According to the Consumer Financial Protection Bureau, $100 million will be used to make payments to impacted borrowers in a settlement with the former servicer of student loans.
Navient, one of the country’s largest student loan servicers, has reached a $120 million settlement with the Consumer Financial Protection Bureau — resulting in the company being permanently banned from servicing federal student loans.
"By banning the notorious student loan giant from federal student loan servicing and ensuring the winddown of these operations, the CFPB will finally put an end to the years of abuse," he added., which claimed that the Virginia-based company misled student loan borrowers and processed their payments incorrectly.
Navient, at the time, was one of the largest companies contracted by the U.S. Department of Education to service federal student loans. But in July 2021, the companyThe former student loan provider serviced loans for more than 12 million borrowers and roughly $300 million in federal and private student loans, the CFPB said.that the agreement puts"these decade-old issues behind us." The company said it does not agree with the CFPB’s allegations.
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