taking a close look at Sallie Mae Smart Option loans

The Big Navient Review

Michael Lux Blog, Student Loans 31 Comments

Last year Sallie Mae cut up its company into two separate student loan companies. Sallie Mae held on to some of its loans and assets, and a number of them went to a new company called Navient. At present these are two entirely seperate companies, but from a borrower perspective, they could easily be called Sallie Mae 1 and Sallie Mae 2. Navient is run largely by former Sallie Mae employees and almost of of the debt that they manage was previously with Sallie Mae.

The Challenge to Reviewing Navient

Because Navient is literally a brand new company, it will take some time before we fully understand the implications of the split from Sallie Mae and how it will affect customers. For now, we can discuss the good and the bad based upon our limited information. At the bottom of this page is also a form for borrowers to share their experiences with Navient. This page will continually be updated as new information becomes available and borrowers share their experiences.  Initially, we will award five out of ten points until we get enough customer input to adjust the grade up or down.

What is good about Navient?

Even though Navient is a new company, they still must play by the same rules that Sallie Mae did. Though student loan consumer protection is way behind other industries such as credit cards and mortgages, some protections will remain. For starters, if you had a loan with Sallie Mae that was transferred to Navient, it means the terms of the contract will still be the same. Navient cannot double your interest rates just because they are a new company.

Along the same lines, Navient must still play ball with the Federal Government. Navient is taking over many of the Sallie Mae contracts with the Department of Education. This means that many federal loans will be managed by Navient. One of the protections borrowers have is the ability to file a complaint with the Consumer Financial Protection Bureau. Should Navient provide a negative customer experience, borrowers can file a complaint, and Navient will be forced to respond to both the borrower and the CFPB. Failing to work with the federal government would be devastating to Navient as their contracts are very lucrative.

One other thing that we like about Navient so far is that they are continuing the rate reduction program that started out with Sallie Mae. This program, even though not required by loan agreements, allows struggling borrowers to get a lower interest rate on their student loans for one year at a time. It isn’t a magic fix, but it can help borrowers keep their debt under control without being forced to take a deferment or a forbearance

What is the bad news on Navient?

Sallie Mae had a terrible reputation among student loan borrowers. Navient, though a new company, is still pretty much the Sallie Mae we all know. In fact, Forbes describes Navient as the old Sallie Mae. New Sallie Mae is more of a financial services company focused on banking for college students and families.

If the Sallie Mae that we saw the last five to ten years was a car, it would have been rusted out, unreliable, and frustrating to deal with. Calling it Navient may add a new coat of paint, but unless the fundamental issues are addressed, it will continue to provide a lousy user experience.

The Bottom Line

Only time will tell whether calling the company Navient is a gimmick or the beginning of a fundamental corporate shift aimed at better meeting the needs of student loan borrowers.

Navient Customers: How would you describe your experience? Is Navient better or worse than Sallie Mae? What have you liked and what did you dislike?