Navient to Stop Servicing Federal Student Loans
Navient Seeks to Transfer Federal Student Loans
Navient, one of the largest student loan servicers in the US, is cutting ties with the US Department of Education and exiting the federal student loan servicing system.
The move leaves about 6 million borrowers without a servicer. Upon approval from the government, Navient plans to transfer its federal student loans to Maximus, another Department of Education contractor. The move comes as the Department of Education is changing how its $1.6 trillion student loan portfolio is managed. Lawmakers and consumer advocates have long said the system is poorly run. Navient and other student loan servicers have been accused of mishandling accounts.
Navient Borrowers Need to Advocate for Themselves
Borrowers may not know which company is servicing their federal student loans. To find out, borrowers can log into their Federal Student Aid account. The student loan servicer and details about the loan are listed in the dashboard. For student loans serviced by Navient, it is important for borrowers to check their loan documents to ensure they are accurate. It makes sense to save or print a copy.
Borrowers should also ensure they have up-to-date contact information on file with their servicer, which can help avoid mishaps like missing a payment because of a bill being sent to the wrong home or email address. The pandemic pause on paying federal student loans ends in February. However, borrowers who are still facing financial hardships can request an unemployment or economic hardship deferment.
Other Student Loan Servicers Cut Ties
Navient is joining a growing list of student loan services which are no longer servicing federal student loans. The Pennsylvania Higher Education Assistance Agency, which goes by FedLoan, and Granite State, have also cut ties with the federal government. That means about 16 million federal student loan borrowers will be assigned a new loan servicer.
If Navient’s deal with Maximus is approved by the Department of Education, the loans will be transferred. That is not the case for FedLoan Servicing and Granite State. The government has not figured out what will happen to those loans yet.
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