Thousands of Pennsylvania student loan borrowers will receive restitution or debt cancellation after loan servicer Navient paid $1.85 billion to settle a nationwide lawsuit.

Approximately 13,000 borrowers in Pennsylvania will receive $3.5 million in restitution payments, and 2,467 more will receive $67 million in student debt cancellation as a result of a settlement with student loan servicer Navient, Attorney General Josh Shapiro said Thursday.

Navient will pay $1.85 billion to resolve allegations of “widespread unfair, deceptive and abusive student loan servicing practices,” Shapiro explained at a news conference broadcast from Drexel University in Philadelphia.

The lawsuit was joined by 39 other state attorneys general across the country.

As a result of the settlement, Navient will cancel remaining balances on more than $1.7 billion in subprime private student loans owed by 66,000 borrowers nationwide. The company also will pay $95 million in restitution payments of about $260 each to 350,000 federal loan borrowers who were placed in certain long-term forbearances.

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