Navient Corporation is an American financial services company and former student loan servicer based in

Wilmington, Delaware Wilmington is the List of municipalities in Delaware, most populous city in the U.S. state of Delaware. The city was built on the site of Fort Christina, the first Swedish colonization of the Americas, Swedish settlement in North America. It lie ...

. The company was formed in 2014 by the split of

Sallie Mae SLM Corporation (commonly known as Sallie Mae; originally the Student Loan Marketing Association) is a publicly traded U.S. corporation that provides consumer banking. Its nature has changed dramatically since it was set up in the early 1970s; i ...

into two distinct entities: Sallie Mae Bank and Navient. The company employs 4,500 people at offices across the US. In 2018, Navient serviced a quarter of all student loans in the United States. In 2024, the company was barred from servicing federal student loans.

History

Navient was chartered in 1972 as a Government-Sponsored Enterprise (GSE) called Student Loan Marketing Association (nicknamed Sallie Mae). The company was created by Congress to support the student loan program established by the

Higher Education Act of 1965 The Higher Education Act of 1965 (HEA) () was legislation signed into Law of the United States, United States law on November 8, 1965, as part of President Lyndon Johnson's Great Society domestic agenda. Johnson chose Texas State University (t ...

. It was created mainly for two reasons: 1) to purchase student loans in the secondary market; and, 2) to securitize pools of student loans. The objective is to create liquidity for these loans to increase their value to lenders, reducing the costs to borrowers in the process. Sallie Mae's privatization began in 1997. In 2004, Sallie Mae's GSE charter dissolved and it became a private-sector company with an independent board. The

U.S. Department of Education The United States Department of Education is a United States Cabinet, cabinet-level department of the federal government of the United States, United States government, originating in 1980. The department began operating on May 4, 1980, havin ...

selected Sallie Mae in 2009 to service federal loans on its behalf. In 2010, Congress passed the

Health Care and Education Reconciliation Act of 2010 Health has a variety of definitions, which have been used for different purposes over time. In general, it refers to physical and emotional well-being, especially that associated with normal functioning of the human body, absent of disease, pai ...

, which eliminated the federally guaranteed loan program known as Federal Family Education Loan Program (FFELP), under which banks and companies like Sallie Mae made loans to college students backed by a federal guarantee. As a result, effective July 1, 2010, all federal loans were originated directly by the U.S. Department of Education. Currently, there is no existing government-sponsored entities that provide securitization of student loans. The company announced in 2013 its plans to separate into two publicly traded companies – an education loan management business to be launched with a new name – Navient – and a consumer banking business, which retained the name

. The spin-off was completed on April 30, 2014. In 2015, Navient attracted recognition from 2020 Women on Boards, the Women's Forum of New York, and the New York Stock Exchange Governance Services for gender diversity on its board of directors. The company acquired asset recovery and business process outsourcing firm, Gila LLC, and health care payments firm Xtend Healthcare. On September 28, 2021, Navient announced that they planned to cease servicing federal student loans. It initially asked to offload its responsibilities to another federal loan servicer, Maximus Inc. In October 2021, the Department of Education approved the plan for Navient to transfer outstanding Department of Education owned federal loans and select personnel to Maximus through a newly formed federal loan servicing unit called Aidvantage. In 2021, student loan borrowers filed a lawsuit against Navient in order to force the company into bankruptcy. In January 2022, a $1.85 billion settlement was announced between student loan borrowers and Navient. On October 17, 2022, the student borrowers won an injunction that barred the company from collecting payments for certain loans that were considered discharged in bankruptcy. In 2023, a Navient subsidiary

Earnest Earnest is a masculine given name and a surname which may refer to: Given name *Earnest Andersson (1878–1943), American polymath *Earnest Brown IV (born 1999), American football player *Earnest Byner (born 1962), American football player *Earne ...

began lending to international students. In May 2024, Navient agreed to outsource its student loan servicing operations to

MOHELA The Higher Education Loan Authority of the State of Missouri, also known as the Missouri Higher Education Loan Authority or MOHELA is one of the largest holders and servicers of student loans in the United States. Its headquarters are in St. Lo ...

