As one of the largest U.S. educational lenders on Thursday agreed to pay $1.85 billion to 39 states to resolve predatory lending claims, progressive lawmakers and advocates renewed calls for the cancellation of all outstanding student loan debt.
“All student loans are predatory because no one should have to go into debt to get an education.”
CNBC reports that as part of the settlement, Delaware-based Navient—which split from SLM Corporation, or Sallie Mae, in 2014—will cancel $1.7 billion in private student loan debt owed by nearly 66,000 borrowers.
As part of the agreement, Navient gets to deny that it broke the law, even though the company stands accused of preying on customers it knew were unlikely to be able to repay their debts.
“At long last, the student loan borrowers who had been forced to shoulder the burden of dangerous and predatory private student loans made by Sallie Mae and owned by Navient will finally be debt-free,” Mike Pierce, executive director of the Student Borrower Protection Center, said in a statement.
According to the Student Debt Crisis Center (SDCC), the U.S. will surpass $1.875 trillion in educational debt on Thursday.
Former Ohio state senator and Democratic U.S. congressional candidate Nina Turner called the Navient settlement “a drop in the bucket.”
“All student loans are predatory because no one should have to go into debt to get an education,” she tweeted.
Following intense pressure from activists and progressive lawmakers, the Biden administration last month extended a pandemic-related moratorium on federal student loan payments until May. But economic justice advocates say the move only postpones the pain for millions of borrowers.
Sen. Elizabeth Warren (D-Mass.) tweeted, “With one stroke of the pen, President [Joe] Biden could #CancelStudentDebt for tens of millions and show the American people that the government is on their side.”
U.S. Rep Ilhan Omar (D-Minn.) expounded the long-term consequences of educational loans, tweeting that “student debt is holding back millions from homeownership, opening a business, and saving for the future.”
Omar noted that her office has been writing to Biden urging him to keep his promise to cancel student debt.
“We’re still waiting,” she said.