Is Sallie Mae Navient? What Every Student Borrower Needs to Know

If you’ve ever asked “is sallie mae navient,” this article is for you. We’ll explain how Navient split from Sallie Mae in 2014 and grew its loan business, why it handed federal loans to Aidvantage and private loans to MOHELA, and the big legal battles it faced. You’ll also find out who qualifies for debt relief or refunds and what repayment and forgiveness choices you have. By the end, you’ll have a clear picture of how Navient’s past moves affect your student loans today.

Key Takeaways

• Sallie Mae spun off its loan servicing arm in 2014, creating Navient as a standalone servicer with its own board and focus.

• Navient took on Sallie Mae’s federal and private loans, then exited federal servicing after 2021 and passed accounts to Aidvantage and MOHELA.

• State and federal lawsuits claimed Navient steered borrowers into costly forbearance and mishandled payments, leading to $1.7 billion in canceled debt and $95 million in reimbursements.

• Debt relief under those settlements depends on when you borrowed, your school type, and your state; refunds and cancellations roll out on specific timelines.

• Borrowers can choose income-driven repayment plans, compare deferment versus forbearance, and explore private loan forgiveness or school misconduct claims if they qualify.

Is Sallie Mae Navient Or A Separate Servicer

It's easy to get confused about Sallie Mae and Navient. Are they the same? Did one become the other? The short answer is no, they are now separate entities. But to really understand what's going on, we need to look at their history.

The 2014 Spin-Off Background

Back in the day, Sallie Mae was the name in student loans. But in 2014, things changed. Sallie Mae decided to split into two distinct companies. One part kept the Sallie Mae name and focused on private student loans. The other part, which became Navient, took over the student loan servicing side of the business. This means Navient handled the nitty-gritty of managing loan payments, customer service, and all that jazz. So, while they started as one, they've been operating as separate companies for quite a while now.

Differences In Business Focus

After the split, Sallie Mae and Navient went in different directions. Sallie Mae doubled down on originating and providing private student loans. They're all about getting new loans out there. Navient, on the other hand, became a major player in student loan servicing, handling both federal and private loans. Think of it this way: Sallie Mae is the loan creator, and Navient was the loan manager. However, Navient has since moved away from federal loan servicing. In February 2024, Navient announced it would exit the student loan business entirely, transferring its outstanding private student loans to MOHELA.

Corporate Governance And Control

Even though they came from the same parent company, Sallie Mae and Navient have their own separate boards of directors and management teams. They make their own decisions about how to run their businesses. They don't answer to each other. This means they have different strategies, different priorities, and different ways of doing things. They are distinct entities with their own corporate governance structures. It's important to remember that Navient reached a deal with state attorneys general to resolve issues dating back to when it was still associated with Sallie Mae.

Understanding this separation is key for borrowers. If you have a loan from Sallie Mae, you deal with them directly. If Navient was your servicer, you would have dealt with them for managing your payments and account. Knowing who you're working with can save a lot of confusion.

Origins And Evolution Of Navient’s Servicing Role

Inheritance Of Sallie Mae’s Portfolios

Navient's story really starts with Sallie Mae. After the 2014 split, Navient took over a huge chunk of Sallie Mae's existing student loan portfolio. This inheritance instantly made Navient a major player in the student loan servicing world. It wasn't just about size; it was about the types of loans they were now responsible for managing. These included both federal and private student loans, each with its own set of rules and borrower needs.

Expansion Within Federal Servicing

For a while, Navient was one of the biggest companies working with the U.S. Department of Education to handle federal student loans. They were in charge of things like helping borrowers pick repayment plans, processing payments, and dealing with deferment or forbearance requests. But, things changed in July 2021 when Navient said they wouldn't be servicing federal loans anymore. Before that, though, they had a big role in the federal loan servicing landscape.

Shift Toward Private Loan Management

After deciding to stop servicing federal loans, Navient started focusing more on private student loans. In February 2024, they even said they were getting out of the student loan business completely and transferring their private student loans to MOHELA. This shift marked a big change in Navient's business strategy, moving away from government contracts and towards managing private debt. It's a pretty significant change for both the company and the borrowers who had their loans with Navient.

