Payments begin in $120M Navient Student Loan Settlement

Individuals who had student loans Navient Solutions or Pioneer Credit Recovery serviced could receive compensation from a multimillion dollar settlement.

Navient Corp. agreed to pay $120 million to settle a lawsuit the Consumer Financial Protection Bureau brought for alleged widespread student loan servicing failures. The lawsuit claimed Navient and its affiliates steered borrowers into costly forbearance instead of more affordable income-driven repayment plans, misapplied payments, provided inaccurate credit reporting and misled borrowers about repayment and cosigner release options.

The final judgement and order required Navient to pay $100 million in redress to impacted student loan borrowers and a $20 million penalty to the CFPB victim's relief fund. In addition to the payments, the order banned Navient from servicing most federal student loans.

Who qualifies to receive a student loan payout?

Student loan holders qualify to receive a redress payment if:

• They had one or more student loans Navient Solutions LLC or Pioneer Credit Recovery Inc. serviced.
• The companies steered them into forbearance instead of offering income-driven repayment plans or Navient’s servicing practices otherwise affected them.
• They experienced misapplied payments or inaccurate credit reporting, or received misinformation about repayment options.
• Navient’s records identified them as harmed by these practices.

How much are Navient settlement payments?

Cash payment: Qualified individuals are receiving cash payments from the CFPB. The settlement administrator will determine payment amounts by the total number of qualified student loan holders, number and size of loans Navient or Pioneer serviced and the harm experienced. Some recipients reported payments of several hundred or thousands of dollars..

According to the CFPB press release, the redress payments do not change or reduce any student loans recipients owe. Borrowers should continue to work with their current loan servicer for ongoing loan management.

No claim form required

Eligible consumers did not need to submit a claim form to receive a Navient settlement payment.

Payout options

The settlement administrator will mail paper checks to the address on file.

$120 million Navient settlement fund breakdown

• Payments to eligible student loan borrowers: $100 million for redress
• Civil penalty to CFPB: $20 million paid to the CFPB’s victims relief fund

Important dates

• Final judgment order and effective date: Sept. 12, 2024

When is the Navient settlement payout date?

The settlement administrator began mailing payments to eligible borrowers on Feb. 13, 2026.

Why did the CFPB file a lawsuit against Navient?

The Consumer Financial Protection Bureau filed a lawsuit against Navient alleging it systemically failed borrowers throughout the entire student loan servicing process. According to the lawsuit, Navient's unlawful actions led to an increase in monthly payments, additional interest accrual, negative credit reporting and misallocated payments, impacting millions of individuals.

Sources

1. CFPB Navient settlement press release
2. CFPB Navient settlement payments page
3. Stipulated final judgment and order