Credible takeaways
- Navient is shifting its remaining student loan portfolio to MOHELA to service loans.
- Borrowers with FFEL and private student loans managed by Navient could be impacted.
- The transition will start in the coming months, but you should be able to continue sending payments to the same mailing address.
Navient has been slowly shifting away from servicing student loans for years, and it will soon complete the process.
In its recent announcement on Jan. 30, 2024, the company revealed plans to outsource the servicing of its entire remaining student loan portfolio, which includes 2.7 million student loans, to MOHELA. Navient expects to eliminate as much as $400 million in operating costs as a result of this transition.
Important:
If you have FFEL loans or private student loans serviced by Navient, you should continue making your loan payments to Navient until you’re notified to pay a new servicer.
How will my loans be impacted?
Navient has indicated the transfer of its student loan portfolio to MOHELA will begin in the later half of 2024 but could take almost two years to complete. Borrowers currently working with Navient need to be aware they may soon have a new loan servicer to collect their payments and assist with loan tasks.
Based on problems that occurred during past transitions, it's also crucial for any borrower who sees a $0 balance on their Navient account to understand their loans are just being moved and not being erased.
If you have FFEL loans managed by Navient
The Federal Family Education Loan (FFEL) program stopped operating on July 1, 2010, but there are still many borrowers with outstanding loan balances. Approximately $38 billion worth of these outstanding FFEL loans are being serviced by Navient — for now. All the FFEL loans currently within Navient's portfolio will transition to MOHELA for loan servicing over the course of the next 18 to 24 months.
It's also important to note that you have the option of consolidating FFEL loans into a federal Direct Consolidation Loan. This can result in your loan being transferred to a different federal loan servicer. If you don't want to lose the progress you’ve made toward loan forgiveness, you'll need to consolidate your FFEL loans by Apr. 30, 2024, to ensure you get credit for payments you’ve already made.
If you have private student loans managed by Navient
While Navient's private student loan portfolio is less substantial than its FFEL portfolio, the servicer still has $17 billion of private student loans under its control. Like the FFEL loans, private student loans will become the responsibility of MOHELA to service after the transition is completed throughout the later half of 2024 and the upcoming two years.
If you have federal loans managed by Navient
Navient stopped servicing other federal student loans beside FFEL loans as of Dec. 31, 2021. So if you had other federal loans serviced by Navient in the past, you should not be impacted by this new transition. It’s likely that Aidvantage has already been servicing your loan for several years.
Related: 8 Ways To Lower Your Student Loan Payments
How can borrowers prepare?
Navient has indicated it will work with MOHELA “toward ensuring a seamless transition in the coming months and providing customers with uninterrupted servicing of their loans,” according to their website.
MOHELA also has a dedicated web page for borrowers who receive notice that their loans will be transitioned. You can review MOHELA’s resources to learn how to do things like create an online account login.
While the transition should hopefully happen seamlessly, it is still a good idea to download and save your loan payment history in case information is lost during the process of Navient transferring its portfolio. You'll also want to make sure your most updated address and contact details are on file in case Navient or MOHELA needs to get in touch with you.
Navient FAQ
Is Navient a private or federal student loan?
Navient is an education financing company that previously offered private student loans to borrowers and also serviced federal loans issued by the Department of Education. Navient also operated a collections service.
Originally created in 1973 as a division of the Student Loan Marketing Association (Sallie Mae), Navient split off into a separate company in 2014. While Sallie Mae continued to provide and service private student loans, Navient focused more on federal education loans, and absorbed most existing Sallie Mae private loans.
What is the Navient controversy?
Attorneys general for several states have sued Navient for misconduct. Alleged problems included steering borrowers into costly forbearance programs instead of helping them learn about income-driven plans, making predatory subprime loans while operating as Sallie Mae, and engaging in other unfair borrowing practices. Navient agreed to pay a $95 million settlement in response to the accusations.
When did Navient stop servicing federal loans?
On Oct. 20, 2021, the U.S. Department of Education announced Navient would no longer service federal student loans. Instead, the contract to do so would be transferred to Aidvantage, a division of Maximus Federal Services, Inc. The change went into effect on Dec. 31, 2021.
However, Navient still continued to service Federal Family Education Loans (FFEL), as well as private loans. This is now changing. Navient has announced that it is shifting management of its remaining loan portfolios to another servicer, the Higher Education Loan Authority of the State of Missouri (MOHELA), in the second half of 2024.
Advertiser DisclosureOverview
Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
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$1,000 up to 100% of the school-certified cost of attendance
Overview
College Ave offers a wide range of in-school loans for nearly every type of degree. There are a number of repayment options, and borrowers can choose a unique eight-year repayment term. Plus, graduate, dental, and medical students receive extended grace periods.
