Navient CFPB Settlement on Student Loans for $120 Million

Student loan servicer Navient was slammed by a proposed $120 million court order. According to the Consumer Financial Protection Bureau (CFPB), this court order will also prevent Navient from servicing federal direct loans. This includes most Federal Family Education Loan Program loans. Student loan borrowers could also expect a reimbursement.

Navient and the CFPB Settlement on Student Loans

The accusations by the CFPB are nothing short of loan sharking. Per the CFFB, the misconduct of Navient involved having student loan borrowers who qualified for repayment plans were instead delayed into loan repayments, causing them to pay more interest.

Of the $120 million, $100 million is for restitution. The remaining $20 million is a fine. This is in addition to a prior  $1.85 billion settlement with 38 U.S. states and Washington, D.C., for charges of predatory lending with student loan borrowers.

Last year, another settlement with Navient settled for $198 million with private student-loan borrowers who claimed the lender was collecting on debts that had been discharged in bankruptcy.

According to the press release, the CFPB will mail checks to impacted borrowers, and they do not need to do anything to obtain the relief. There’s no additional information at this time as to when those funds will be distributed.

Per the CFPB’s press release:

“The CFPB’s investigation of Navient kicked off a series of efforts by state and federal agencies to examine forbearance steering and other breakdowns in the income-driven repayment program. Those efforts have resulted in more than $50 billion in debt relief for more than 1 million borrowers who were wrongly steered into forbearance, as well as those who had payments miscounted. Today’s order complements actions already taken by the Department of Education and state attorneys general to provide redress to borrowers harmed by Navient.”

The proposed court order can be found via this link. The CFPB press release can be found via this link. Additional articles related to student loans can be accessed here.

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