Posted Date: February 25, 2014

Author:  Jana Hernandes, Service Director, Operations, Federal Student Aid

Subject: Loan Servicing Information - Sallie Mae to Separate Into Two Companies

In a press release issued today, Sallie Mae, a member of our federal loan servicer team, announced that it will separate into two distinct companies—Navient and Sallie Mae—in fall 2014. In this announcement, we summarize how this change will affect federal student loan borrowers and their schools.

The new company, Navient, will assume responsibility for servicing the following loans:

  • William D. Ford Federal Direct Loan (Direct Loan) Program loans

  • Federal Family Education Loan (FFEL) Program loans owned by the Department of Education (the Department)

  • FFEL Program loans not owned by the Department

  • A majority of Sallie Mae private loans that exist prior to the change

Sallie Mae will continue to originate new private education loans and service those newly-originated private education loans.

Federal Student Loan Servicing Transition to Navient – Overview

The impact on borrower and school customers resulting from Sallie Mae’s separation into two companies will be minimal, and no changes will occur until later this year. For federal student loan borrowers, there will be a change in the loan servicer’s name and Web site. For schools that need to contact the new company about federal student loan servicing, there will be an e-mail address change in addition to the name and Web site changes. These changes will take effect in fall 2014. Until that time, the servicer’s name, Web site, and school support e-mail address will not change. There are no other changes for borrower or school customers anticipated at this time.

Sallie Mae will provide a series of communications to federal student loan borrower and school customers over the next several months before completing the name change to Navient in fall 2014. In its communications, Sallie Mae will explain the minimal impact this change will have on customers.

The Department and Sallie Mae are committed to ensuring that all customers are kept informed of this change. In addition to this Electronic Announcement for the financial aid community, we will post a message about Navient on StudentAid.gov/announcements and communicate directly with borrowers of federally-owned loans serviced by Sallie Mae. As Sallie Mae communicates with customers, we will post periodic updates on our Information for Financial Aid Professionals (IFAP) and StudentAid.gov Web sites.

Federal Student Loan Servicing Transition to Navient – Questions and Answers

We present key information about the federal student loan servicing transition to Navient in question and answer format below.

Q1: Is there any change for borrower and school customers who work with federal loan servicers other than Sallie Mae?

A1: No. There are no other federal loan servicers involved. The changes will impact only the borrower and school customers who work with Sallie Mae.

Q2: Is there an immediate change for federal student loan borrower and school customers who work with Sallie Mae?

A2: No. Customer-facing changes will be implemented in fall 2014. Over the next several months, Sallie Mae and the Department will communicate with borrower and school customers about Navient. There is nothing that borrower and school customers need to do now.

Q3: Will the name change to Navient in fall 2014 affect the existing terms and conditions of a borrower’s federal student loans?

A3: No. The name change to Navient will not impact a federal student loan’s existing terms and conditions, such as interest rate or available repayment plans.

Q4: Will the name change to Navient in fall 2014 be the same as the transfer of a borrower’s loans to a new federal loan servicer?

A4: No. In this case, only the name of an affected borrower’s federal loan servicer and the servicer’s Web site will change. Nothing will be transferred.

Q5: Will federal student loan borrower and school customers need to use different phone numbers after the name change to Navient in fall 2014?

A5: No. The phone numbers that federal student loan borrower and school customers use today to contact Sallie Mae will be the phone numbers they use to contact Navient in the fall.

Q6: Will federal student loan borrower and school customers need to use different mailing addresses after the name change to Navient in fall 2014?

A6: No. With the exception of including the new company’s name, the mailing addresses that federal student loan borrower and school customers use today to contact Sallie Mae will be the mailing addresses they use to contact Navient in the fall.

Q7: Will federal student loan borrower and school customers need to use a different Web site after the name change to Navient in fall 2014?

A7: Yes. The Web site used today by Sallie Mae federal student loan servicing customers will change to a new Navient Web site after the name change occurs in the fall. During the transition period, Sallie Mae will link to the new Web site from its existing site. Until the name change occurs, federal student loan borrower and school customers will continue to use the existing Web site.

Q8: Will federal student loan school customers need to use a different e-mail address after the name change to Navient in fall 2014?

A8: Yes. The e-mail address that school customers use today to contact Sallie Mae federal student loan servicing will change to a new Navient e-mail address. The new e-mail address will be provided to school customers in the coming months, and school customers will use the new e-mail address after the name change occurs in the fall. Until the name change occurs, school customers will continue to use the existing e-mail address.

Q9: Will a federal student loan borrower need to reinitiate actions related to the current status of his or her account (for example, reapply for a deferment or forbearance) after the name change to Navient in fall 2014?

A9: No. A federal student loan borrower’s account status will not change after the name change to Navient occurs in the fall. In addition, if a borrower has a request in process when the name change occurs, it will be completed by Navient.

Q10: Will a federal student loan borrower need to reestablish his or her preferred payment method after the name change to Navient in fall 2014?

A10: No. A federal student loan borrower will continue on the same payment method he or she has been on with Sallie Mae and will not need to reestablish that payment method with Navient after the name change occurs in the fall.

As an example, if a borrower’s payment method with Sallie Mae is automatic debit, the borrower’s payment method will be automatic debit with Navient. The borrower will need to take action only if he or she decides to change payment methods later.

Q11: Will a federal student loan borrower whose preferred payment method is by check or through a bank or bill paying service need to take any action after the name change to Navient in fall 2014?

A11: Yes. A federal student loan borrower who makes payments by check or uses a bank or bill paying service to make his or her payments will need to begin using Navient’s name after the name change occurs in the fall. Until that time, the borrower will continue to use Sallie Mae’s name.

Although a borrower will need to use Navient’s name when instructed, the payment address that a borrower uses today with Sallie Mae to make payments by check or through a bank or bill paying service will be the payment address used by Navient.

This information will be provided to borrowers in the coming months.

Resource Information

You can learn more about Navient as follows:

  • We will provide periodic updates on Navient through subsequent Electronic Announcements on the IFAP Web site.

  • Each time we post a new Electronic Announcement on the IFAP Web site, we will also update our message about Navient on StudentAid.gov/announcements.

  • If you have additional questions about Navient, you can visit www.SallieMae.com/future.

   

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