In a major win for student loan borrowers, Navient, one of the largest student loan servicers in the U.S., has agreed to a $120 million settlement after years of legal battles. The company has been accused of misleading borrowers and pushing them into costly repayment plans instead of affordable options.
The settlement, announced by the Consumer Financial Protection Bureau (CFPB) on September 12, 2024, bans Navient from servicing federal student loans and provides financial compensation to those affected.
Why Is Navient Paying $120 Million?
The lawsuit against Navient dates back to 2017, when regulators accused the company of unfair loan practices. Navient allegedly:
- Steered borrowers into forbearance instead of income-driven repayment plans, causing unnecessary interest to pile up.
- Mishandled loan payments, leading to financial losses for borrowers.
- Provided misleading information about repayment and loan forgiveness programs.
As a result, many borrowers ended up paying more than they should have, delaying their path to financial freedom.
Who Is Eligible for Compensation?
Navient has agreed to pay a total of $120 million, including:
- $100 million in refunds to borrowers who were misled.
- A $20 million penalty as part of the settlement.
If you were affected, you don’t need to apply—eligible borrowers will receive payments automatically. The CFPB will contact those who qualify, so make sure your contact details are up to date.
What Does This Mean for Borrowers?
This settlement is a major step toward holding student loan servicers accountable. Navient will no longer be allowed to service federal loans, ensuring that future borrowers are protected from similar issues.
If you have a loan serviced by Navient, keep an eye on official communications regarding potential refunds. In the meantime, check with your new loan servicer to explore repayment plans that work best for you.
Navient’s Response
Despite agreeing to the settlement, Navient denies any wrongdoing. The company claims it only settled the lawsuit to avoid ongoing legal battles.
Still, this marks a significant victory for student borrowers, reinforcing the importance of transparency and accountability in student loan servicing.
Final Thoughts
For millions of student loan borrowers, this news brings hope for long-awaited financial relief. If you’ve ever had a loan with Navient, it’s worth checking whether you’re entitled to compensation. Keep an eye on official CFPB updates to ensure you get what you’re owed.
