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Student loan borrowers are starting to receive payments from a settlement between the Consumer Financial Protection Bureau and loan servicer Navient that was completed in 2024.
CFBP accused Navient, under the Biden administration, of forcing borrowers to suspend payments and pay more interest despite qualifying for cheaper repayment plans. The agency also alleged other deceptive practices.
Navient said it disagreed with the allegations, suspended federal student loan repayments and agreed to pay $120 million to settle the lawsuit. Most of that money, $100 million, was set aside to compensate borrowers.
According to a 2024 news release announcing the proposed enforcement action, when the CFPB filed the case that was ultimately settled in 2017, Navient was handling more than 6 million student loan accounts under a contract with the Department of Education.
The payments come more than a year after President Donald Trump effectively blocked the CFPB, with consumer advocates arguing that hundreds of millions of dollars in payments stemming from enforcement actions begun under the Biden administration are at risk.
Mike Pearce, a former CFPB official and president of the advocacy group Protect Borrowers, said in a statement to Reuters that the government’s actions delayed payments by more than a year and gave the industry a “free pass” even as student loan defaults are on the rise.
USA TODAY reached out to Navient and the CFPB for comment, but did not immediately receive a response.
Here’s what you need to know about Navient Payments payments.
How do borrowers know if they are eligible for a Navient settlement payment?
According to the CFPB’s website, eligible borrowers will receive a check in the mail. The website states that payments began on February 13th.
Are people receiving payments for Navient payments?
There are multiple reports of consumers receiving mailed checks on social media, primarily on the r/StudentLoans subreddit. Payments appear to range from about $100 up to $2,000.
Consumers who believe they are entitled to a payment but have not received one are directed by the CFPB to contact Rust Consulting, which is administering the payment in this case.
Contributed by: Reuters
