$9.8M in student loan cancellation coming for some NM borrowers
SANTA FE, N.M. — Some New Mexicans will soon be getting student loan relief after a $1.8 billion settlement was reached between major student loan collecting company Navient and 39 state attorneys general.
New Mexico Attorney General Hector Balderas announced the state will receive a total of $381,995 in restitution payments for more than 1,400 federal loan borrowers. New Mexico borrowers will also receive a total of $9,803,555 in private loan debt cancellation.
The lawsuit accused Navient of widespread, deceptive student loan servicing practices and predatory student loans abuses. The lawsuit alleged the company steered struggling student loan borrowers into costly long-term payment forbearances instead of counseling them about more affordable income-driven repayment plans.
“New Mexicans seeking the American Dream through higher education have been trapped in a cycle of debt and fallen prey to unfair practices for far too long,” AG Balderas said in a statement. “I will continue to crack down on predatory student loan companies and fight for increased borrower protections.”
Borrowers receiving private loan debt collection will receive a notice from Navient by July 2022. Refunds of any payments made on the canceled private loans after June 30, 2021, will also be issued by July.
Borrowers who are eligible for a restitution payment of approximately $260 will also receive a postcard in the mail later this spring.
AG Balderas filed the settlement Thursday in the First Judicial District Court. The settlement will require court approval. For more information, visit this website.