Education Justice Victory: CFPB Bans Navient, $7.5B Borrower Defense Relief for 264K Students

The Consumer Financial Protection Bureau delivered historic enforcement against predatory student lenders, permanently banning Navient from federal loan servicing and securing $7.5 billion in relief for students defrauded by for-profit colleges.

Navient: Permanently Banned from Federal Loan Servicing

The CFPB achieved a landmark victory against Navient, one of the largest student loan servicers in the country.

What Navient Did Wrong

• •Steered borrowers into forbearance instead of income-driven repayment
• •Denied access to affordable plans to maximize interest charges
• •Provided inaccurate information about repayment options
• •Failed to inform borrowers about Public Service Loan Forgiveness eligibility
• •Applied payments incorrectly, extending loan terms
• •Charged improper fees

Penalties and Relief

| Component | Amount | |-----------|--------| | Civil penalty | $20 million | | Borrower redress | $100 million | | Total | $120 million |

Plus: Permanent ban from servicing federal student loans.

Who is Affected

If you had loans serviced by Navient, you may be entitled to:

• •Refund of improper fees charged
• •Account correction for misapplied payments
• •Credit reporting corrections
• •Forgiveness if steered into inappropriate plans

Sweet v. Cardona: $7.5 Billion Class Action Victory

The largest student debt relief settlement in history delivered $7.5 billion to approximately 264,000 borrowers.

What the Settlement Covers

Borrowers who had pending Borrower Defense to Repayment applications against schools that:

• •Made false job placement claims
• •Lied about program accreditation
• •Misrepresented credit transferability
• •Used deceptive recruiting practices
• •Failed to deliver promised education

Schools Covered

Major for-profit chains included:

• •Corinthian Colleges
• •ITT Technical Institute
• •DeVry University
• •Westwood College
• •Art Institutes
• •And many others

Automatic Relief

If you were part of the class:

• •No action required - relief is automatic
• •Loans discharged in full
• •Refund of payments made
• •Credit reporting corrected

Corinthian Colleges: $480+ Million Forgiveness

CFPB enforcement against Corinthian Colleges resulted in massive loan forgiveness.

Corinthian's Predatory Practices

• •False job placement rates: Claimed 70-90% when actual rates far lower
• •Deceptive career services: Promised job assistance that never materialized
• •Targeting vulnerable students: Military, single parents, low-income communities
• •High-pressure recruiting: Commission-based recruiters with enrollment quotas
• •Worthless credentials: Degrees that employers wouldn't recognize

Student Relief

• •$480+ million in federal loan forgiveness
• •Covers all Corinthian-related federal loans
• •Automatic for identified borrowers
• •Application process for others

Understanding Borrower Defense to Repayment

What It Is

A federal regulation allowing student loan forgiveness when schools engaged in fraud or misrepresentation.

Qualifying Circumstances

Your school may have violated borrower defense rules if they:

• •Made false claims about job placement
• •Fake employment statistics
• •Counting any job as "placement"
• •Using outdated or falsified data

• •Misrepresented accreditation
• •Claimed recognized accreditation that didn't exist
• •Implied credits would transfer when they wouldn't
• •Said degrees qualified for licensure when they didn't

• •Used deceptive recruiting
• •Made false promises to enroll you
• •Lied about program costs
• •Misrepresented financial aid

• •Failed to provide promised education
• •Eliminated programs before completion
• •Didn't deliver promised resources
• •Significantly changed curriculum

How to Apply

Online: studentaid.gov/borrower-defense Required Information:

• •School name and dates attended
• •Description of misrepresentations
• •Evidence if available (not required)
• •Explanation of harm suffered

Income-Driven Repayment Plans

Your Rights

All federal student loan borrowers can access income-driven repayment:

| Plan | Payment Cap | Forgiveness Timeline | |------|-------------|---------------------| | SAVE (new) | 5-10% discretionary income | 10-20 years | | IBR | 10-15% discretionary income | 20-25 years | | PAYE | 10% discretionary income | 20 years | | ICR | 20% discretionary income | 25 years |

Benefits

• •Payments based on what you can afford
• •$0 payments if income below threshold
• •Interest subsidies on subsidized loans
• •Forgiveness after payment period

How to Enroll

• •Visit studentaid.gov/idr
• •Complete application (takes 10 minutes)
• •Recertify annually
• •Continue payments until forgiveness

Public Service Loan Forgiveness (PSLF)

Eligibility Requirements

• •Work for qualifying employer (government, 501(c)(3) nonprofit)
• •Full-time employment (30+ hours/week)
• •Federal Direct Loans only
• •Income-driven repayment plan
• •120 qualifying payments

Recent Improvements

• •Limited PSLF Waiver (expired but check if you qualified)
• •Simplified certification process
• •Expanded qualifying payments recognition
• •Faster processing times

Apply at studentaid.gov/pslf

Predatory Lending Warning Signs

Red Flags in Student Loans

Watch for these practices:

• •High-pressure tactics to sign immediately
• •Promises that seem too good to be true
• •Reluctance to explain terms clearly
• •Steering away from federal loans to private
• •Hidden fees or costs
• •Commission-based loan officers

For-Profit College Warning Signs

• •Aggressive recruiting, especially targeting military
• •Promises of job placement without data
• •Accreditation from unknown organizations
• •Pressure to enroll immediately
• •Difficulty getting straight answers about costs
• •High student loan default rates

Filing Complaints

CFPB Consumer Complaint

For issues with loan servicers:

• •Online: consumerfinance.gov/complaint
• •Phone: (855) 411-2372
• •Deadline: None (but file promptly)

Department of Education

For school-related issues:

• •Borrower Defense: studentaid.gov/borrower-defense
• •Closed School Discharge: If school closed while enrolled
• •False Certification: If school falsely certified your eligibility

State Attorney General

Many states have student loan protection:

• •Student borrower advocacy units
• •For-profit college investigations
• •Loan servicer oversight

Current Enforcement Challenges

CFPB Under Attack

• •Lawsuit challenging CFPB funding (Supreme Court upheld 2024)
• •PHEAA lawsuit withdrawn despite strong case
• •Reduced enforcement resources
• •Political pressure on consumer protection

What This Means for Borrowers

• •File complaints to support enforcement priorities
• •Document all servicer issues
• •Consider private attorneys for significant harm
• •Support consumer protection advocacy

Resources

Federal Resources

• •Federal Student Aid: studentaid.gov
• •PSLF Help Tool: studentaid.gov/pslf
• •Loan Simulator: studentaid.gov/loan-simulator
• •Borrower Defense: studentaid.gov/borrower-defense

Advocacy Organizations

• •Student Borrower Protection Center: protectborrowers.org
• •National Consumer Law Center: nclc.org
• •Student Debt Crisis Center: studentdebtcrisis.org

Legal Help

• •Legal Aid: Search local legal aid organizations
• •Student Loan Lawyers: Many work on contingency
• •State Bar Referral: Lawyer referral services

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The $7.5 billion Sweet v. Cardona settlement and Navient's permanent ban prove accountability is possible. If your school defrauded you or your servicer mistreated you, file complaints and apply for relief—you may be entitled to loan forgiveness.