US consumer watchdog moves to permanently ban Navient from federal student loan servicing

AP Business Writer

NEW YORK (AP) — The U.S. Consumer Finance Protection Bureau has filed a proposed order to permanently ban Navient from directly servicing federal student loans, which the agency says will end years of abusive lending practices. Under terms of the order, which Navient agreed to without admitting any wrongdoing, the Virginia-based financial services company would also have to pay a $20 million penalty and provide another $100 million in relief to impacted borrowers. In a 2017 lawsuit, the CFPB accused Navient of steering those struggling with their debts into higher-cost repayment plans, or long-term forbearance, and failing to properly process payments. Today, Navient maintains that it is no longer a servicer or purchaser of federal student loans, with its direct servicing contract ending in 2021.