The Consumer Financial Protection Bureau issued a $120 million enforcement order that requires $100 million in direct payments to harmed borrowers and a $20 million civil penalty. Payments from the redress pool began on February 13, 2026. Most eligible borrowers will receive funds automatically without filing a claim. Rust Consulting, the court-appointed administrator, is handling distribution and inquiries.
This report describes who is likely to receive payments, the harms the CFPB found, how payments are being delivered, and practical steps borrowers should take to confirm and protect their funds. It also explains how this action differs from prior Navient settlements and what the permanent servicing ban means for federal loan accounts.
Background: why the CFPB took action
The bureau’s complaint, filed in, alleges a multi-year pattern of operational choices that prioritized servicer workflows over borrowers’ financial outcomes. The agency says those practices affected millions of federal loan accounts and prompted the enforcement order outlined above.
Specifically, the complaint cites several recurring failures. It alleges Navient steered struggling borrowers into long-term forbearance instead of enrolling eligible borrowers in income-driven repayment plans. It alleges payments were misapplied across loan portfolios and that the servicer reported inaccurate information to credit bureaus. The agency also alleges Navient provided misleading guidance to cosigners about release procedures. According to the complaint, these practices can increase borrowers’ balances by capitalizing unpaid interest and can harm credit histories, raising long-term repayment costs.
Who is eligible and how payments are distributed
Following the bureau’s findings, eligibility is limited to borrowers whose federal student loans were serviced by the company during the period cited in the court order and who suffered one or more harms identified by the agency. Typical qualifying harms include repeated or extended placements into forbearance when an income-driven repayment plan would have been appropriate, payments applied to the wrong loans, incorrect credit reporting, and communications that impeded cosigner release.
Payments will be distributed to eligible borrowers after an administrative review determines the nature and extent of harm. The amount each borrower receives will reflect documented harm, the duration of improper servicing, and any resulting financial consequences such as unpaid interest capitalization or adverse credit effects. Distributions will not be uniform; they will be proportional to the assessed injury.
Borrowers may be required to verify identity and provide supporting documents to confirm enrollment status, payment histories, or communications with the servicer. The claims process will specify acceptable documentation and the method for submitting claims or confirming automatic identification.
The notice to affected borrowers will explain next steps, methods of payment, and timelines for distribution. Recipients should monitor official communications from the claims administrator and federal agencies, and maintain records of recent loan statements and correspondence to facilitate any verification requests.
Following the bureau’s outreach to the claims administrator and federal agencies, the distribution will not proceed as a traditional claims-driven class action. Instead, the Consumer Financial Protection Bureau and its contractor used Navient’s servicing records to identify affected borrowers. The claims administrator, Rust Consulting, began mailing checks on February 13, 2026. For most eligible individuals, no claim form is required.
Borrowers should keep recent loan statements and correspondence to facilitate any verification requests. If an individual expects a payment but does not receive one, Rust Consulting can be contacted using the telephone number included with the settlement materials or other official notices.
What kinds of loans and timelines are covered
The Consumer Financial Protection Bureau ordered monetary redress for borrowers harmed by Navient’s servicing practices. The remedy covers federal loans Navient serviced under Department of Education contracts, including Direct Loans and certain Federal Family Education Loan (FFEL) accounts that Navient or predecessor entities managed. The bureau did not cancel or reduce outstanding loan balances as part of this order. Instead, the action provides payments to compensate for past servicing harms. Borrowers who obtained relief through other actions may remain eligible for these payments if they suffered separate harms addressed by the CFPB order.
Practical steps for borrowers
If you believe Navient once serviced your loans, monitor postal and electronic mail for correspondence from Rust Consulting, the settlement administrator. Legitimate notices will not demand payment to receive funds, request bank login credentials, or instruct you to wire money to unlock a payment. The CFPB and the settlement administrator will not charge fees to distribute redress. Any request for upfront payment or access to sensitive accounts should be treated as a likely scam.
Use the telephone number included with official settlement materials or other notices to verify communications. Do not call numbers provided in suspicious messages. Keep records of any correspondence and consult the settlement administrator or the CFPB for verification before providing personal or financial information.
Before taking further steps, verify any communication with the settlement administrator or the CFPB to confirm legitimacy.
Beyond monitoring incoming mail, log in to StudentAid.gov or your loan servicer’s portal to verify current servicer information and confirm account status. If you struggle to manage payments, ask your servicer about enrolling in an income-driven repayment plan rather than using forbearance. Forbearance can allow interest to capitalize and raise the total amount repaid.
When to seek help
If you find incorrect credit reporting, misapplied payments, or unresolved cosigner release issues tied to prior servicing, keep detailed records of all communications. Contact a federal student loan ombudsperson or a consumer protection attorney if issues remain unresolved.
Direct any questions about the settlement payment to the official settlement administrator. Do not rely on unknown third parties that offer to expedite payments or claim funds for a fee.
The CFPB’s order also imposes a permanent ban preventing Navient from servicing federal Direct Loans. This structural remedy eliminates the company’s ability to return to federal loan servicing. Regulators said the ban reduces the chance that similar harms will recur under the same servicer.
Key takeaways: the CFPB ordered $120 million in relief, including $100 million designated for borrower redress. Payments began on February 13, 2026. Most eligible recipients will receive checks automatically from Rust Consulting. Borrowers should remain vigilant for scams and verify unexpected correspondence with the settlement administrator or the CFPB before sharing personal information.