Navient Corporation, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc.
On January 18, 2017, the Bureau filed a complaint against Navient Corporation and its subsidiaries, Navient Solutions, LLC (Navient Solutions), and Pioneer Credit Recovery, Inc. (Pioneer). Navient Corporation is a nonbank that owns and services student loans. The Bureau alleged that Navient Solutions and Navient Corporation: (1) engaged in abusive and unfair acts and practices in violation of the Consumer Financial Protection Act of 2010 (CFPA) by steering borrowers experiencing long-term financial hardship into forbearance, a costly option designed for borrowers experiencing short-term financial hardship, instead of adequately advising them about more beneficial income-driven repayment plans; (2) engaged in unfair acts and practices in violation of the CFPA by failing to adequately notify borrowers who enrolled in an income-driven repayment plan about the requirement to annually recertify their income and family size as required under the plan; (3) engaged in deceptive acts and practices in violation of the CFPA by misleading borrowers about the consequences of submitting an incorrect or incomplete application to recertify their income and family size under an income-driven repayment plan; (4) engaged in deceptive acts and practices in violation of the CFPA by misleading private student loan borrowers about requirements to release their co-signer from the loan; (5) engaged in unfair acts and practices under the CFPA by making numerous payment processing errors, including by misallocating and misapplying borrower payments; and (6) violated the Fair Credit Reporting Act’s implementing Regulation V by failing to establish and implement reasonable written policies and procedures to furnish accurate information to credit reporting agencies regarding borrowers who had received a discharge on their federal loans due to a total and permanent disability. The Bureau also alleged that Pioneer and Navient Corporation engaged in deceptive acts and practices in violation of the CFPA and Fair Debt Collection Practices Act by misleading borrowers about the effect of loan rehabilitation on their credit reports and the collection fees that would be forgiven in the federal loan rehabilitation program. On March 24, 2017, Navient moved to dismiss the complaint, which the court denied on August 4, 2017. On July 10, 2020, Navient filed a motion for judgment on the pleadings, which the court denied on January 13, 2021. On September 12, 2024, the court entered a stipulated judgment and order, which requires defendants to pay $100 million in consumer redress and a $20 million penalty. The order also, among other requirements, permanently bans Navient from servicing Direct Loans, prohibits Navient from conducting consumer-facing servicing activities for Federal Family Education Loan Program (FFELP) loans, and permanently bans Navient from acquiring additional FFELP loans.
Related documents
Stipulated Final Judgment and Order