Forty state attorneys general sued Navient Corporation for deceptive lending practices in its student loan business. Navient settled the lawsuits last week for $1.85 billion.
The loan giant admitted no wrongdoing, saying the claims against it were “unfounded.”
The participating states will split $145 million, and Navient will forgive 66,000 private student loans. In addition, Navient will pay $260 apiece to 350,000 federal student borrowers whose loans were serviced by Navient.
Did this settlement bring Navient to its knees? No, it did not.
Almost exactly one year ago, Navient stock was worth about eleven dollars. What’s it worth today? Twenty-one bucks.
During the past year, Navient sold its federal student-loan servicing business to an outfit called Maximus Education which will service the loans as Aidvantage. The parent company Maximus already had its tentacles in the healthcare industry. Then it settled lawsuits for deceptive lending, which cost it $1.85 billion.
But Navient will stay in the private student-loan business, which must be profitable. After all, Navient’s stock price nearly doubled within the last year.
If you were one of the 350,000 student borrowers who will be getting a $260 check, lucky you! You’ll be able to pay your light bill next month.