Navient Banned from Federal Student Loan Servicing and Fined $120 Million
Navient has reached a $120 million settlement with the Consumer Financial Protection Bureau, permanently banning the company from servicing federal student loans. The settlement resolves allegations of misleading borrowers and mishandling payments, with compensation to be provided to affected borrowers.
| Score | Value |
|---|---|
Scale | 8 |
Novelty | 5 |
Positivity | 6 |
Reliability | 8 |
Actionability | 3 |
Society | 7 |
Journalism | 4 |
Highlights
- Navient has been banned from servicing federal student loans.
- The company is required to pay $120 million, including $100 million in compensation to affected borrowers and a $20 million penalty.
- The settlement resolves a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) in 2017.
- Navient was accused of misleading borrowers about repayment options and mishandling payment processing.
- The settlement will result in checks being mailed to hundreds of thousands of eligible borrowers.
Perspectives
- CFPB Director Rohit Chopra emphasized that the settlement marks the end of years of abuse by Navient, which he described as one of the worst offenders in the student loan servicing industry, highlighting the harm caused to millions of borrowers. [13][22][25][26][29]
- Navient stated that while it does not agree with the CFPB's allegations, the settlement is a positive step for the company, allowing it to move forward and put decade-old issues behind it. [13][22][25][34]