College grads at Chemeketa Community College in Salem. More than 5,000 Oregon student loan borrowers will receive part of a $1.85 billion settlement brought by 39 states attorney generals against the deceptive loan servicer Navient. (Rachel Alexander/Salem Reporter)

More than 5,000 Oregonians whose student loans were managed by Navient, one of the nation’s largest loan servicing companies, will receive part of a $1.85 billion settlement after it was found that the company participated in unfair and deceptive practices. 

Attorney General Ellen Rosenblum, announced the settlement Thursday, along with 38 other states attorneys general. 

In Oregon, 5,488 borrowers will receive nearly $1.5 million in restitution – about $260 per person – for federal loans serviced by Navient, and 864 will receive nearly $22.5 million in outright debt cancellation from private loan debts managed by Navient. That’s an average of more than $26,000 each. The money will be sent and debt canceled by July of 2022.

Loan servicers work with loan providers, and handle sending loan recipients their statements and helping them manage their loans. 

Those who qualify for restitution or cancellation don’t need to take action to get their share of the settlement as long as they have an online account with the Federal Student Aid office at and it is updated to include a current address. 

The settlement comes after complaints dating to 2009 that the company told borrowers it would advise them how to best repay their loans, but instead steered those struggling to make payments into long-term forbearances – essentially pausing their payments while they still accrued interest. They did this rather than informing student borrowers about more affordable repayment plans to reduce their monthly payments and didn’t tell them about subsidies to help pay loan interest, according to a statement from the 39 state attorneys general.

Navient also neglected to steer qualifying borrowers into the Public Service Loan Forgiveness Program for borrowers working in public service.

The states’ attorneys general also alleged that Navient targeted its subprime private loans at students attending for-profit schools with low graduation rates. They did this despite knowing many of these borrowers would be unable to pay them back.  

“For over a decade, Navient promised student loan borrowers it would help them find the best repayment options. Instead, they steered struggling borrowers into more costly payment plans. Today we’re getting some of that money back and putting it into the hands of Oregonians who’ve been harmed,” Rosenblum said in a statement.

Rosenblum championed a Student Loan Borrowers Bill of Rights passed by the 2021 Legislature, that created a student loan ombudsperson to counsel borrowers, and require that student loan servicers be licensed with the Oregon Department of Consumer and Business Services. The agency is also charged with helping to regulate student loan servicers who work with Oregon borrowers.

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