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Sallie Mae Lawsuit – Implications For Students Affected by Sallie Mae’s Predatory Lending Practices

In April, Navient, the parent company of Sallie Mae, agreed to erase $1.7 billion in private student debt. This settlement comes after Navient steered struggling students into costly forbearances. This article will examine the implications of the settlement for the Students affected by Sallie Mae’s predatory lending practices. Also, learn how students can qualify for the settlement. Numerous other settlements are pending.

Navient will erase $1.7 billion of subprime private student loan debt

The U.S. District Court recently approved a settlement between Navient and the states to wipe out the debt of roughly three million borrowers. The settlement resolves allegations that Navient inflated borrowers’ bills and steered borrowers into costly long-term forbearance plans. Approximately $350,000 borrowers are eligible for the settlement. The settlement calls for $260 payments per person.

The agreement comes after the federal consumer bureau sued Navient during the Obama administration and the Trump administration. The lawsuit was filed months before the inauguration, but it lasted well into the Trump administration. Last year, Navient decided to exit the federal student loan business, terminating its contract with the Education Department and transferring the accounts to its new vendor, Maximus. This company will give the affected borrowers $260 in settlement money, which will be used to repay their loans.

Navient steered struggling student loan borrowers into costly forbearances

Navient allegedly steered struggling student loan borrowers into expensive forbearances, which added interest to their loan balances. The company’s illegal steering practices left borrowers worse off than when they started, adding a significant amount of money to their debt. The company was accused of originating predatory subprime private student loans to for-profit colleges with low graduation rates.

In a recent settlement, the nation’s largest student loan lender and servicer, Navient, agreed to settle claims that it steered students into expensive forbearances. The settlement will erase $1.7 billion in private student loan debt for 66,000 borrowers and pay restitution to 350,000 federal loan borrowers. The company said the settlement was necessary because it would have been a burden for Navient if a lawsuit were to go to trial.

Students harmed by Sallie Mae’s predatory lending practices

The federal student loan program is an essential lifeline for many colleges. Sallie Mae’s predatory lending practices pushed some schools to issue private loans, causing students to struggle with payments even after graduation. The company has agreed to cancel nearly $1.7 billion in debt for borrowers affected by these practices. In December 2015, Career Education, which owns the Le Cordon Bleu chain in the U.S., announced that it planned to close some campuses.

The Consumer Financial Protection Bureau is investigating Navient, the former Sallie Mae subsidiary. It has been accused of charging unfair fees, misinforming students to obtain pricier repayment terms, and misleading them about federal loan forgiveness programs. The settlement, which will cover up to three million borrowers, could result in new regulations for Sallie Mae’s loan practices. The company has agreed to settle the lawsuits.

Students eligible for settlement

All 920 claimants will get federal student loan cancellations. Of the remaining $23.6 million in settlement funds, $12.3 million will be used to pay off borrowers’ other sources of funding. However, the settlement will not cover loans made after the eligibility period, so if you have taken out a federal student loan, you can also take advantage of the student loan forgiveness program offered by the Education Department.

There are still other student loan borrowers who may be eligible for debt relief from the Sallie Mae lawsuit of 2016. These include students who took out student loans to attend for-profit colleges. For example, the ITT Technical Institute permanently closed its doors after declaring bankruptcy in 2016, but some campuses are still active. The Art Institute of Chicago and DeVry University are both on the list of for-profit colleges with potentially eligible borrowers.

Contact information for impacted borrowers

The Sallie Mae lawsuit is filed in Illinois and could affect the loan debts of thousands of Washington residents. The settlement addresses unfair servicing practices and abuses related to the originating and servicing of predatory student loans. There is no need for impacted borrowers to take any action to be eligible for the settlement. The $1.7 billion that Navient will be canceling from student loan debts will go to the borrowers that received subprime loans from Sallie Mae and its predecessor, Navient.

If you are one of the impacted borrowers by the Sallie Mae lawsuit, you can contact the company and submit your documentation. Simply click on the Miscellaneous section and choose the file that you want to attach. Then click on the Submit Documents option. Alternatively, you can mail the documentation to Sallie Mae. Contact information for impacted borrowers in the Sallie Mae lawsuit 2016

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