Aidvantage Took Over Navient's Federal Student Loans in 2021
Navient was previously the nation's largest student loan servicer. Last year it transferred its federal student loans to Aidvantage.
Aug. 25 2022, Published 10:19 a.m. ET
Navient still services private student loans, but Aidvantage took over its federal loans.
Navient, formerly the largest U.S. student loan servicer, shifted the student loans it managed for the Department of Education last year. Although Navient didn't go out of business — it still services private loans — it no longer controls federal student debt. Who took over Navient student loans?
Navient federal student loans were transferred to a new company, Aidvantage. This is a new official servicer of Department of Education loans. Nelnet is another such company, and it recently took over loans serviced by FedLoan.
Now, Navient only services private student loans.
Navient is still in business. Its Department of Education loans represented only about 6 percent of its total business revenue. The company had been questioned for years about allegedly misleading student borrowers, Politico reported.
As of September 2021, Navient was managing about 5.6 million borrowers’ student loan accounts, to the tune of $283 billion.
The Consumer Financial Protection Bureau sued Navient in 2017.
The Consumer Financial Protection Bureau (CFPB) sued Navient in January 2017 for “systematically and illegally failing borrowers at every stage of repayment.” The agency claimed that Navient misled borrowers and provided false or incomplete information about their loans.
The CFPB also said that Navient had “illegally cheated” borrowers out of opportunities to lower their repayments. Six Democratic state attorneys general also filed lawsuits against Navient for similar charges.
In January 2022, Navient reached a settlement with 38 states and D.C. that required the company to forgive $1.7 billion in private student loan debt.
Aidvantage now manages former federal Navient student loans.
Navient transferred its Department of Education student loan debt to Aidvantage, which services direct loans and Federal Family Education Loan Program (FFELP) loans. The Biden administration had to give approval to the transfer.
Jack Remondi, the president and CEO of Navient, stated of the transfer, “Navient is pleased to work with the Department of Education and Maximus to provide a smooth transition to borrowers and Navient employees as we continue our focus on areas outside of government student loan servicing.” Aidvantage is a division of Maximus, a government contractor that manages defaulted student loans.
Aidvantage noted that the login information for borrowers remained the same for those with Navient loans, but that people must log in on Aidvantage.com.
Will Aidvantage student loans be eligible for loan forgiveness?
The new student loan forgiveness plan announced by President Biden on Aug. 24 forgives $10,000 of student debt for those who earn less than $125,000 per year.
Since Aidvantage student loans, formerly Navient loans, are technically owned by the Department of Education, borrowers should be eligible for that forgiveness. The Federal Student Aid office also estimates that about 8 million borrowers may receive that forgiveness automatically, without any application process, because the department has their income information.
Loans transferred to Aidvantage are also eligible for other federal student loan protections such as income-driven repayment, loan deferment, and forbearance. Federal student loans have already been on “pause” since March 2020, and the White House announced its “final extension” of that pause, set to end at the end of 2022.
Those who took out private student loans with Navient are still on the hook for those payments, and Navient is still their loan servicer.