EDUCATION
Navient will pay $100 million in compensation to student loan borrowers: Who qualifies?
Here are the key details about who may qualify for compensation after the resolution of a seven-year-old litigation.
Navient, a former major student loan servicer, has agreed to pay $100 million in compensation to affected student loan borrowers as part of a settlement with the Consumer Financial Protection Bureau (CFPB).
The settlement is aimed at borrowers whose loans were serviced by Navient. While exact eligibility criteria have not been released yet, officials have indicated that hundreds of thousands of borrowers are expected to receive checks.
The CFPB has stated that in most cases, checks will be mailed out automatically to eligible borrowers. Key points about the distribution process include:
- Borrowers do not need to take any action at this time to receive payment
- The CFPB may send out claim forms by mail or email if more information is needed to determine eligibility
- The process of identifying eligible borrowers is expected to take several months
The settlement order must first be approved by a federal court in Pennsylvania. Once approved, Navient will have 10 days to pay the fines in full.
Borrowers can verify the legitimacy of any communication or check they receive by checking the list of active CFPB relief measures or calling the CFPB directly at (855) 411-2372.
Why Navient was in the dock
The key reasons for this compensation include misleading borrowers: Navient allegedly provided incorrect information about income-driven repayment options, steering borrowers into more expensive plans. The company also allegedly encouraged borrowers to enter forbearance instead of more affordable income-driven repayment plans, leading to unnecessary interest charges
“Today we are closing the book on Navient, one of the worst offenders in the student loan servicing industry, and a company that has harmed millions of borrowers across the country,” CFPB Director Rohit Chopra told reporters