. In September 2024, Navient was banned from servicing most federal student loans, as well as required to pay $20 million in fines and $100 million in compensation to borrowers, under a proposed settlement with the

Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an independent agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, Payday lo ...

(CFPB).

Corporate and financial

Navient trades on the Nasdaq stock exchange under the ticker symbol NAVI. As of 2015, Navient held the largest portfolio of education loans insurance or guaranteed under the Federal Family Education Loan Program, as well as the largest portfolio of Private Education Loans. Navient funds most of its operation by manufacturing

student loan A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest ...

asset-backed securities: bundling loans and selling them to investors as financial instruments. The SLABS are graded by bond-rating agencies such as Moody's Investor Services and

Fitch Ratings Fitch Ratings Inc. is an American credit rating agency. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission and is considered as being one of the " Bi ...

. The value of SLABS have been reduced as more students choose income-based repayment plans. As of June 2016, a majority of the SLAB tranches continue to be downgraded. In 2014,

Moody's Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histo ...

downgraded Navient's senior unsecured debt and corporate family ratings to Ba3 because of loss of earnings, cash flow, equity, and high leverage. Jack Remondi is the former CEO of Navient and has written and spoken about recommendations to improve the student loan program.

Lawsuits, investigations, settlements, and controversies

In August 2015, the CFPB, which had been investigating the company for nearly two years, sent Navient a letter telling its executives that the agency's enforcement staff had found enough evidence to indicate the company violated consumer protection laws. On May 28, 2015, the

United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the U.S. government that oversees the domestic enforcement of Law of the Unite ...

announced that nearly 78,000 military service members would begin receiving $60 million in compensation for being charged excess interest on their student loans by Navient. The company opted for this settlement to resolve the federal government's lawsuit alleging the company's violation of the rights of service members eligible for benefits and protections under the Service Members Civil Relief Act (SCRA). On March 14, 2016, Senator

Elizabeth Warren Elizabeth Ann Warren (née Herring; born June 22, 1949) is an American politician and former law professor who is the Seniority in the United States Senate, senior United States senator from the state of Massachusetts, serving since 2013. A mem ...

gave a speech in Congress qualifying Navient's service and subsequent contract award by the Department of Education as "an outrageous fiasco". Warren recommended "a total reform of

servicing to make sure that nothing as the Navient disaster ever happens again". In June 2016, stockholders filed a class action lawsuit against Navient. The plaintiffs included Chicago police officers and retired city employees in Providence, Rhode Island. On July 5, 2016, Guy Micciche filed a complaint against Navient in

U.S. District Court The United States district courts are the trial courts of the U.S. federal judiciary. There is one district court for each federal judicial district. Each district covers one U.S. state or a portion of a state. There is at least one feder ...

alleging that the debt collector contacted the plaintiff, several times, on his cellular phone using an automated dialing system. In the complaints, the plaintiff alleged that he told Navient to stop calling him, but that the company persisted. On January 18, 2017, the CFPB, along with the Attorneys General of Illinois, Pennsylvania, and Washington, filed a complaint against Navient in the United States District Court for the Middle District of Pennsylvania alleging violations of the

Fair Credit Reporting Act The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 ''et seq.'', is federal legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It was intended ...

