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Navient, one of the nation’s largest student loan companies, said Tuesday it has struck an agreement to transfer the 5.6 million accounts it manages on behalf of the Education Department to Maximus, another loan servicer.
The deal, which is pending approval from the department, means the exit of one of the most widely recognized servicing companies from the federal student loan apparatus. It arrives as the federal agency overhauls the management of its $1.6 trillion student loan portfolio.
I would imagine the private side of student loan servicing is no longer worth the squeeze. SoFi squeezed a lot of the market as well, prior to Covid-19. The CARES Act forbearance that is currently in progress is not doing the private student loan market any favors. Where the private student loan market had an advantage was in refinancing Federal student loans to lower rates, since the Federal student loans tended to be 150 to 200 bps higher than what the private market offers.
You have individuals waiting on the possibility that a portion of their student loans can be forgiven and they'll just have to show that forgiven portion on their tax return as income for x amount of years. Current forbearance is in place until January 31, 2022 and I could see it getting extended to September 30, 2022, as I just don't see that switch being flipped anytime soon.
I'm not a very smart man, but I would presume Naviant is getting out of this market, because the amount of students paying on their student loan debt is very small right now. The juice stopped being worth the squeeze when Covid came along. A lot of overhead with salaries.
I would imagine the private side of student loan servicing is no longer worth the squeeze. SoFi squeezed a lot of the market as well, prior to Covid-19. The CARES Act forbearance that is currently in progress is not doing the private student loan market any favors. Where the private student loan market had an advantage was in refinancing Federal student loans to lower rates, since the Federal student loans tended to be 150 to 200 bps higher than what the private market offers.
You have individuals waiting on the possibility that a portion of their student loans can be forgiven and they'll just have to show that forgiven portion on their tax return as income for x amount of years. Current forbearance is in place until January 31, 2022 and I could see it getting extended to September 30, 2022, as I just don't see that switch being flipped anytime soon.
I'm not a very smart man, but I would presume Naviant is getting out of this market, because the amount of students paying on their student loan debt is very small right now. The juice stopped being worth the squeeze when Covid came along. A lot of overhead with salaries.
That federal student loan forbearance isn't across the board. It only applies to paper still owned by federal government. Navient has tons of paper owned by various other entities such as Duetche Bank that aren't affected. Payments are and still were due all during covid, but Navient early on was giving out some sort of forbearances if people asked.
Over years Navient has pulled some huge stunts against borrowers, and with democrats in power in Congress their biggest enemy Elizabeth Warren is hot on their trail. They're getting out while the getting is good.
That's wild. That's actually the company I work for (Maximus).
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