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Navient lawsuit: What is the important difference between Navient and Sallie Mae?

loan borrowers

If you have experience in student loans, you probably have an idea what Navient, Navient lawsuit, and Sallie Mae means as a company. Before starting of discussion about these two company’s differences, it might be plausible to talk about the general acknowledge about those by people, especially who have student loan issues. The point here is, when people talk, write and search about a student loan, so Navient and Sallie Mae come to mind in the first place. So if you are a student and have a student loan, sometimes it can be hard to manage your loans, and you might be confused after all as well. First thing first, people should know that Navient and Sallie Mae are separate and different services for people who have student loans. And you should know whether the Navient lawsuit affects your plan or not.

Apart from current students, it is possible that even parents are informed about Sallie Mae as the reason of its bond with the student loan program which relates to U.S. Department of Education and parents might have federal student loan by Sallie Mae. However, this concept has changed, and that is why there are differences between these two services.


What do you know about Sallie Mae?



Sallie Mae, the U.S. based association works in consumer banking. However, the duties and services of Sallie Mae have changed throughout the years. This company was founded in 1972. Sallie Mae works as a company to create, service and collect private education loans. In the past, the company composed student loans which are created by the Family Education Loan, and it also operated its duties such as providing services and collecting loans in the name of the US. Education Department.


What does Sallie Mae do now?


As a student, you can face some federal loans and their options. If you do not want to take the federal loans, search for a different method of loans, private student loans might be helpful for you. And in the first place, Sallie Mae might be your choice as private student loan services.

So it has been 40 years that Sallie Mae has been providing the student loans for different fields such as undergraduate, master degree and some training for career opportunities. And eligible students or borrowers can take 100% of chance to provide their costs. So after managing federal loans for years, Sallie Mae altered its model after 2010 regulations by the government that mentioned private banks no longer eligible to provide federal loans.


Then Navient and Sallie Mae became different services. After separated into two sides – Navient and Sallie Mae – now the company gives private student loans. Not only that, Sallie Mae secures those student loans and turns those student loans into financial products. We can count some service that Sallie Mae now operates and offers such as High Yield Saving Accounts, CDs and Money Market Accounts with a banking union.

Those are not the only thing they do. This company also operates in sales by selling insurance in life, health, tuition, auto and travel fields. Furthermore, this company also has the same service as Navient does. Now, Sallie Mae secures the student loans which the company itself creates and services.


What is Navient and what does it do?


After pointing out an explanation of Sallie Mae, we have Navient on our hands. What do you know about Navient as a loan service company? So Navient was founded in 2014 because of the separation of Sallie Mae into two sides, and this U.S. based company’s HQ is in Wilmington, Delaware. According to the statistics in 2018, it is underlined that Navient plays an essential role in student loans service in the U.S. by servicing 25% of them.


As a student loan service, Navient manages student loans as an independent company from Sallie Mae. Back in the past, William D. Ford Federal Direct Loan Program and Federal Family Education Loan (FFEL) which were owned by the U.S. Department of Education. However, now it is the duty of Navient that operates student loan assistance. Navient also has securitization while paying loans. Navient can also work with large portfolios which implies the loans that do not have repayment and have no bond with the government as well. Navient buys loans which are provided by the Federal Family Education Loan Program and forcibly buy loans from different private student loan lenders.


Furthermore, its primary duties are to help students in their financial issues which the company assists its customer by providing some appropriate decision about their financial situations, and it also helps the people, who have debts, to manage their debts. When the students commence paying their student loans, Navient, as a service, will inform them about several income-driven repayment plans in which may help the students to be affordable while they pay their debts monthly.

Moreover, there is also one more service as they operate for the customers such as if the customer is unemployed or having trouble or hard issues with the financial situation, Navient can assist them by providing deferment issue. What is it then? Student Loan Deferment assistance helps people to postpone their payments which do not require to pay late fees in the first hand. After this explanation, it may be interesting that if Navient lawsuit process is effective to your loan process, or it is not a big deal for debts.


Navient Lawsuit


After pointing out about Navient as a student loan service, you might face some Navient lawsuit issues as well. What is Navient lawsuit then? Why is there a lawsuit against Navient? The California lawsuit focuses so federal students loans, and the federal government also backs it. The California lawsuit and Consumer Financial Protection Bureau (CFPB) arraigned Navient in 2017. The California attorney claims that Navient works with 1.5 million Californian student loans.


So the Consumer Financial Protection Bureau (CFPB) claims that in the steps of the repayment process Navient made some problems for borrowers. In the detailed format, here are some allegations below:


  • When the borrowers complain about the process, the company fails to make decisions
  • Incorrect payment procedure
  • Wrong information provided by the company forms a barrier in the repayment stages
  • Cheating on the lower repayment borrowers which makes them pay more than they must do, etc.


So the Consumer Financial Protection Bureau (CFPB) demands that Navinet must compensate the damaged borrowers. However, Navient refuses the CFPB’s alleges and underlines several facts.


From Sallie Mae to Navient



So those explanations covered up all aspects of two services. However, separation also made some alterations inside those companies. For instance, people had their loans in Navient and Sallie Mae. It means that if people took student loans before 2014, it is a possibility that they took it from Sallie Mae. However, after 13 October 2014, Sallie Mae transferred the federal loans to Navient.


Borrowers should not be confused about Navient lawsuit, Navient itself and Sallie Mae transfer because this transferring does not have any impact on their federal loans or repayment process. So if people do not get any email or notified about their federal loan, they should log in their account and check whether it is transferred or not. If you do not know which service you are in, go to National Student Loan Data System (NSLDS) which follows your federal loans so you can find detailed information in the website to know your loan balance, type of it and where it is.