Federal student loan servicer Navient announced Tuesday that it is requesting to transfer its loan servicing contract with the Department of Education to Maximus, the current servicer for defaulted student loans.
"Since we declined the Department’s Next Gen servicing contract in 2020, we have explored options to ensure an easy path for borrowers and to provide ongoing work for our dedicated team members," said Jack Remondi, president and CEO of Navient. "We were pleased to find a terrific partner in Maximus. Both companies have been in collaborative and productive discussions with the Department’s office of Federal Student Aid about this transition for several months."
The transfer must be approved by the Office of Federal Student Aid. Richard Cordray, chief operating officer of FSA, said in a statement that the office is reviewing documents and information from both servicers to ensure their proposal meets legal requirements and protects borrowers and taxpayers.
Navient, which services nearly six million loans, said it expects the contract to be finalized by the end of the year. The company plans to focus on other facets of its business, including consumer lending and business processing.
Navient's transfer is the latest shake-up in student loan servicing -- over the summer, the Pennsylvania Higher Education Assistance Agency and Granite State Management & Resources both announced they would not be extending their federal servicing contracts at the end of the year, affecting nearly 10 million borrowers.