Sun Sep 15 12:52:26 UTC 2024: ## Navient Banned From Student Loan Servicing, Ordered to Pay $120 Million Settlement
**Washington D.C. -** In a significant development, Navient, formerly the largest student loan servicer in the United States, has been permanently banned from federal student loan servicing. This decision comes after a lawsuit alleging the company engaged in deceptive and unfair practices.
The U.S. Department of Education (ED) and 39 state attorneys general reached a $120 million settlement with Navient, forcing the company to pay restitution to borrowers harmed by its practices. The settlement also includes a permanent ban on Navient from servicing federal student loans.
The lawsuit accused Navient of misleading borrowers about their repayment options and encouraging them to enroll in forbearance, a temporary postponement of payments that can lead to higher interest accumulation. The company was also accused of directing borrowers to costly private loan options instead of exploring federal loan programs.
“This settlement will provide much-needed relief to borrowers who were harmed by Navient’s unfair and deceptive practices,” said Attorney General Merrick Garland. “The Department of Education will continue to hold student loan servicers accountable for their actions.”
The settlement is expected to affect millions of borrowers. Navient will be required to provide debt relief to those who were unfairly placed in forbearance, along with offering restitution to borrowers who were misled about their repayment options.
This action marks a significant victory for student borrowers and reinforces the government’s commitment to protecting consumers in the student loan market.
First Piper 