Which Navient student loan borrowers may be eligible for relief under the $120 million settlement?

• Navient may compensate hundreds of thousands of borrowers after reaching a $120 million settlement with the Consumer Financial Protection Bureau.
• Mark Kantrowitz, a higher education expert, stated that the CFPB has not specified who will be eligible for consumer redress.
• Kantrowitz stated that there are some clues in the settlement regarding eligibility.

Navient, a student loan giant, reached a $120 million settlement with the Consumer Financial Protection Bureau, which could result in compensation for hundreds of thousands of borrowers.

Navient has been banned from servicing federal student loans after being accused by the CFPB of steering borrowers into expensive forbearances, miscalculating their bills, and damaging their credit reports.

A Navient spokesperson said the company disagreed with the consumer watchdog's charges.

The CFPB will receive $20 million from the $100 million settlement to fund its civil penalties, while the remaining $80 million will be used to compensate impacted customers.

Here's what to know about the bureau's upcoming relief.

Who may qualify for the checks

Mark Kantrowitz, a higher education expert, stated that the CFPB has not specified who will be eligible for consumer redress.

Some clues in the settlement may indicate who will receive the checks, he stated.

Your student loan servicer must have been or currently is Navient, and some borrowers who were serviced by the company when it was known as Sallie Mae will also qualify.

In 2021, Maximus Aidvantage took over Navient's federal student loan accounts.

The Federal Reserve's rate cut may not provide "immediate relief."

The CFPB could consider offering relief to Navient borrowers who experienced certain difficulties, as suggested by Kantrowitz.

• Charged fees to enter a forbearance
• Charged multiple late fees for a single delayed payment
• Were denied access their loan payment history when requested
• Incorrect information was obtained regarding the Public Service Loan Forgiveness program and their qualification for relief.
• Without being informed about other affordable repayment options, borrowers were directed towards interest-accruing forbearances or deferments.

Borrowers may not need to apply for relief

Eligible borrowers will likely be automatically identified, according to Kantrowitz.

That means borrowers shouldn't have to do anything to get the compensation.

The CFPB also warned people not to fall for scams during this time.

The CFPB will never request payment from consumers for redress, and we will not request additional information before issuing a redress check.