Some Student Loan Borrowers Are Getting $2,000 'Surprise Checks' From an Old Navient Lawsuit

Some federal student loan borrowers are getting checks in the mail of up to $2,000, seemingly out of the blue.

But it’s no mistake. The payments are part of a years-old lawsuit between the Consumer Financial Protection Bureau (CFPB) and the student loan servicer Navient. In a 2024 settlement, the CFPB under former President Joe Biden ordered Navient — formerly known as Sallie Mae — to pay $120 million for alleged misconduct that harmed borrowers. The settlement also banned the company from servicing most federal student loans, though by that time the company had voluntarily pulled back on servicing.

Of that penalty, $100 million is earmarked for direct redress to impacted borrowers. The CFPB, now under President Donal Trump, began sending out settlement checks from Navient as early as Feb. 13, according to an update on the agency's website.

“Affected consumers are receiving a check because of a settlement in this lawsuit,” the CFPB update states. “The payments do not change or reduce any student loans affected consumers may have, and they should continue to work with their student loan servicers.”

Neither the CFPB nor Rust Consulting, the company responsible for administering the settlement, responded to Money’s request for comment.

What to know about the Navient lawsuit

The CFPB v. Navient lawsuit was initiated in January 2017 and settled in September 2024, but the redress payments have just started going out.

In the lawsuit, the CFPB alleged that Navient “illegally steered borrowers into forbearance, instead of income-driven repayment plans.” During the forbearances, borrowers’ payments were paused, but they racked up interest on their loans and did not receive any benefits they would have gotten under an income-driven repayment plan. Most notably, they missed out on making accruing payments that could have counted toward forgiveness under the income-driven plans, which allow for borrowers' remaining balances to be canceled after completing a couple decades of payments.

“This practice was cheaper and simpler for Navient, but detrimental to borrowers,” the CFPB said at the time.

The agency also alleged that a Navient subsidiary provided incorrect credit reporting information on some borrowers, hurting their credit in the process.

Navient denied any wrongdoing but agreed to the settlement and fines. Payouts through the CFPB's consumer redress fund are not class-action, and affected borrowers retain the right to to pursue independent legal action against Navient.

How to get the Navient settlement payment

Borrowers potentially eligible for relief include those whose loans were serviced by Navient or Sallie Mae in 2017 or earlier. (Note that Sallie Mae split into two companies in 2014, after which Sallie Mae focused on new private student loan originations, while Navient focused on servicing loans.) The CFPB did not respond to Money’s request for how many borrowers are expected to receive settlement payments.

However, when the settlement was announced in 2024, Biden officials said that hundreds of thousands of borrowers would receive checks.

In most cases, borrowers are identified automatically and won’t have to act to receive the payment, which could range from $50 to $2,000.

While the automatic payment method helps ensure eligible borrowers are paid, it’s also causing several borrowers to question the "surprise checks” on social media, skeptical of the check’s legitimacy as well as the lack of information from the CFPB about eligibility.

For questions about the settlement, the CFPB is directing borrowers to the settlement administration, Rust Consulting, and a toll free number:

• Call:1-800-711-8418 (toll-free)
• Email: navient_info@rustcfpbconsumerprotection.org
• Write: CFPB v Navient
  P.O. Box 2561
  Faribault, MN 55021-9561

The automated phone service states that it is currently only accepting calls from borrowers who have received a check.

For borrowers looking to check their eligibility, the operator says to call back starting March 30.

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