BOSTON — Navient, a major student loan servicing company, has settled allegations of abusive lending practices for $1.85 billion.
The settlement was announced Thursday and could cancel student loans of tens of thousands of borrowers.
The settlement includes $1.7 billion in debt cancellation and $95 million in restitution and involves 39 state attorneys general.
Pennsylvania Attorney General Josh Shapiro says the settlement would resolve claims that Navient led student borrowers into long-term forbearances instead of giving them advice on less costly repayment plans.
Navient says it did not act illegally and it did not admit fault in the settlement.
Maine Attorney General Aaron M. Frey wrote in a news release, "As part of the settlement, Maine will receive a total of $308,422 in restitution payments for more than 1,157 federal loan borrowers. Additionally, Maine borrowers will receive a total of $4,896,415 million in private loan debt cancellation."
Read the full release below.