Research Update: Navient Corp. Upgraded To 'BB' After Resolving CFPB Litigation With Manageable Financial Penalty; Outlook Stable

On Sept. 12, 2024, Navient reached an agreement with the Consumer Financial Protection Bureau (CFPB) to resolve its previously disclosed litigation from 2017, which alleged the company steered borrowers with long-term financial hardship into forbearance, instead of income-driven repayment plans, among other complaints. As part of the agreement, Navient will pay a penalty of $20 million, plus additional monetary relief and redress of $100 million to a population of borrowers determined by the CFPB. Additionally, the company also agreed to not re-enter servicing federal student loans and not acquire any additional ownership interest in Federal Family Education Loan Program (FFELP) loans. We view the combined impact of the settlement to have no material effect on its business operations. As a

...- On Sept. 12, 2024, Navient reached an agreement with the Consumer Financial Protection Bureau (CFPB) to resolve its previously disclosed litigation from 2017, which alleged the company steered borrowers with long-term financial hardship into forbearance, instead of income-driven repayment plans, among other complaints. - As part of the agreement, Navient will pay a penalty of $20 million, plus additional monetary relief and redress of $100 million to a population of borrowers determined by the CFPB. Additionally, the company also agreed to not re-enter servicing federal student loans and not acquire any additional ownership interest in Federal Family Education Loan Program (FFELP) loans. We view the combined impact of the settlement to have no material effect on its business operations. - As a result, we raised our long-term issuer credit rating and unsecured debt rating by one notch to '##' and '##-', respectively. We also affirmed the short-term issuer credit rating at 'B'. - The stable...

Research Update