Navient settlement overview:
- Who: Student loan service Navient Corp. agreed to a $120 million settlement to resolve a lawsuit the Consumer Financial Protection Bureau filed in 2017.
- Why: The settlement will resolve allegations related to Navient’s alleged predatory practices.
- Where: The student loan settlement was reached in a Pennsylvania court but will benefit borrowers nationwide.
Navient Corp agreed to pay $120 million to resolve a class action lawsuit the Consumer Financial Protection Bureau filed in 2017.
The lawsuit claimed Navient directed hundreds of thousands of student loan borrowers into expensive forbearance programs rather than advising them of available income-driven repayment options. It also alleged Navient failed to counsel clients adequately and provided false information regarding repayment plans, leading borrowers to accumulate additional interest charges that could have been avoided.
The student loan settlement also resolves accusations claiming the company applied payments to incorrect loans and ignored client complaints, according to settlement documents.
As part of the Navient settlement, the company will pay $100 million to the borrowers Navient allegedly harmed and a $20 million fine.
Navient no longer services, buys federal student loans
In addition to the financial aspects of the Navient settlement, the company is banned from buying or servicing federal student loans. As of July 2024, all government contracts and existing student loans have been outsourced or transferred to third-party organizations.
“For years, Navient’s top executives profited handsomely by exploiting students and taxpayers,” CFPB Director Rohit Chopra says in a statement,.” By banning the notorious student loan giant from federal student loan servicing and ensuring the winddown of these operations, the CFPB will finally put an end to the years of abuse.”
In 2021, investors filed a class action lawsuit against Navient alleging it artificially inflated stock prices and lied to them. They claimed this alleged lack of transparency eventually led to a dramatic drop in stock value and a financial loss for investors.
Did Navient act as a lender for your student loans or later purchase your federal student loan debt? Let us know in the comments.
The Navient student loan settlement closes the case of Consumer Financial Protection Bureau v. Navient Corporation, et al., Case No. 3:17-cv-00101-RDM, in the District Court for the Middle District of Pennsylvania.
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1,905 thoughts onNavient to pay $120M student loan settlement
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Navicent handled my student loan
Navient handled my loans. I believe I was taken advantage of by the way they handled my loans. My loans were $12,000.00 plus in 2002. Twenty-three years later, my student loans are still $10,000.00 plus.
Please add me Navient had my loans they hook up with these trade schools scam the heck out of those who have the most to lose and then walk away scot-free. While we will now struggle and suffer for the rest of our lives due to their lies.