The servicer Navient stopped managing federal student loans in 2021. Soon, it aims to offload servicing for its remaining student loan portfolio: FFELP and private student loans.
Eliza Haverstock
Lead Writer | Student loan repayment, paying for college
Eliza Haverstock is NerdWallet's higher education writer, where she covers all aspects of college affordability and student loans. Previously, she reported on billionaires and investing for Forbes in New York, and she also covered private markets for PitchBook in Seattle. Eliza got started at her college newspaper at the University of Virginia and interned for Bloomberg, where she spent a summer writing a feature story about plastic straws. She is based in Washington, D.C.
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Karen Gaudette Brewer leads the Core Personal Finance team at NerdWallet. Previously, she guided students and their families through the ins and outs of paying for college and managing student debt on the Higher Education team. Helping people navigate complex money decisions and feel more confident brings her great joy: as the daughter of an immigrant, from an early age she was the translator of financial documents and the person who called the credit card company to fix fraud.
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Editor's note, Sept. 12, 2024: Today, the Consumer Financial Protection Bureau (CFPB) p e r m a n e n t l y b a n n e d Navient from ever re-entering the federal student loans servicing business, wrapping up a seven-year legal saga. Navient stopped servicing federal student loans in 2021. In early 2024, Navient said it would offload its private and FFELP student loan portfolio to MOHELA; this transfer is still underway.
As part of the CFPB settlement, Navient must pay $100 million in restitution to borrowers it harmed. The CFPB has not yet clarified how affected borrowers can apply for or receive this restitution.
On Jan. 30, Navient announced it had signed a binding letter of intent to outsource servicing of its remaining student loan portfolio — consisting of 2.7 million open accounts — to MOHELA in the second half of 2024.
Navient was one of the companies that serviced federal student loans by collecting and tracking payments. It stopped servicing federal direct student loans after Dec. 31, 2021. By that point, all federal loans in the Navient portfolio were transferred to another servicer called Aidvantage.
Since then, Navient has continued servicing FFEL Program loans issued by the government and owned by private lenders, and it serves as a private student loan lender.
If Navient is your current or former student loan servicer or private lender, here’s what you need to know about the switch to MOHELA.
Navient’s student loan portfolio is split between private student loans and commercially held loans from the Federal Family Education Loan Program (FFELP). The company holds $38 billion worth of FFELP loans and $17 billion worth of private education loans, a Navient representative said. If the deal goes through, Navient will retain ownership of the entire portfolio, though MOHELA will manage it.
Navient will contact impacted borrowers in the coming months with updates about the planned transfer to MOHELA. Borrowers will be able to use the same phone number and mailing address — and their loan terms, interest rate, account number and repayment plan will stay the same, Navient said.
Prior to the transfer to MOHELA, Navient borrowers should do the following:
Download and save your payment history from your online account or request a copy from your servicer.
Update your contact information with your most recent address, phone number and email address.Borrowers with commercially managed FFELP loans, including those held by Navient, are also eligible to consolidate these loans into a federal direct loan. This process opens the door to federal student loan benefits, including income-driven repayment (IDR) plans and loan forgiveness programs. Once you consolidate, your FFELP loan will be transferred to a federal student loan servicer. Consolidate your Navient FFELP loans by Apr. 30, 2024 in order to get credit towards loan forgiveness under the one-time IDR account adjustment .
If your federal loans were held by Navient prior to Dec. 31, 2021, they were most likely transferred to Aidvantange. You can confirm your current servicer by logging into your StudentAid.gov account. You can also get in touch with any of the loan servicer contact centers by calling 1-800-4-FED-AID.
Here's what your new federal student servicer can help you do:
Register for online access to your account. Once you have access you can contact your servicer, see your monthly billing statements and pay bills.
Enroll in autopay. Your servicer can deduct your payments automatically from your bank account. Signing up for autopay will reduce your interest by 0.25 percentage point.
Sign up for income-driven repayment. You can request income-driven repayment , which limits your student loan payments to a percentage of your income, by completing a paper form with your servicer (You can apply for IDR online on StudentAid.gov as well.)
Process deferment and forbearance requests. Your servicer can help you temporarily stop making payments or reduce your payment amount if you qualify. This helps you stay in good standing to avoid default. But during any periods of deferment or forbearance , interest can continue to build.
Process monthly payments and extra payments. Your servicer will track and collect your payments. If you want to make additional payments, you can instruct your servicer (online, by phone or by mail) to apply extra payments to your current balance. Otherwise, it may apply the additional amount to next month’s payment instead.
You are likely to remain with Aidvantage unless you act to switch servicers . Use this tool to find out what might work for you.
Learn more about each of the remaining federal student loan servicers and how to contact them.
Aidvantage (took over Navient portfolio)
American Education Services manages only FFEL Program debt.
Default Resolution Group services only federal student loans in default.
Heartland ECSI is a servicer for borrowers with federal Perkins loans.
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Eliza Haverstock is a lead writer on NerdWallet's student loan team covering loan repayment and alternatives to traditional four-year degrees. See full bio.
On a similar note.
You can change student loan servicers only when you consolidate your loans or apply for Public Service Loan Forgiveness.
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