit www.NavientAGSettlement.com.

Since 2019, the attorney general’s office in Kansas secured settlements providing $5 million in debt relief to students of the former ITT Tech, a bankrupt for-profit college that had campuses in Kansas City and Wichita.

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Tim Carpenter
Tim Carpenter

Tim Carpenter has reported on Kansas for 35 years. He covered the Capitol for 16 years at the Topeka Capital-Journal and previously worked for the Lawrence Journal-World and United Press International. He has been recognized for investigative reporting on Kansas government and politics. He won the Kansas Press Association's Victor Murdock Award six times. The William Allen White Foundation honored him four times with its Burton Marvin News Enterprise Award. The Kansas City Press Club twice presented him its Journalist of the Year Award and more recently its Lifetime Achievement Award. He earned an agriculture degree at Kansas State University and grew up on a small dairy and beef cattle farm in Missouri. He is an amateur woodworker and drives Studebaker cars.

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