Borrowers Start Receiving Payments from Navient Student Loan Settlement

Thousands of student loan borrowers are finally receiving long-awaited payments associated with a landmark settlement with Navient, which used to be one of the nation’s largest student loan servicing companies.

The federal Consumer Financial Protection Bureau (CFPB) reached a settlement agreement with Navient in 2024 over allegations of unfair, deceptive or unlawful servicing practices. As part of that agreement, covered borrowers were supposed to receive monetary payments, potentially totaling $100 million.

“I applaud the CFPB for obtaining concrete relief for borrowers and deterring similar failures in the future,” said U.S. Under Secretary of Education James Kvaal in the 2024 announcement of the settlement. 

“Today’s action builds on the Biden-Harris Administration’s work to hold loan servicers accountable and protect borrowers, including more than 1 million borrowers who have received debt relief by fixing past failures to properly track progress toward forgiveness, such as correcting harms from forbearance steering.”

But it took until now for those payments to finally be issued. The development comes as the CFPB faces serious headwinds after the Trump administration took steps to significantly diminish the agency and limit its ability to undertake further enforcement actions, including against student loan companies. 

Here’s what borrowers should know.

CFPB allegations against Navient led to landmark settlement

The CFPB first took legal action against Navient in 2017, alleging that the servicer had engaged in widespread unfair or unlawful practices that harmed student loan borrowers. 

“The CFPB sued Navient for failing borrowers at every stage of repayment,” said the federal watchdog agency in a statement in 2024. “The lawsuit alleges that Navient steered borrowers who may have qualified for income-driven repayment plans into forbearance instead. This practice was cheaper and simpler for Navient, but detrimental to borrowers. By steering struggling borrowers into forbearance – where interest continues to accrue and capitalize – Navient’s illegal actions led numerous borrowers to pay additional interest charges. Navient is a repeat offender with a long history of regulatory violations.”

The CFPB accused Navient of violating the Consumer Financial Protection Act, the Fair Credit Reporting Act and the Fair Debt Collection Practices Act by misleading borrowers about income-driven repayment (IDR) plans, making mistakes processing payments, misreporting some student loan accounts to credit bureaus and misleading student loan borrowers about the requirements for cosigner releases on private student loans.

The CFPB’s enforcement action culminated in a settlement agreement whereby Navient would be banned from servicing most federal student loans and would be required to pay a $20 million penalty to the CFPB and provide $100 million “in redress for harmed borrowers.”

Navient made no admission of wrongdoing in the CFPB’s settlement and has consistently rejected the allegations leveled against the company.

“This agreement puts these decade-old issues behind us,” said a spokesperson for Navient in a statement in 2024 when the settlement was announced. “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 of the company.”

Navient settlement payments are finally going out to student loan borrowers

It took more than a year for payments associated with the Navient settlement to finally start being sent out to borrowers by the CFPB. This month, borrowers began to receive these payments.

“A lawsuit was brought by the Consumer Financial Protection Bureau (CFPB) against the companies, Navient Corporation, Navient Solutions, LLC, and Pioneer Credit Recovery, Inc,” explained the CFPB in a new bulletin on its website last week. “The CFPB alleged the Navient companies illegally steered borrowers into forbearance, instead of income-driven repayment plans. The CFPB also alleged that Pioneer Credit Recovery, Inc. gave wrong information to credit reporting companies about some discharged student loans. Affected consumers are receiving a check because of a settlement in this lawsuit. The payments do not change or reduce any student loans affected consumers may have, and they should continue to work with their student loan servicers.”

Checks are being sent directly to covered student loan borrowers by mail as of February 13, 2026. Relief disbursement is ongoing.

“The CFPB has contracted Rust Consulting to administer payments for this case and answer consumers' questions,” said the CFPB on its website, which provides contact information for student loan borrowers who want to submit inquiries, including student loan complaint filing guidance.

CFPB enforcement has been reduced by the Trump administration

The Navient settlement payment checks being sent to student loan borrowers come as the Trump administration has taken steps to severely curtail the CFPB’s enforcement capabilities. Since President Trump took office, the CFPB has experienced staff reductions, funding cuts and directives to cease many of its oversight, regulatory and enforcement actions against much of the financial services industry.

“Trump’s acting Consumer Financial Protection Bureau (CFPB) director, Russell Vought, has repeatedly attempted to gut the only federal consumer financial law enforcement agency, including by dismantling its enforcement program,” said Protect Borrowers and the Consumer Federation of America in a joint memo last fall. 

“The Trump-Vought CFPB has permanently dismissed 22 of the Bureau’s public enforcement actions that were pending at the time Trump took office, pardoning egregious repeat offender banks and corporations and sending the message that lawbreaking and corporate misconduct will be tolerated. Even more alarming are the Trump-Vought CFPB’s recent efforts to abolish or modify orders in at least 20 settled actions where the lawbreaking companies agreed to compensate victims and pay fines for their misconduct. In some of those actions, the CFPB is seeking to reward the lawbreakers by returning or reducing the companies’ civil money penalties, rather than make the victims whole. Critically, these penalties flow into a fund for scammed and defrauded victims of illegal conduct nationwide. Trump and Vought are abandoning the consumers they are required to protect.”

Consumer rights and student loan borrower advocacy organizations have defended the agency, which was created in the wake of the 2008 financial crisis, as a key bulwark against unfair and deceptive practices, including for student loan servicing and home mortgages.

“A primary cause of [the 2008 financial] catastrophe, and reason for the Bureau’s creation, was failure by federal regulators to protect consumers,” said the Center for Responsible Lending in an op-ed last week. “The Bureau successfully implemented reforms that prevent lenders from trapping borrowers in unaffordable home loans. This implementation has helped prevent avoidable foreclosures, abusive treatment of borrowers, and another housing market collapse. Americans have seen this movie before and don’t want the sequel.”

Ultimately, as student loan borrowers continue to struggle with ever-changing repayment plan options and defaults on student loans spike, the lack of oversight and enforcement by a key federal agency may pave the way for more companies to take advantage of the situation.