More than 400 Kansans will receive nearly $10.3 million in student loan relief as part of a nationwide settlement with one of the country’s largest student loan servicers.

The $1.85 billion settlement between Navient and 39 attorneys general, resolves claims that the company steered student loan borrowers into costly, long-term forbearances instead of counseling them about the benefits of more affordable plans, despite representing that it would help borrowers find the best repayment options.

Navient also allegedly 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. Navient allegedly 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, without regard for borrowers and their families, many of whom were knowingly ensnared in debts they could never repay.

Under the terms of the settlement, Navient will cancel the remaining balance on more than $1.6 billion in subprime private student loan balances owed by approximately 62,000 borrowers nationwide. In Kansas, 435 borrowers will see $10.282 million in loan balances canceled.

Navient was created in 2014 when the company SLM Corporation (known as Sallie Mae) separated its loan servicing from its consumer banking business. After the separation, the company’s loan servicing and collection operations were re-branded as Navient, and the consumer banking business continued under the Sallie Mae brand.

The settlement includes 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. Additionally, Navient must 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. The conduct reforms imposed by the settlement include prohibitions on compensating customer service agents in a manner that incentivizes them to minimize time spent counseling borrowers.

For more information and a list of frequently asked questions, visit www.NavientAGSettlement.com.

Consumers should report student loan debt relief schemes to the attorney general’s office at www.InYourCornerKansas.org or by calling (800) 432-2310.