Summary
Thousands of student loan borrowers will receive payments following a $120 million settlement with Navient. The Consumer Financial Protection Bureau (CFPB) accused Navient of directing borrowers into costly forbearance instead of more affordable income-driven repayment plans.
Key Facts
- A $120 million settlement was reached between Navient and the CFPB.
- Navient was accused of steering borrowers into forbearance, leading to more interest, instead of offering income-driven repayment plans.
- Forbearance allows temporary payment pauses, but interest still adds up.
- Income-driven plans adjust payments based on income and family size.
- Payments to affected borrowers started on February 13 and are automatic.
- Navient will pay a $20 million civil penalty and $100 million to harmed borrowers.
- Navient no longer services federal student loans as of 2021.
- The CFPB's 2024 settlement follows a 2022 multistate action involving $1.85 billion in relief.
