Checks for student-loan borrowers are going out after a $100 million settlement with a major lender

"The Consumer Financial Protection Bureau - a federal watchdog - announced that on February 13, checks began going out in the mail to student-loan borrowers who qualified for a portion of the settlement the agency reached with major lender Navient in 2024. The settlement resolved claims from a 2017 lawsuit that accused the servicer of misleading borrowers about their repayment plan options, leaving them "cheated" out of lower monthly payments."

"The payments are ongoing, and the CFPB has contracted with Rust Consulting - a firm that manages settlements - to administer them. The CFPB said in its latest announcement that the payments do not reduce any student loans that borrowers currently have. "I think there's been millions of Americans who could have avoided the consequences of default if they had been treated properly by their servicer," Former CFPB Director Rohit Chopra told Business Insider in 2024 after the settlement was announced."

"Student-loan borrowers, check the mail: there might be some money waiting for you. In addition to misleading borrowers about their payment plans, the CFPB accused Navient in its lawsuit of making errors in processing borrowers' payments, failing to deliver relief to defaulted borrowers, and misrepresenting cosigner requirements for taking out loans. The settlement permanently banned Navient from servicing federal student loans and required it to return $100 million to borrowers."

Student-loan borrowers began receiving checks on February 13 from a $100 million settlement with Navient. The settlement resolved claims from a 2017 lawsuit accusing Navient of misleading borrowers about repayment-plan options and depriving them of lower monthly payments. The settlement permanently banned Navient from servicing federal student loans and required repayment to affected borrowers. The CFPB contracted Rust Consulting to administer ongoing payments and said the payments do not reduce borrowers' current loan balances. The CFPB also accused Navient of errors processing payments, failing to provide relief to defaulted borrowers, and misrepresenting cosigner requirements. Navient disputed the CFPB's allegations.

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