A leading servicer of federal student loans, Navient, recently announced it will transfer its current student loan portfolio and withdraw from the U.S. Department of Education's federal student loan servicing system. Navient plans to transfer the accounts to a company called Maximus.
This change will only impact government-held federal student loans serviced by Navient and will not affect private student loans.
If you are one of the 5.5 million borrowers currently doing business with Navient, it is important to be aware that this change is coming and there may be updates to current policies and repayment procedures. In a 2015 report conducted by the Consumer Financial Protection Bureau, “servicing transfers can create confusion. In addition, when errors occur during servicing transfers… this can affect every aspect of the student loan repayment process, leading to problems.”
Department officials are working hard to reassure borrowers that the transition will be efficient and no action will be required on the part of the borrower.
While there has been no official announcement on when the Department of Education expects this transfer to be complete, account holders may see statements issued by Maximus as soon as the end of the year.