India, March 14 -- Thousands of former federal student loan borrowers in the United States may soon receive settlement checks worth up to $2,000 following a legal case involving major loan servicer Navient.

According to a report by Newsweek, the payments stem from a lawsuit filed by the Consumer Financial Protection Bureau, which accused the company of improperly steering struggling borrowers into forbearance programs instead of directing them toward more affordable repayment options.

Navient denied the allegations but agreed to a settlement that includes $100 million in refunds for borrowers and a $20 million penalty.

The CFPB alleged that Navient placed borrowers into forbearance, a temporary pause on loan payments where interest con...