Introducing Navient: Sallie Mae’s Latest Creation

Michael Lux News, Student Loan Blog, Student Loans 7 Comments

Sallie Mae has grown to become by far the biggest name in student lending.  Along the way, Sallie Mae has generated its fair share of negative press.  In 2014 alone, we have seen a scathing report from the National Consumer Law Center, and we have also seen Illinois launch a multistate probe into Sallie Mae’s lending practices.  Today Sallie Mae explained some major changes coming to their company.

Who is Navient?

Navient is a new company created by Sallie Mae as part of their previously announced corporate restructuring.  The term Navient was coined by Sallie Mae, and they will be using that name for their new company in charge of Federal loan management, servicing, and asset recovery.  Sallie Mae will continue to exist, but as a consumer banking company.  Based on the press release, it looks like Sallie Mae will still be originating private student loans, but that Navient will be the company that handles the federal loans.  This change in name and structure is expected to take place in the second half of 2014.

What does this mean for borrowers?

The biggest change will be the name on the envelope when your student loan bills come each month.  If you get a letter from Navient, just remember that it is Sallie Mae.  In theory, there should not be any changes to the loan interest rates, repayment, or terms.  In practice, only time will tell.

If you currently have loans with Sallie Mae, be sure to keep an eye on the Navient changeover.  This will especially matter for things like auto bill-pay with your bank and any other automated process involving Sallie Mae.  When the time comes, it will be critical to change everything into the Navient name.

How will this restructuring work?

If you already have private loans from Sallie Mae and government loans serviced by Sallie Mae, then you may have already noticed some of the changes.  Customer Service Representatives can now only help you with private loans or with government loans, not both.  As it works right now, their system can be somewhat confusing and result in a lot of transfers.  Hopefully the full separation will make it more clear who to talk to about most loans.

People who will be affected by the change can probably expect a letter in the mail from Sallie Mae/Navient explaining the details as it pertains to their individual loan.  If you have any questions or confusion regarding the change, it is likely in your best interest to reach out to Sallie Mae and discuss you options and what you need to do.

Bottom Line

Once again big changes are coming in the world of student loans, and borrowers have no say.  Today Navient is both a word and a company that nobody has heard of.  By the end of 2014, Navient will be servicing over $300 billion dollars in student loans for over 12 million people.

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I can see both the good and bad in this. The good being that hopefully it will be more clear as to the differences between government and private student loans. The bad being all of the people that don’t know about the name change and ignore the letters, etc because let’s be honest, a lot of people don’t read the little inserts that come in the mail. I just hope Navient is considerate and gives people a pass if they miss a payment due date etc. due to the changes.

Stu @ Poor Student

I’m not that familiar with Sallie Mae but I heard they have bad service. Maybe by restructuring the company they hope to offer better service and start (somehow) anew. We’ll see.

Steve SanFrancisco
Steve SanFrancisco

If the reasons for restructuring were in the interest of the borrowers they would have publicized how it would help the borrowers and provided borrowers with impartial information on an option to accept or reject the change. No meaningful explanation relevant to the borrows and no freedom to decide by the borrows and an executive focused explanation in business journals means this restructuring is for the benefits of the executives.

The Student Loan Sherpa

Great point Steve. If this move was at all good for borrows, they would not have kept it a secret.

Michele Dziubak Byrne
Michele Dziubak Byrne

Navient is HORRIBLE. Thank you for raising my student loan payment by literally 1000%. I can NOT afford to give you OVER 30% of my monthly income. I barely make my ends meet month to month as is, and I’ve made every payment to them so far on time and this is how I’m repaid. 1000 percent increase? Really Navient?

The Student Loan Sherpa

Hey Michele. Sorry to hear about your troubles. Hopefully I can help you out.

Navient is terrible about informing people about available programs (they like to run up late fees and interest), but there are resources that might be able to help you out. If you have federal loans, try and get signed up for an income based repayment plan. You can end up paying much less than the current 30% of your income.

If you have private loans, you might want to check into their rate reduction program. They don’t really advertise it, but it is a pretty good program aimed at helping people out who are struggling with their debt. You can read more about it here:

Meghan Geraghty
Meghan Geraghty

I have loans with Sallie Mae and few years ago had made an arrangement with them based on my income to pay $150 a month and was never told that this arrangement had an end date. Then the switch to Navient happened and 3 months later I got a call from them saying I was three months late on my loan payment. Now it has been over 6 months of fighting with them about this issue and getting no with them. Navient is horrible at handling this and dragged my credit down again. The only thing that saved me for now is being able to get what is left of my Pell Grant and I started going to school full time so now my loans are in deferment.