Navient's journey from inheriting Sallie Mae's portfolio to exiting the student loan business shows how much the student loan servicing world can change. It highlights the different challenges and opportunities that come with managing both federal and private loans.

Transition Of Loan Servicing Partnerships

Loan servicing can feel like a game of musical chairs sometimes. One day you're with one company, the next, you're getting emails from someone new. This section looks at how Navient's partnerships have changed over time, especially concerning federal and private loans.

Conclusion Of Federal Contracts

Navient used to be a big player in the federal student loan servicing game. They handled millions of accounts under contract with the Department of Education. However, that all changed. Navient decided to end its federal servicing contract, which meant a big shift for many borrowers. This decision wasn't out of the blue; it followed years of scrutiny and legal challenges related to their servicing practices. The end of the contract marked a significant turning point in the student loan landscape, leaving many borrowers wondering where their loans would end up next.

Onboarding With Aidvantage

So, where did all those federal loans go? A large chunk of them were transferred to Aidvantage, which is a division of Maximus. This transition was meant to be smooth, but of course, there were some bumps along the way. Borrowers had to get used to a new website, new contact information, and potentially slightly different ways of doing things. Aidvantage had to scale up quickly to handle the influx of accounts, which is never an easy task. It's a good idea to check out Aidvantage's services if you are one of the borrowers who was transferred.

Private Loan Handoff To MOHELA

While Aidvantage took over the federal loans, Navient also made changes to its private loan servicing. A portion of these private loans were handed off to MOHELA, which is better known for servicing loans related to public service. This move was interesting because MOHELA didn't have as big of a presence in the private loan sector before this. For borrowers with private loans, this meant getting familiar with MOHELA's systems and processes. It's just another example of how the student loan servicing world keeps changing, and borrowers need to stay informed.

Keeping track of who services your loans is super important. Servicers handle your payments, help you with repayment options, and are your main point of contact if you run into trouble. Make sure you know who your servicer is and that they have your current contact information.

Here's a quick recap of the changes:

• Federal Loans: Transferred from Navient to Aidvantage.

• Private Loans: Some transferred from Navient to MOHELA.

• Borrower Action: Stay informed and update your contact information with your new servicer.

Major Legal Challenges And Resolutions

Navient has faced a number of significant legal challenges over the years, stemming from allegations of improper loan servicing practices. These challenges have resulted in settlements and court decisions that have had a direct impact on student borrowers.

State Attorneys General Settlement

In January 2022, Navient reached a settlement with the attorneys general of 39 states. This settlement addressed allegations that Navient engaged in unfair and deceptive practices related to originating and servicing student loans. The accusations included steering borrowers into forbearance when income-driven repayment plans would have been more beneficial, and originating predatory subprime loans. The settlement provided for debt cancellation for certain borrowers and required Navient to make restitution payments.

CFPB Allegations And Lawsuit

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient in January 2017, alleging similar misconduct. The CFPB claimed that Navient systematically failed borrowers at every stage of the student loan lifecycle. The lawsuit alleged that Navient made it difficult for borrowers to enroll in income-driven repayment plans and that it processed payments incorrectly. It's important to note that the CFPB Navient lawsuit is separate from the state attorneys general settlement, though the arguments are largely the same.

The CFPB's lawsuit sought to obtain restitution for borrowers who were harmed by Navient's alleged practices, as well as to impose civil penalties on the company.

Outcomes Of Court Decisions

The outcomes of these legal challenges have varied. The state attorneys general settlement resulted in a consent order that required Navient to change its business practices and provide relief to borrowers. Some individual lawsuits against Navient have been dismissed, while others have resulted in settlements or judgments in favor of the borrowers. The impact of these court decisions depends on the specific details of each case and the jurisdiction in which it was filed. Borrowers should stay informed about any ongoing litigation that may affect their rights and options. It's a good idea to keep an eye on public information about lawsuits and investigations related to your school.

Impact Of Legal Settlements On Student Borrowers

Navient's legal battles have had a tangible impact on many student borrowers, though the specifics vary depending on the settlement. It's not a one-size-fits-all situation, and understanding the details is key to knowing if and how you might be affected. Some borrowers have seen debt cancellation, while others received restitution payments. It all depends on the specifics of their loans and the allegations made in the lawsuits.

