Student loan servicer Navient will cancel nearly $2 billion in subprime student loan debt to 66,000 borrowers nationwide to resolve allegations of unfair and deceptive lending practices.
The settlement was reached with 39 state attorneys general, including Hawaiʻi Attorney General Holly Shikada.
Nearly 200 Hawaiʻi borrowers will be cleared of $4.3 million in debt.
Navient will also pay restitution of about $260 each to federal loan borrowers.
In Hawaiʻi, nearly 1,400 borrowers will receive restitution payments, for a total of almost $370,000.
The attorneys general argued Navient steered struggling student loan borrowers into long-term forbearances instead of more affordable repayment plans.
The company also allegedly originated subprime private loans to students at for-profit schools and colleges with low graduation rates.
Those loans originated with Sallie Mae, which spun off its student loans department into Navient in 2014.
