CFPB Bans Navient from Federal Student Loan Servicing, Orders $120 Million Payment Including $100 Million to Borrowers

Sep 12, 2024, 04:01 PM

The Consumer Financial Protection Bureau (CFPB) has reached a settlement with Navient, one of the nation's largest student loan servicers, over allegations of wide-ranging student lending failures. Under the terms of the settlement, Navient will be permanently banned from servicing federal student loans and will pay $120 million in penalties and refunds. The CFPB accused Navient of misallocating payments, steering borrowers into costly plans, providing incorrect information, and ignoring borrowers' pleas for help. The settlement aims to provide relief to millions of borrowers affected by Navient's practices, including $100 million in payments to student-loan borrowers.