Navient Reaches $120 Million Student Loan Settlement With Consumer Watchdog

Published On Sep 12, 2024, 10:54 AM

Navient has reached a $120 million settlement with federal regulators following allegations of misleading student loan borrowers and mishandling their payments. The settlement entails a permanent ban from servicing federal student loans, restitution of $100 million to affected borrowers, and a $20 million penalty. The Consumer Financial Protection Bureau accused Navient of steering borrowers towards forbearance instead of more advantageous repayment plans, resulting in higher costs for the borrowers.

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The ban on Navient from servicing federal student loans could negatively impact its business model. As it transitions away from this sector, revenue generation will be reduced, potentially leading to underperformance in the stock market. Investors might want to consider divesting or avoiding Navient shares in the near term.

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Navient Reaches $120 Million Student Loan Settlement With Consumer Watchdog

Sep 12, 2024, 10:54 AM

The company has been banned from servicing federal student loans and must pay $100 million to harmed borrowers, as well as a $20 million penalty.

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