Criteria For Debt Cancellation

Debt cancellation was a major component of some settlements, but it wasn't available to everyone. The most significant cancellation applied to certain private student loans originated by Sallie Mae between 2003 and 2014 that later defaulted. These loans were often associated with for-profit colleges that had low graduation rates. The lawsuits alleged that Navient knew many borrowers couldn't repay these loans but made them anyway to secure preferred-lender status. Borrowers didn't have to apply; the cancellation was automatic. It's worth noting that federal student loans were generally not eligible for cancellation under these settlements. If you're trying to optimize Sallie Mae's Smart Option loan benefits, understanding these settlements is a good start.

Reimbursement And Compensation Details

Beyond debt cancellation, some borrowers received direct payments as part of the settlements. For example, in the settlement with 39 state attorneys general, around 350,000 federal student loan borrowers who had Navient as a servicer received restitution payments, averaging about $260 each, back in 2022. These payments were intended to compensate borrowers for alleged unfair or deceptive practices related to loan servicing. The exact amount and eligibility criteria varied depending on the specific settlement and the borrower's circumstances. It's important to remember that these payments were not a windfall; they were meant to address specific harms caused by Navient's alleged misconduct.

Timeline For Relief Distribution

The distribution of relief, whether it was debt cancellation or restitution payments, occurred according to specific timelines outlined in the settlement agreements. For the debt cancellation related to private loans, the process was generally automatic once the settlements were finalized. Restitution payments were typically distributed via check, and borrowers were notified by mail if they were eligible. However, it's worth noting that some borrowers may have missed these notices or had difficulty cashing the checks, so it's always a good idea to check with the settlement administrator if you believe you were eligible but didn't receive anything. The timing of these distributions varied depending on the specific settlement, so it's important to refer to the official settlement documents for the most accurate information.

It's important to remember that legal settlements are complex and can take time to implement. If you believe you were affected by Navient's practices, it's a good idea to stay informed about any ongoing litigation or settlement opportunities. You can also contact a consumer protection agency or a student loan lawyer for assistance.

Navigating Repayment Options Under Navient

Even though Navient no longer services federal student loans, it's still relevant for those with private loans that were previously managed by them. Understanding your repayment options is key, especially if you're facing financial hardship. Let's break down some common strategies.

Income Driven Repayment Plans

Income-driven repayment (IDR) plans are primarily associated with federal student loans, which Navient doesn't handle anymore. However, it's worth understanding how these plans work in case you have other federal loans. IDR plans adjust your monthly payment based on your income and family size. The main types include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). These plans can significantly lower your monthly payments, making them more manageable. Borrowers enrolled in the SAVE Plan are encouraged to use the Department’s Loan Simulator to compare federal student loan repayment options and estimate monthly payments.

Forbearance Versus Deferment Trade-Offs

Forbearance and deferment are temporary pauses or reductions in your loan payments. Forbearance usually involves interest accruing on your loan, meaning the total amount you owe increases over time. Deferment, on the other hand, may not accrue interest, depending on the type of loan you have. Navient was accused of steering borrowers toward forbearance instead of income-driven repayment plans, which ultimately hurt borrowers in the long run. Carefully consider the long-term costs of forbearance, as it can significantly increase the total amount you repay.

It's important to note that while forbearance and deferment can provide immediate relief, they should be used cautiously. The accrued interest can add up, and you might miss out on opportunities for loan forgiveness or lower payments through other repayment plans.

Application Process For Modifications

If you're struggling to repay your private student loans serviced by Navient (or now MOHELA, since Navient transferred its private student loans to the servicer MOHELA), contact them directly to discuss your options. This might include temporary interest rate reductions, modified payment schedules, or other hardship programs. Be prepared to provide documentation of your financial situation, such as pay stubs, tax returns, and bank statements. The application process will vary depending on the specific modification you're seeking, so it's best to get clear instructions from your servicer. Remember, Navient reached a deal with 39 state attorneys general and agreed to cancel $1.7 billion in student loan debts owed by roughly 66,000 borrowers.

