Maine will join a $1.85 billion settlement with the student loan service company Navient for predatory treatment of borrowers, attorney general Aaron Frey announced Friday.  

The proposed settlement includes $4.9 million in private loan debt cancellation for Mainers, as well as restitution payments of about $250 each for 1,157 federal loan recipients in the state.

In a press release, Frey said Navient worked to steer borrowers further into debt instead of helping them out of it in ways it had promised, and gave predatory subprime private loans to students attending schools with low graduation rates who were unlikely to be able to repay. 

“Navient allegedly made these risky subprime loans as ‘an inducement to get schools to use Navient as a preferred lender’ for highly profitable federal and prime private loans, without regard for borrowers and their families, many of whom were knowingly ensnared in debts they could never repay,” Frey said.

People whose debt will be canceled will receive refunds for any payments they made after June 30, 2021. People receiving restitution payments will get more information this spring, and can learn more at NavientAGSettlement.com. 

The state says people who qualify for relief only need to make sure that the federal Department of Education has their current address through studentaid.gov, then look out for details by mail. 

There is currently a federal pause on student loan payments due to the pandemic until May 1.