{"id":1490003,"date":"2024-09-15T12:45:00","date_gmt":"2024-09-15T16:45:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1490003"},"modified":"2024-09-15T12:45:00","modified_gmt":"2024-09-15T16:45:00","slug":"large-student-loan-servicer-banned-from-service-ordered-to-pay-120-million-settlement","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/large-student-loan-servicer-banned-from-service-ordered-to-pay-120-million-settlement\/1490003\/","title":{"rendered":"Large Student Loan Servicer Banned From Service, Ordered To Pay $120 Million Settlement"},"content":{"rendered":"

Large Student Loan Servicer Banned From Service, Ordered To Pay $120 Million Settlement<\/span><\/p>\n

\n

Authored by Chase Smith via The Epoch Times<\/a> (emphasis ours), <\/em><\/p>\n

Navient, once the largest student loan servicer in the United States, has been permanently barred from federal student loan servicing and ordered to pay a $120 million settlement <\/strong>following years of alleged regulatory and legal violations.<\/p>\n

The headquarters of student loan debt collector Navient Corp. in Wilmington, Del., on April 2, 2014. William Bretzger\/The Wilmington News-Journal via AP, File<\/em><\/a><\/p>\n

The Consumer Financial Protection Bureau (CFPB) announced the proposed order<\/a> against the servicer formerly known as Sallie Mae on Sept. 12. In 2017<\/strong>, the company at one point serviced loans of more than 12 million borrowers, half of which were accounts under its contract with the Department of Education, accounting for more than $300 billion in federal and private student loans.<\/p>\n

The CFPB estimates that hundreds of thousands of consumers may be eligible for redress in the settlement<\/strong>, but the agency has not yet determined a precise number of consumers, or the amount each individual will receive.\u00a0<\/strong><\/p>\n

The CFPB will identify consumers who are eligible for redress under the order in the coming months. There is no need for consumers to contact the CFPB or take any other action to get a check, and eligible consumers will receive a check from the CFPB or its contractor in the mail, the agency said.<\/p>\n

\u201cFor years, Navient\u2019s top executives profited handsomely by exploiting students and taxpayers<\/strong>,\u201d CFPB director Rohit Chopra said in a statement. \u201cBy banning the notorious student loan giant from federal student loan servicing and ensuring the wind-down of these operations, the CFPB will finally put an end to the years of abuse.\u201d<\/p>\n

The settlement stems from CFPB\u2019s 2017 lawsuit against Navient. The lawsuit accused the company of steering student loan borrowers into costly repayment options, depriving them of more affordable income-driven repayment plans, and engaging in other unlawful practices.<\/p>\n

The order, which is pending court approval, would impose a permanent ban on Navient\u2019s involvement in servicing federal direct loans and prohibit the company from acquiring most loans under the Federal Family Education Loan Program (FFELP).<\/strong><\/p>\n

Under the terms of the settlement, Navient will pay a $20 million penalty and provide $100 million in redress to borrowers harmed by its practices.<\/p>\n

This includes compensation for borrowers who were allegedly steered into forbearance\u2014a practice that allowed Navient to avoid the more complex process of enrolling borrowers in income-driven repayment plans but led to increased interest charges for many.<\/p>\n

According to the CFPB, these actions resulted in numerous borrowers paying significantly more than they should have.<\/strong><\/p>\n

The settlement represents what CFPB said is a broader effort by state and federal agencies to hold loan servicers accountable for their role in steering borrowers into forbearance and other harmful repayment strategies.<\/p>\n

U.S. Under Secretary of Education James Kvaal praised the CFPB\u2019s action, stating, \u201cI applaud the CFPB for obtaining concrete relief for borrowers and deterring similar failures in the future.\u201d<\/p>\n

In recent years, Navient has been at the center of several legal battles, including a 2014 case in which it was ordered to pay nearly $100 million for overcharging servicemembers, and a 2022 settlement<\/a> with 39 state attorneys general for $1.85 billion over its alleged predatory lending practices.<\/p>\n

In response to the CFPB\u2019s latest enforcement action, Navient issued a statement saying that while the company disagrees with the allegations, the resolution is consistent with its plans to move forward.<\/strong><\/p>\n

\u201cThis agreement puts these decade-old issues behind us,<\/strong>\u201d Navient said. \u201cNavient is no longer a servicer or purchaser of federal student loans.\u201d<\/p>\n

The company ceased servicing federal direct loans in 2021, transferring its remaining loans to a third-party servicer, it said in the statement.<\/p>\n

Earlier this year, Navient also outsourced the servicing of its legacy FFELP student loans. The CFPB\u2019s order ensures that Navient can no longer directly service federal student loans or expand its FFELP portfolio.<\/p>\n

In addition to the financial settlement, the order mandates that Navient take several steps to protect borrowers\u2019 rights, including ensuring that they can enroll in affordable repayment plans.<\/strong><\/p>\n

The CFPB will distribute checks to affected borrowers, cautioning them to remain vigilant against scammers who may attempt to exploit the redress process.<\/p>\n

The CFPB also will identify injured consumers who will receive redress for Navient\u2019s forbearance steering practices and Navient\u2019s furnishing of inaccurate information for consumers who had their loans discharged due to a total and permanent disability. For the forbearance steering claims, these determinations may take into account the length of time the borrower was enrolled in forbearance, among other criteria, the agency said.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSun, 09\/15\/2024 – 08:45<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/political\/large-student-loan-servicer-banned-service-ordered-pay-120-million-settlement<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Large Student Loan Servicer Banned From Service, Ordered To Pay $120 Million Settlement Authored by Chase Smith via The Epoch Times (emphasis ours), Navient, once…<\/p>\n","protected":false},"author":0,"featured_media":1490004,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1490003","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6fCj","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/09\/image2825329-dXhYav.jpeg","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1490003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1490003"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1490003\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1490004"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1490003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1490003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1490003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}