- The CFPB settled with student loan servicer Navient Corporation and related entities (collectively, “Navient”) to resolve allegations that its unfair and deceptive service of student loans violated the Consumer Financial Protection Act of 2010, the Fair Credit Reporting Act’s related regulation, and the Fair Debt Collection Practices Act.
- The complaint alleged that Navient steered certain borrowers toward forbearance instead of lower-cost income-driven repayment plans; failed to inform borrowers about income-driven repayment plan renewals; misled borrowers about requirements to release co-signers, and the effects of loan rehabilitation on credit reports and collection fee forgiveness; misled borrowers in income-driven repayment plans about consequences of failing to submit annual recertifications; erroneously processed payments; and provided inaccurate information to credit reporting agencies.
- Under the terms of the settlement, Navient will pay $100 million in consumer redress and a $20 million civil penalty, and Navient is permanently banned from servicing certain federal loans, among other relief.
- We have previously reported on a bipartisan 40-state settlement with Navient in 2022 to settle similar allegations.