Law Firm Defends No-Money Navient Settlement While Also Collecting $500K

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September 30, 2020

The law firms that negotiated a settlement of student-loan claims against Navient that pays class members nothing but yields lawyers $500,000 in fees defended the deal as providing non-monetary benefits for borrowers according to a report in Legal Newsline.

Lawyers at Selendy & Gay and Phillips, Richard & Rind, touted the settlement as “a leap forward for student borrowers” because it would require certain “business enhancements,” making it easier for borrowers to learn about government loan forgiveness programs. As part of the settlement, Navient would also pay $1.75 million in what lawyers call cy pres relief to establish an independent non-profit to provide education and counseling services.

The settlement drew more than 100 objections, including one which called the contribution to a completely unrelated charity instead of paying class members directly “the worst form of cy pres relief.” 

09/30/2020