6 things you need to know about the Sallie Mae split
In a press release issued February 25, student loan servicer Sallie Mae announced that it will separate into two distinct companies—Navient and Sallie Mae—in fall 2014.
If you have a loan through Sallie Mae, there may be some changes, but the federal government assures borrowers the changes will be minimal, and no changes will occur until later this year.
Sallie Mae splitting into two companies
1. Navient taking over Sallie Mae’s student loan division
Starting this fall, Navient will service most of Sallie Mae’s existing private student loan portfolio and also take over Sallie Mae’s contract with the U.S. Department of Education to manage the payments of federal student loan borrowers.
2. Federal student loan borrowers will have a new loan servicer.
Federal student loan borrowers with a loan through Sallie Mae will see a change in their loan servicer’s name and website in Fall 2014.
In Fall 2014, borrowers with federal (and possibly private) student loans through Sallie Mae will be serviced by Navient and make payments at Navient.com. Until this time, their servicer’s name and website will not change.
3. Sallie Mae will communicate news to borrowers before the change.
There will be a message about Navient on StudentAid.gov/announcements, and Sallie Mae will communicate directly with all borrowers of federally-owned loans.
The Department of Education will also be posting periodic updates on its Information for Financial Aid Professionals (IFAP) and StudentAid.gov websites.
4. Your student loan status will not change.
If you’re currently in deferment or forebarence, you will not have to after the name change to Navient in fall 2014. If you have a request in process when the name change occurs, it will be completed by Navient.
5. Your current payment method will not change.
Your payment method will remain the same unless you decide to change it later.
For example, if you’re currently using automatic debit through Sallie Mae, you will not have to make any changes when the company switches to Navient. You will continue to have payments deducted through auto-debt.
6. Your student loan payments will go to Navient, not Sallie Mae.
If you pay your student loans by check, through a bank or using a bill paying service you will need to start using Navient’s name on payments instead of Sallie Mae’s.
Borrowers using these forms of payment will need to begin using Navient’s name after the name change occurs in the fall. Until that time, the borrower will continue to use Sallie Mae’s name.
There is no need to change your payment address, as these will be the payment address used by Navient.
A public relations move for Sallie Mae?
Given Sallie Mae’s shady student loan practices and complaints against the company, we’re not too surprised the company is trying to rebrand itself as a new servicer with students’ interests in mind.