Navient agrees to pay $120 million to settle charges of misleading student loan borrowers by the CFPB.

• The Consumer Financial Protection Bureau has reached a $120 million settlement with Navient over its practices with student loan borrowers, Navient tells CNBC.
• In 2017, Navient was sued by the CFPB for providing borrowers with incorrect information and misleading them.
• Navient shares were trading more than 1% lower Thursday morning.

The student loan giant has agreed to a $120 million settlement with the Consumer Financial Protection Bureau regarding its treatment of student loan borrowers, as announced to CNBC.

In 2017, Navient was sued by the CFPB for providing borrowers with misleading information and causing them to pay more than they should have.

Currently, the lender is the largest student loan servicer in the U.S., overseeing the accounts of over 12 million individuals.

In 2021, Navient ceased servicing federal student loans and has agreed not to resume servicing them.

Navient's stock was trading down more than 1% before the market opened on Thursday morning.

Navient has agreed to pay $100 million to customers affected by their practices, as determined by the CFPB.

The remaining $20 million will be allocated to the CFPB's civil penalty fund.

CFPB Director Rohit Chopra stated that Navient's top executives have profited handsomely by exploiting students and taxpayers for years.

The CFPB will put an end to years of abuse by banning the notorious student loan giant from federal student loan servicing and ensuring the winddown of these operations, as stated by Chopra.

Navient framed the agreement as a positive step for the company.

"This agreement resolves decade-old issues, as stated by a Navient spokesperson in a CNBC statement. Although we do not concur with the CFPB's accusations, this settlement aligns with our future plans and marks a significant milestone in our company's transformation."

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