CFPB Bans Navient From Federal Student Loans, Sets Fine (1)

Navient Corp. will be banned from servicing federal student loans and must pay $120 million under a proposed settlement with the Consumer Financial Protection Bureau.

An investigation found Navient steered student-loan borrowers into more expensive repayment options and deprived them from more affordable income-driven plans, the CFPB said in a statement Thursday. Navient will have to pay a $20 million penalty and $100 million to harmed borrowers.

The proposed settlement ends litigation originally filed by the CFPB in 2017 in the US District Court for the Middle District of Pennsylvania. At that time, Navient was the largest student-loan servicer in ...