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Navient banned from federal student loan servicing. Will pay borrowers $100 million in compensation.
Navient is barred from federal student loan servicing and has to pay $120 million in fines and compensation to the borrowers harmed by its practices, according to a proposed settlement with the Consumer Financial Protection Bureau.
The accord announced Thursday comes nearly eight years after the CFPB sued Navient, formally known as Sallie Mae. Navient directed student loan borrowers into more costly repayment plans and away from lower-cost income-based choices, an investigation by the CFPB found. Navient is looking at paying $100 million to be dispersed among hundreds of thousands of borrowers and $20 million in fines.
The proposal brings an end to litigation initially filed by the federal watchdog in 2017 in federal court in Pennsylvania. The company was then the country’s biggest servicer of student loans, overseeing more than 12 million borrowers, noted the CFPB. The loan-servicing giant allegedly mismanaged payment processing, hurting the credit of disabled borrowers whose loans had been discharged, the agency contended.
“Today we are closing the book on Navient, one of the worst offenders in the student loan servicing industry, and a company that has harmed millions of borrowers across the country,” CFPB Director Rohit Chopra told reporters on Thursday.
Navient not longer buys or services federal student loans after transferring its contract to another company in 2021.
“While we do not agree with the CFPB’s allegations, this resolution is consistent with our go-forward activities and is an important positive milestone in our transformation,” the Herndon, Virginia-based company said Thursday in a statement. It agreed earlier in the year to outsource student loan servicing of certain legacy portfolios.
“For years, Navient’s top executives profited handsomely by exploiting students and taxpayers,” Chopra said in a statement. “By 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.”
The deal means hundreds of thousands of people will be compensated, a CFPB official said during a press call.
The settlement is not a first for the company. In 2022, it reached a $1.85 billion accord with 39 states and agreed to cancel about 66,000 student loans to settle claims it engaged in predatory lending practices.
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Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Yellowstone National Park, Wyo. — A New Hampshire woman suffered severe burns on her leg after hiking off-trail in Yellowstone National Park and falling into scalding water in a thermal area near the Old Faithful geyser, park officials said.
The 60-year-old woman from Windsor, New Hampshire, along with her husband and their leashed dog were walking off a designated trail near the Mallard Lake Trailhead on Monday afternoon when she broke through a thin crust over the water and suffered second- and third-degree burns to her lower leg, park officials said. Her husband and the dog weren’t injured.
The woman was flown to Eastern Idaho Regional Medical Center in Idaho Falls, Idaho for treatment.
National Park Service / Jacob W. Frank
Park visitors are reminded to stay on boardwalks and trails in hydrothermal areas and exercise extreme caution. The ground in those areas is fragile and thin and there’s scalding water just below the surface, park officials said.
Pets are allowed in limited, developed areas of Yellowstone park but are prohibited on boardwalks, hiking trails, in the backcountry and in thermal areas.
The incident is under investigation. The woman’s name wasn’t made public.
This is the first known thermal injury in Yellowstone in 2024, park officials said in a statement. The park had recorded 3.5 million visitors through August this year.
Hot springs have injured and killed more people in Yellowstone National Park than any other natural feature, the National Park Service said. At least 22 people have died from hot spring-related injuries in and around the 3,471-square-mile national park since 1890, park officials have said.