Navient, a leading student loan servicer in the United States has faced a number of lawsuits and settlements. As a result of its conviction, it is possible that several student loan borrowers who had been victims of Navient’s actions might get refunds.
Navient’s will possibly pay $120 million as settlement
The Consumer Financial Protection Bureau (CFPB) accused the company of numerous transgressions and Navient agreed to disburse $120 million in settlement. These include steering borrowers towards expensive repayment plans, giving incorrect details, and processing payments wrongly. The settlement was publicized as part of a lawsuit that has been in court since 2017.
There are two sections of this settlement: Navient’s $20 million penalty which is separate from the other area where $100 million has been set aside to help those affected. For eligible borrowers, this sum will be given in the form of checks sent via mail directly to them. The best part is that if you fit in their criteria, you need not do anything, and they will send checks on their own.
What led to the Navient conviction
Navient’s conviction is as a result of various allegations, some of which date back to the time when it was associated with Sallie Mae. The CFPB claims that Navient broke several laws such as the Fair Debt Collection Practices Act and the Consumer Financial Protection Act. The CFPB lawsuit claimed that Navient did several harmful things like making borrowers pay higher payments, giving them wrong information on income-driven repayment plans, mishandling payments, and damaging credit of disabled individuals including veterans. As per Rohit Chopra, the director of CFPB, “For years, Navient’s top executives profited handsomely by exploiting students and taxpayers.”
For student loan borrowers who were affected by Navient’s practices, this settlement from CFPB is a great victory in their favor. Apart from the $120 million settlement, it has also been permanently prohibited from servicing federal student loans making this significant step towards making the company accountable.
How much can you expect in a refund
Even though the precise sum that each borrower will obtain has not been mentioned, the CFPB mentioned that affected students can expect to receive a relief from part of the allocated money for borrowers which is $100 million. Probably thousands are eligible for refunds. Nonetheless, there are still no distinct specifications or sums to be paid out as per an individual’s circumstances from CFPB.
If you happen to be among the victims of Navient’s failed attempt in managing loans, expect checks to be sent straight to your postal address. It is advisable for you to maintain your current address details with either NCFPB or Navient, so that you can get your payment on time.
What borrowers must know
The recent $120 million settlement follows a $1.7 billion one reached in 2022 between Navient and 39 state attorneys general to help cancel student loan debt. Navient ended up canceling student loan debts incurred by approximately 66,000 borrowers who were identified in the course of the study as well as paying out $95 million as reimbursements to 350,000 others.
These settlements send out a strong message that student loan servicers should be held responsible for any practice that can be harmful to borrowers. Many students who bore the burden of mounting student loans can now experience some level of relief. It is crucial to keep yourself updated and watch for any new developments because you may be eligible for a refund from any of these settlements. Make sure you don’t miss it.
What you should do now
If you suspect you might be one of the impacted borrowers, you should keep an eye on any correspondence from the CFPB or Navient. You don’t need to apply for these refunds, but it is essential that your contact information is current.
With the settlement finally putting an end to Navient’s federal loan servicing, borrowers can begin to find some closure and potentially receive some financial relief.
