Navient
| Company type | Public |
|---|---|
| Industry | Financial services |
| Founded | 2014 |
| Headquarters | Wilmington, Delaware , United States |
Area served | United States |
Key people | Jack Remondi (former CEO) |
| Products | Student loan servicing, loan management, asset recovery, healthcare payment solutions |
Number of employees | 4500 |
| Website | navient |
Navient Corporation is a U.S.-based financial services firm headquartered in Wilmington, Delaware, formerly known for servicing student loans. Established in 2014 following the division of Sallie Mae into two separate companies—Sallie Mae Bank and Navient—it employs approximately 4,500 individuals nationwide. In 2018, Navient managed about one-quarter of all student loans in the United States. By 2024, the company was prohibited from servicing federal student loans.
History
Navient’s origins trace back to the Student Loan Marketing Association (Sallie Mae), a Government-Sponsored Enterprise (GSE) created in 1972 to facilitate the student loan program under the Higher Education Act of 1965. Its key functions included acquiring student loans on the secondary market and packaging loan pools into securities, thereby enhancing liquidity and lowering costs for borrowers.
The process of privatization commenced in 1997, culminating in 2004 when Sallie Mae’s GSE charter was terminated, transforming it into a privately held corporation governed by an independent board. In 2009, Sallie Mae was selected by the U.S. Department of Education to service federal loans. However, following the repeal of the federally guaranteed Federal Family Education Loan Program (FFELP) by the Health Care and Education Reconciliation Act of 2010, all federal student loans began to be originated directly through the Department of Education.
In 2013, Sallie Mae announced its intention to separate into two publicly traded entities: one focused on education loan management under the new name Navient, and the other retaining the Sallie Mae name as a consumer banking operation. This corporate split was finalized on April 30, 2014.
Navient received accolades for gender diversity on its board from groups such as 2020 Women on Boards and the New York Stock Exchange Governance Services in 2015.
The company grew through acquisitions including Gila LLC, an asset recovery firm, and Xtend Healthcare, specializing in healthcare payment solutions, both acquired in 2015.
On September 28, 2021, Navient declared its intention to discontinue servicing federal student loans, transferring these duties to Aidvantage, a division of Maximus Inc., by October of that year.
In 2021, a group of borrowers initiated legal action aiming to compel Navient into bankruptcy; this resulted in a $1.85 billion settlement agreement reached in January 2022. Subsequently, courts prohibited Navient from collecting on certain loans discharged through bankruptcy.
In 2023, Navient’s subsidiary Earnest expanded its lending operations to include international students.
By May 2024, Navient consented to delegate its student loan servicing responsibilities to MOHELA. In September 2024, under a proposed settlement with the Consumer Financial Protection Bureau, Navient was barred from managing most federal student loans and mandated to pay $20 million in penalties along with $100 million in restitution for borrowers.
Corporate and financial
Navient is publicly traded on the Nasdaq stock exchange under the ticker NAVI. As of 2015, it held the largest portfolio of education loans insured or guaranteed by the Federal Family Education Loan Program (FFELP), alongside the largest private education loan portfolio. The company finances much of its operations by issuing student loan asset-backed securities (SLABS), packaging loans into financial products sold to investors. These securities receive ratings from agencies such as Moody's Investor Services and Fitch Ratings; however, their valuations have declined as an increasing number of borrowers choose income-driven repayment plans.
By mid-2016, many SLAB tranches experienced credit rating downgrades. In 2014, Moody's lowered Navient’s senior unsecured debt and corporate family ratings to Ba3 due to diminishing earnings, cash flow challenges, declining equity levels, and significant leverage.
Jack Remondi, former CEO of Navient, has publicly offered suggestions aimed at reforming the student loan system.
Legal challenges, probes, agreements, and disputes
In August 2015, the Consumer Financial Protection Bureau (CFPB) alerted Navient that its enforcement division had uncovered indications of potential breaches of consumer protection regulations.
On May 28, 2015, the U.S. Department of Justice revealed a $60 million settlement to reimburse nearly 78,000 military personnel for excessive interest charges on their student loans serviced by Navient. This settlement addressed claims of violations against the Service Members Civil Relief Act (SCRA).
Senator Elizabeth Warren publicly condemned Navient’s loan servicing and its contract with the Department of Education in March 2016, labeling it as "a shocking failure" and advocating for significant reforms in student loan servicing practices.
In June 2016, a class action lawsuit was initiated by shareholders against Navient, including police officers from Chicago and retired municipal workers from Providence, Rhode Island.
On January 18, 2017, the CFPB alongside the Attorneys General from Illinois, Pennsylvania, and Washington filed a lawsuit accusing Navient of infringing upon the Fair Credit Reporting Act and Fair Debt Collection Practices Act. The complaint alleged that Navient habitually harmed borrowers by charging excessive interest fees, inaccurately reporting disabled veterans’ loans as delinquent, providing misleading information about repayment options and deadlines, and improperly handling payments despite repeated complaints. Navient refuted these charges as politically driven. The litigation concluded in 2024 with Navient being prohibited from managing federal student loans and mandated to pay $120 million in penalties and borrower restitution.
Between 2011 and 2017, Navient faced tens of thousands of complaints, surpassing any other student loan provider with over 10,000 federal and private grievances filed in 2017 alone.
In 2018, reports surfaced that Navient sought repayment from co-signers following a borrower’s accidental death. That same year, the American Federation of Teachers initiated legal action against Navient for allegedly neglecting to guide educators toward public loan forgiveness programs.
Investigations were also launched by former Louisiana Attorney General Charles C. Foti Jr. and the law firm Kahn Swick & Foti into whether Navient’s leadership had violated fiduciary responsibilities or legal statutes.
Navient’s lending conduct was highlighted in Michael Lewis’s 2019 podcast series "Against the Rules."
In 2021, the U.S. Department of Education directed Navient to reimburse $22.3 million linked to a longstanding controversy involving its previous parent company Sallie Mae over government overcharges. Additionally, a New Jersey shareholder class action accused Navient of steering borrowers into more lucrative forbearance options instead of income-driven repayment plans.
By 2022, Navient consented to a $1.85 billion settlement with 39 states plus the District of Columbia concerning allegations of deceiving borrowers into expensive repayment schemes and predatory lending practices. The agreement encompassed $1.7 billion in loan forgiveness and $95 million in financial compensation; court approval was pending as of January that year.
The advocacy group Student Loan Justice has actively campaigned against Navient by pushing for bankruptcy law reforms that would offer protections for student loan debtors.
Subsidiaries
- Duncan Solutions
- Earnest
- Municipal Services Bureau (MSB)
- Navient BPO (Business Process Outsourcing)
- Navient Portfolio Management
- Pioneer Credit Recovery, Inc.
- Xtend Healthcare
See also
External links
- Navient Corporation recipient profile on USAspending.gov
- Contract ED-FSA-09-D-0015 on USAspending.gov
- Student Loans – video released Feb 24, 2019, on Patriot Act with Hasan Minhaj