BALTIMORE (WJZ) — Thousands of Marylanders with student loans will receive financial relief under a multi-state, $1.85 billion settlement with student loan provider Navient, Maryland Attorney General Brian Frosh said Thursday.

Maryland is one of 39 states to sue Navient, alleging that, since 2009, the company and its subsidiaries violated the Consumer Protection Act by steering borrowers to expensive forbearances instead of income-driven repayment plans.

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Under the terms of the settlement, 66,000 Americans who took out subprime private student loans will have their collective balance of $1.7 billion canceled. Another 350,000 students who borrowed federal loans will receive $95 million in restitution payments, or about $260 per person, the multi-state coalition said Thursday.

More than 1,100 Marylanders will be relieved of $34 million in student loan debt and 11,836 residents will receive restitution checks totaling more than $3.1 million, Frosh’s office said.

“We alleged that Navient’s conduct was illegal and burdened struggling Marylanders with additional student debt,” said Frosh. “I am pleased that thousands of Marylanders will receive a significant amount of relief under this settlement.”

An injunction requires Navient to tell borrowers about the benefits of income-based repayment plans. The company must also tell borrowers about the U.S. Department of Education’s Public Service Loan Forgiveness program under the settlement.

Borrowers with private loans whose debt is being canceled will receive a notice from Navient by July 2022, along with refunds of any payments made on those loans after June 30, 2021, the multi-state coalition said.

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Federal loan borrowers who qualify for relief only have to update or create a account and make sure their address is current, the coalition said. They will receive a postcard in the mail from the settlement administrator in the spring.

More information is available at

Frosh’s office has also published a Frequently Asked Questions document about the settlement, and borrowers can call the Attorney General’s Consumer Protection Division at 410-528-8662.

Navient said it did not act illegally, and it did not admit any fault in the settlement.

“Navient is and has been continually focused on helping student loan borrowers understand and select the right payment options to fit their needs. In fact, we’ve driven up income-driven repayment plan enrollment and driven down default rates, and every year, hundreds of thousands of borrowers we support successfully pay off their student loans,” said Navient Chief Legal Officer Mark Heleen in a statement.

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The Associated Press contributed to this report.

Brandon Weigel