One of the largest student loan companies Thursday agreed to a settlement that will forgive $1.85 billion in debt after allegations of widespread deceptive practices.

39 state attorney generals accused loan servicer Navient of encouraging students to enter into predatory forebearance instead of more affordable income-driven repayment plans. Forebearance allows borrowers to pause payments, but interest will still accrue on the principal.

A 2019 audit by the Department of Education found that on 9.2% of calls they reviewed, Navient representatives “did not offer alternative or potentially beneficial options when attempting to assist borrowers with bringing their account current or managing repayment.”

According to the attorney generals, these deceptive practices trapped borrowers in long-term debt even though “income-driven repayment plans could have potentially reduced payments to as low as $0 per month…and helped attain forgiveness of any remaining balances after 20-25 years of qualifying payments.”

Under the settlement, Navient must cancel $1.7 billion in subprime private student loan balances owed by more than 66,000 borrowers. They must also pay $142.5 million to the 39 state attorney generals. An additional $95 million in restitution payments, approximately $260 per recipient, will be distributed to nearly 350,000 borrowers who were placed in certain long-term forbearances. To be eligible, borrowers must have lived in a participating state since 2017 and have been in forebearance for at least two years.

Navient is also required to notify borrowers about the US Department of Education’s recently announced PSLF limited waiver opportunity, which temporarily offers millions of borrowers who work in the public service industry the chance to have previously non-qualifying repayment periods count towards their loan forgiveness.

Despite settling, Navient denies any wrongdoing and claims they opted for a settlement in lieu of paying the cost of resolving each individual lawsuit.