Student loan provider Navient agrees to nearly $2B settlement

Navient agreed to pay nearly $2 billion to settle claims by 38 states and the District of Columbia it deceived thousands of borrows into costly, long-term, forbearance.

Navient, one of the nation's largest student loan servicers, agreed Thursday to pay nearly $2 billion to settle claims by 38 states and the District of Columbia it deceived thousands of borrows into costly, long-term, forbearance plans that caused students to pay more than they should have.

"They ran a multi-billion dollar scam," Pennsylvania Attorney General Josh Shapiro said during a news conference announcing the settlement agreement.

Navient, formerly known as Sally Mae, burdened struggling students with debt, the attorneys general said, by pushing them into subprime, private loans they knew most would be unable to repay.

"So many people are trapped in unaffordable student loan debt," Massachusetts Attorney General Maura Healey said. "These loans were doomed to fail from the start and Navient knew it."