Navient student loan borrowers may now qualify for relief in its latest $120 million settlement, reports are confirming.
In a major development for student loan borrowers, Navient has agreed to a whopping $120 million settlement with the U.S. Consumer Financial Protection Bureau (CFPB).
This settlement aims to provide relief to hundreds of thousands of individuals who were misled or inadequately serviced by Navient, one of the nation’s largest student loan servicers.
The CFPB has accused Navient of various malpractices, including directing borrowers toward expensive forbearances, miscalculating loan payments, and providing incorrect information about repayment options.
These actions resulted in significant financial strain for many borrowers, negatively impacting their credit scores and causing undue stress.
As part of the settlement, Navient will pay $120 million, with $100 million designated for compensating affected borrowers and $20 million allocated to the CFPB’s civil penalty fund.
Additionally, this agreement permanently prohibits Navient from servicing federal student loans, marking a notable change in the student loan servicing industry.
Who Is Eligible for Relief?
While the CFPB has yet to specify the eligibility criteria, it suggests that borrowers serviced by Navient, including those from Sallie Mae, may qualify for relief.
Borrowers can check who their federal student loan servicer is by visiting Studentaid.gov.
Navient transferred its federal student loan accounts to Maximus Aidvantage in 2021.
Potential qualifying issues include being charged fees for entering forbearance, incurring multiple late fees for a single delayed payment, and being misled into interest-accruing forbearances without being informed about more affordable repayment options.
How do you claim compensation?
Eligible borrowers are expected to be identified automatically by the CFPB, meaning they won’t need to take any action to receive their payments.
The process of identifying and compensating eligible individuals is anticipated to take several months.
This settlement marks a significant victory for student loan borrowers who have faced challenges due to Navient’s practices.
It also highlights the critical role of regulatory oversight in protecting consumers from unfair practices.
Borrowers affected by this settlement can look forward to financial relief and progress in addressing the issues they have encountered.
For more information, borrowers are encouraged to visit the CFPB’s website or contact their current loan servicer to learn how this settlement may impact them.
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