ATLANTA, GA – Attorney General Chris Carr today announced that the State of Georgia has joined 38 states in reaching a $1.85 billion nationwide settlement with Navient, one of the nation’s largest student loan servicers.

“For years, Georgians who turned to Navient for help with repaying their student loans saw their debt worsen rather than improve due to the company’s deceptive practices,” said Carr. “By reaching this settlement, Georgia borrowers will receive much-needed relief totaling more than $118 million as they work to regain their financial footing. We are proud of this announcement and hope it serves as a reminder that we will pursue servicers that unfairly take advantage of those struggling with student loan debt."

This settlement resolves claims that since 2009, Navient steered struggling student loan borrowers into costly long-term forbearances instead of counseling them about the benefits of more affordable income-driven repayment plans. This, despite Navient representing that it would help borrowers find the best repayment options for them.

Carr filed the settlement on Jan. 13, 2022, as a proposed Consent Judgment in the Superior Court of Fulton County. The settlement will require court approval.

The attorneys general allege that:

  • The interest that accrued because of Navient’s forbearance steering practices was added to the borrowers’ loan balances, pushing borrowers further into debt. Had the company instead provided borrowers with the help it promised, borrowers could have benefited from income-driven repayment plans, interest subsidies, and/or help attaining forgiveness of any remaining balance after a proscribed number of years of qualifying payments; and
  • Navient originated predatory subprime private loans to students attending for-profit schools and colleges with low graduation rates, even though it knew that a very high percentage of such borrowers would be unable to repay the loans; and
  • Navient made these risky subprime loans as “an inducement to get schools to use Navient as a preferred lender” for highly-profitable federal and “prime” private loans.

The settlement requires Navient to:

  • Cancel the remaining balance on more than $1.7 billion in subprime private student loan balances owed by more than 66,000 borrowers nationwide; and
  • Pay $142.5 million to the attorneys general; and
  • Pay a total of $95 million in restitution payments to approximately 350,000 federal loan borrowers who were placed in certain types of long-term forbearances; and
  • Pay restitution to the States, including over $5.9 million for 22,468 Georgia federal loan borrowers; and
  • Cancel over $113 million in private loan debt owed by 4,268 Georgia borrowers; and
  • Implement conduct reforms that require Navient to:
    • Explain the benefits of income-driven repayment plans and to offer to estimate income-driven payment amounts before placing borrowers into optional forbearances; and
    • Train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness (PSLF) and related programs; and
    • Refrain from compensating customer service agents in a manner that incentivizes them to minimize time spent counseling borrowers; and
    • Notify borrowers about the U.S. Department of Education’s recently announced PSLF limited waiver opportunity, which temporarily offers millions of qualifying public service workers the chance to have previously non-qualifying repayment periods counted toward loan forgiveness— provided that they consolidate into the Direct Loan Program and file employment certifications by Oct. 31, 2022.

Borrowers receiving private loan debt cancellation under the settlement will receive a notice from Navient by July 2022, along with refunds of any payments made on the cancelled private loans after June 30, 2021. Federal loan borrowers who are eligible for a restitution payment of approximately $260 will receive a postcard in the mail from the settlement administrator later this spring.

Federal loan borrowers who qualify for relief under this settlement do not need to take any action except to update or create their account to ensure the U.S. Department of Education has their current address. For more information, visit

Along with Georgia, the settlement was joined by 38 attorneys general in Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia and Wisconsin.


Communications Director Kara Richardson