and Fair Debt Collection Act. It alleged that Navient "systematically and illegally ailedborrowers at every stage of repayment" with "abusive interest charges, hurting disabled military veterans by making inaccurate reports to credit companies about them and making repayments harder than necessary." According to the court filing, * "Navient has failed to perform its core duties in the servicing of student loans, violating Federal consumer financial laws.... * "Navient systematically deterred numerous borrowers from obtaining access to some or all of the benefits and protections associated with these plans lans limiting repayment based on income Despite assuring borrowers that it would help them find the right repayment option for their circumstances, Navient steered these borrowers experiencing financial hardship that was not short-term or temporary into costly payment relief designed for borrowers experiencing short-term financial problems, before or instead of affordable long-term repayment options that were more beneficial to them in light of their financial situation. * "For borrowers who did enroll in long-term repayment plans, Navient failed to disclose the annual deadline to renew those plans, misrepresented the consequences of non-renewal, and obscured its renewal notice to borrowers who were due for renewal. As a result, the affordable payment amount expired for hundreds of thousands of borrowers, resulting in an immediate increase in their monthly payment and other financial harm. * "Navient also misreported information to consumer reporting agencies about thousands of borrowers who were totally and permanently disabled, including veterans whose total and permanent disability was connected to their military service, by making it appear as if those borrowers had defaulted on their student loans when they had not, damaging their credit; misrepresented one of its requirements for borrowers to release their cosigner from their private student loan, thereby denying or delaying access to an important feature on many cosigned private loans that relieves a cosigner of responsibility for the loan once the borrower meets certain eligibility criteria; and repeated the same errors in processing federal and private student loan borrowers’ payments month after month, even after borrowers complained to Navient about those errors." The company released a public statement and fact sheet denying the allegations and calling them politically motivated and harmful to borrowers. The lawsuit was settled in 2024, under a proposed order from the CFPB that barred Navient from servicing federal student loans and that required the company to pay $120 million in fines and compensation to borrowers. Since at least 2011, up to 2017, "tens of thousands" of complaints were filed against Navient. In 2017, 6,708 federal complaints were filed about the company, in addition to 4,185 private complaints – more than any other student loan lender. In 2018, it was revealed that Navient had attempted to collect loans from co-signers after a student's accidental death. Navient was also sued by the

American Federation of Teachers The American Federation of Teachers (AFT) is the second largest teacher's labor union in America (the largest being the National Education Association). The union was founded in Chicago. John Dewey and Margaret Haley were founders. About 60 pe ...

(AFT) for allegedly failing to divert teachers into public forgiveness plans. Former

Attorney General of Louisiana The office of attorney general of Louisiana () has existed since the colonial period. Under Article IV, Section 8 of the Constitution of Louisiana, the attorney general is elected statewide for a four-year term and is the chief legal officer of t ...

Charles C. Foti Jr. and the law firm of Kahn Swick & Foti announced that they had started investigating Navient. The investigation is focusing on whether Navient's officers and/or directors breached their fiduciary duties to Navient's shareholders or otherwise violated state or federal laws. In 2019, Navient's lending practices were the subject of an episode of

Michael Lewis Michael Monroe Lewis (born October 15, 1960) Gale Biography In Context. is an American author and financial journalist. He has also been a contributing editor to '' Vanity Fair'' since 2009, writing mostly on business, finance, and economics. ...

's "Against the Rules" podcast. In 2021, it was reported that the US Department of Education had ordered Navient to pay $22.3 million in a decades-old scandal involving Navient's former parent company, Sallie Mae. The company was accused of overcharging the US government. In the same year, the company also faced a class action lawsuit filed in New Jersey by stockholders who alleged they were injured by its scheme of steering borrowers into more lucrative forbearance status rather than pointing them toward income-driven repayment plans. In 2022, Navient entered into a $1.85 billion settlement over accusations that it had misled borrowers into costly repayment plans and predatory loans. The settlement spanned 39 states and the District of Columbia and included $1.7 billion in loan cancellations and $95 million in payouts. As of January 2022, the settlement is pending court approval. Student Loan Justice has fought Navient by calling for bankruptcy laws to again include student loan debt.

Subsidiaries

*Duncan Solutions *

*Municipal Services Bureau (MSB) *Navient BPO (Business Process Outsourcing) *Navient Portfolio Management *Pioneer Credit Recovery, Inc. *Xtend Healthcare

References

External links

*
Navient Login

Navient Corporation
recipient profile on

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