Private Loan Forgiveness And Defense Claims

Borrower Defense To Repayment Basics

Private student loans, unlike their federal counterparts, have fewer established forgiveness programs. However, one avenue for relief is the borrower defense to repayment claim. This defense allows borrowers to seek loan discharge if their school engaged in misconduct or fraud. The key is demonstrating that the school's actions directly led to the borrower taking out the loan. It's not a slam dunk, but it's worth exploring if you feel you were misled.

Eligibility For School Misconduct Claims

To be eligible for a school misconduct claim on a private student loan, you generally need to show that the school violated state law related to its educational services, or that it substantially misrepresented the nature of its programs. This could include things like:

• False promises about job placement rates.

• Offering programs that didn't meet advertised standards.

• Failing to provide the resources or instruction promised.

• Misleading information about accreditation or transferability of credits.

It's important to gather as much documentation as possible to support your claim. This might include enrollment agreements, course catalogs, marketing materials, and any communication you had with the school.

Steps To File A Forgiveness Request

Filing a forgiveness request for private loans based on school misconduct can be a bit tricky, as there isn't a standardized federal process like with federal loans. Here's a general outline of the steps you might take:

1. Contact the loan servicer: Start by contacting Navient student loan forgiveness (or whoever services your loan) to inquire about their specific process for school misconduct claims. They may have their own application forms or requirements.

2. Gather documentation: Collect all relevant documents that support your claim, as mentioned above. The stronger your evidence, the better your chances of success.

3. Submit your claim: Follow the servicer's instructions for submitting your claim, including any required forms and supporting documentation. Be thorough and clear in your explanation of the school's misconduct and how it affected you.

4. Follow up: After submitting your claim, follow up with the servicer to check on its status and provide any additional information they may need. Be patient, as the review process can take time.

Keep in mind that this process can vary depending on the loan servicer and the specific circumstances of your case. It may be helpful to seek legal advice or assistance from a consumer protection agency to navigate the process effectively.

Got private student loans? You might qualify for forgiveness if your lender didn’t follow the rules. Our team at Student Loan Coach walks you through each step, so you know what to do. Visit Student Loan Coach to start your defense today.

## Conclusion

In summary, Sallie Mae and Navient are separate companies today. Navient spun off in 2014 and later handed its federal loans to Aidvantage at the end of 2021. It has also agreed to cancel billions in debt after settling with states and the CFPB for steering borrowers into costly forbearance and mishandling payments. If you currently have Navient loans, check who your new servicer is, look into any refunds or loan cancellations you might qualify for, and explore repayment plans that fit your budget. Watching these changes closely can prevent surprises and help you stay in control of your student debt. Stay on top of your loan info so you can graduate without extra financial stress.

Frequently Asked Questions

What is the connection between Sallie Mae and Navient?

Navient started as part of Sallie Mae. In 2014, Sallie Mae created Navient as a separate company. Since then, each firm has run on its own and focuses on different types of loans.

When did Navient begin handling loans from Sallie Mae?

Navient took over Sallie Mae’s loan portfolio in 2014. At that time, it became one of the biggest student loan servicers. Before then, Sallie Mae managed both federal and private student loans directly.

Who now manages federal loans that Navient used to service?

Navient stopped servicing federal student loans in December 2021. After that, those loans moved to Aidvantage. Today, Aidvantage handles most federal loan accounts once managed by Navient.

What legal settlements has Navient reached with borrowers?

In 2022, Navient agreed with 39 state attorneys general to cancel about $1.7 billion in debt for roughly 66,000 borrowers. It also paid $95 million so states could refund about $260 each to 350,000 borrowers. This deal ended long-running state cases.

What repayment plans does Navient offer for student loans?

Navient gives income-driven repayment plans, fixed plans, and options to switch between forbearance or deferment. Income-driven plans set your monthly payment based on your earnings. Forbearance pauses payments but can increase your interest costs.

Can I get private loan forgiveness if I borrowed through Navient?

Yes. If your school misled you or broke rules, you may qualify for borrower defense to repayment. You must submit a claim to the U.S. Department of Education. If approved, your private loan balance could be forgiven.