Navient settlement checks are going out — see which student loan borrowers qualify
Over 100,000 student loan borrowers may receive checks from a $120 million Navient settlement due to being steered into costly forbearances.Summary
A $120 million settlement with the Consumer Financial Protection Bureau (CFPB) means approximately 100,000 borrowers who had their federal student loans serviced by Navient may receive settlement checks. The CFPB found that Navient directed struggling borrowers into repeated forbearances – pausing payments while interest continued to accrue – instead of offering income-driven repayment plans that could have lowered their monthly bills.
To qualify, borrowers must have had federal student loans serviced by Navient and been placed in forbearance in 2017 or earlier; no application is needed, as the CFPB is automatically identifying and distributing payments through Rust Consulting. The amount of each check varies, but estimates range from several hundred dollars to up to $2,000, reflecting the financial harm caused by unnecessary interest.
The case highlights the financial risks of forbearance, where interest continues to build even while payments are paused, potentially increasing the total loan cost significantly. Income-driven repayment plans offer a more affordable alternative by capping payments based on income and potentially leading to loan forgiveness.
(Source：The Economic Times)