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Available after more than half of the scheduled repayment period has elapsed and other requirements are met
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Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
Loan Amounts
$1,000 up to 100% of school-certified cost of attendance
Overview
Sallie Mae offers the Smart Option Student Loan for undergraduate students and a suite of loans for graduate students. You can borrow up to your school-certified cost of attendance and apply just once annually to get the funds you need for the entire academic year. Plus, applying for a Smart Option Student Loan with a cosigner may help you get a better rate.
Through Sallie Mae, you can find a variety of loans designed for specific needs, including loans for MBA programs, law school, medical school, and health profession programs.
Loan terms
10 to 15 years for the Smart Option Student Loan; 15 years for law school, MBA, and graduate school loans; 20 years for medical school loans
Loan amounts
$1,000 up to school-certified cost of attendance. Student must be listed as the borrower, and a parent may cosign.
Cosigner release
After you graduate, make 12 one-time principal and interest payments, and meet certain credit requirements
Eligibility
Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens residing and attending school in the U.S. may qualify by applying with a creditworthy cosigner, who must be a U.S. citizen or permanent resident, and providing an unexpired government-issued photo ID.
Loan Amounts
$1,000 to $99,999 annually ($180,000 aggregate limit)
Overview
Powered by Cognition Financial, Custom Choice offers student loans for undergraduate and graduate students starting at $1,000. You can borrow up to $99,999 per year with a total aggregate limit of $180,000.
If you apply with a cosigner, you may be able to release them from your loan after 36 on-time payments. You can also receive a 0.25 percentage point discount on your interest rate by setting up autopay, as well as a 2% reduction of your principal balance after graduating.
Custom Choice doesn’t charge application, origination, prepayment, or late fees. It also lets you pause payments through forbearance if you qualify for its natural disaster or unemployment protection programs.
Loan amounts
$1,000 to $99,999 per year (lifetime limit of $180,000)
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
Loan Amounts
$1,000 to $350,000 (depending on degree)
Overview
Citizens offers a variety of student loan types, including loans for undergraduates, graduate students, and parents. Perhaps the most unique feature of Citizens student loans is the option for multiyear approval. If you qualify, you can apply once and borrow for future years with a more streamlined process that only involves a soft credit inquiry.
Student borrowers can defer payments while in school and for six months after graduating. You can also score a 0.25 percentage point reduction on your interest rate for setting up autopay, as well as an additional 0.25 percentage point loyalty discount if you or your cosigner already have a qualifying account with Citizens.
Loan terms
5, 10, or 15 years for student loans; 5 or 10 years for parent loans
Loan amounts
$1,000 minimum, up to a maximum of $150,000 for undergraduate and graduate degrees; $250,000 for MBA and law; and $180,000 or $350,000 for health care student loans, depending on the degree type
Eligibility
Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.
Loan Amounts
$1,000 up to cost of attendance
Overview
Education Loan Finance (ELFI) is a division of Tennessee-based SouthEast Bank owned by Education Loan Finance, Inc., a non-profit whose mandate is to provide access to higher education. ELFI launched in 2015 and offers undergraduate, graduate, and parent private student loans as well as student loan refinancing.
ELFI student loans and refinance loans are available to residents in all U.S. states including Puerto Rico. Borrowers can benefit from no application, origination, or prepayment fees. ELFI also offers flexible repayment terms and competitive rates, however there’s no cosigner release option and the lender doesn’t offer any discounts.
Loan amounts
$1,000 - Cost of attendance
Cosigner release
A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.
Eligibility
All 50 states as well as Washington DC and Puerto Rico.
Loan Amounts
$1,001 up to 100% of school certified cost of attendance
Overview
INvested is an Indiana company that offers affordable student loans exclusively to state residents. Loans are available to Indiana students and parents who can meet income and credit requirements, or who have an eligible cosigner. Borrowers can borrow as little as $1,001 or as much as the school-certified cost of attendance minus other aid.
INvested provides detailed information on eligibility so borrowers can quickly determine whether to apply for a loan — however, there’s no option to prequalify with a soft credit check. Cosigner release is also available after just 12 on-time payments, considerably shorter than many other lenders.
Loan amounts
$1,001 minimum, up to the school certified cost of attendance
Eligibility
Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
Loan Amounts
$1,500 up to school’s certified cost of attendance less aid
Overview
Massachusetts Educational Financing Authority (MEFA) is a not-for-profit lender that offers low-cost undergraduate and graduate school loans to students nationwide. While only fixed-rate loans are available, interest costs may be lower than what you see with other private loans.
While you can apply with a cosigner to lock in the best rate possible, removing that cosigner later may be tough. Only one repayment plan allows cosigner release, and you must make four years of consecutive on-time payments and meet other credit and income requirements to qualify.
Loan amounts
$1,500 minimum up to school-certified cost of attendance
Eligibility
Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
Meet the expert:
Christy Bieber
Christy Bieber has been working full-time as a freelance writer since 2008. She has written blogs, news articles, textbooks, and online courses on the topics of law, finance, and history. She lives with her husband, two children, and beagle.
