The Navient Settlement Will Save $1.7 Billion in Student Loans

On Thursday, Navient, one of the nation's largest student loan companies, 

agreed to a major settlement with 39 state attorneys general.

Navient was accused of misleading student loan borrowers into forbearances 

and away from critical federal student loan relief programmes like income-driven repayment

 plans and Public Service Loan Forgiveness, the lawsuit claimed (PSLF). 

Interest accrues on student loans during paused payments, which can be capitalised — added back to 

the loan principal balance — leading to compounding and runaway balance growth. 

Forbearances do not count towards loan forgiveness terms, such as the 25-year Income Based

 Repayment (IBR) repayment term or the 10-year public service employment requirement for PSLF borrowers.