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8mo ago

Navient to Pay $100 Million in Landmark Settlement Over Student Loan Mismanagement

The CFPB's agreement bans Navient from federal loan servicing and aims to compensate affected borrowers.

The headquarters of student loan debt collector Navient Corporation is seen in Wilmington, Delaware, on April 2, 2014.
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Signage is seen on the offices of Navient in Wilmington, Delaware, in June 2021.
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Overview

  • The Consumer Financial Protection Bureau (CFPB) reached a settlement with Navient after years of litigation over alleged misconduct in student loan servicing.
  • Navient is accused of misleading borrowers about repayment plans and loan forgiveness, misallocating payments, and harming borrowers' credit.
  • The settlement prohibits Navient from managing federal student loans, effectively barring them from the federal loan servicing market.
  • Eligible borrowers could receive part of the $100 million in monetary compensation, with the CFPB handling the distribution of payments.
  • The settlement is pending court approval, and the timeline for when borrowers will receive compensation has not yet been provided.