Navient, formerly Sallie Mae, ordered to pay $120 million for illegal student loan practices

WASHINGTON (Gray DC) - The Consumer Financial Protection Bureau says Navient took advantage of its contract with the government, and did not act in student’s best interest.

“Navient routinely steered people into plans that made them money, and to get them off the phone as quickly as possible,” Consumer Financial Protection Bureau Director Rohit Chopra said. “That cost student loan borrowers so much money.”

The CFPB sued Navient in 2017, when the company was largest student loan servicer in the United States. The company recently reached a settlement that includes restitution and a permanent ban from servicing federal Direct Loans.

“In many ways they turned into a monster, becoming a profitable engine, often when students defaulted on their student loans,” Chopra said.

Chopra said it’s possible Navient was not the only bad actor in student loans.

“We are worried that others in the student loan servicing industry are not fessing up to borrowers about their options to avoid default.”

Chopra said eventually, victims will receive checks from the company, even if their loan came years ago from Sallie Mae.

“A decade of loans. So we expect people across the country, potentially hundreds of thousands of people to benefit from this.”

The settlement still needs to be approved by the federal court where the original lawsuit was filed.

Anyone expecting a check from Navient can monitor the situation on the Consumer Financial Protection Bureau’s Website.

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