Navient Reaches $198 Million Bankrupt Student Debt Discharge Deal

Navient Corp. agreed to a nationwide settlement worth $198 million with private student loan borrowers who say their bills should have been discharged in bankruptcy.

The settlement, filed in the US Bankruptcy Court for the Eastern District of New York on Friday following six years of litigation, provides broad relief to about 4,600 Navient student borrowers whose loans exceeded college tuition costs. The borrowers had alleged in a certified class action that the private student loan company violated their legal rights by continuing efforts to collect on debts that were discharged in bankruptcy.

Under the deal, Navient will forego collecting ...