Navient will be the name of the new loan management, servicing and asset recovery company slated to be spun off by Newark area-based Sallie Mae. The company will be headquartered in the Wilmington area.
Sallie Mae plans to separate later this spring into two, publicly traded companies: a consumer banking business and the newly named loan management, servicing and asset recovery business. Sallie Mae has upgraded its headquarters in the Stanton-Christiana area south of Newark.
Upon completion of the transaction, Navient is expected to service nearly $300 billion in student loans and give customer support to aid 12 million customers in paying their education loans.
According to a release, the newly named Navient has a federal loan customer default at a rate that is 30 percent better than the national average. Navient also will continue to do asset recovery for government, higher education and business clients, as well as manage a portfolio of loans.
Concern has been growing that about the quality of student loans that reflect soaring tuition costs at universities and the difficulty of graduates to land jobs that allow payment on the loans. At the same time, Sallie Mae has been the target of criticism for its collection practices.
John (Jack) F. Remondi, president and CEO of Sallie Mae, announced the name and logo to employees earlier this week. Sallie Mae moved operations to Delaware in 2009 and later moved its headquarters to the former Nationwide-Continental American building in the Stanton-Christiana area south of Newark.
The company survived the financial crisis and legislation that transferred serving of some student loan servicing back to the federal government.
Prior to the spin-off, Sallie Mae’s sometimes outspoken CEO Albert Lord retired from the post. Lord had been critical of federal actions that affected Sallie Mae over the years.
Sallie Mae, which had been based in northern Virginia, has tapped into the local expertise of the credit card industry in areas such as collections and customer service. Remondi is a former executive with credit card giant MBNA, now Bank of America.
“Helping our customers navigate the path to financial success is everything we stand for,” said Remondi, who will serve as the new company’s CEO. “Our new name – Navient – symbolizes the expertise, experience, and dedication we consistently deliver for our clients and customers.”
With more than 6,000 employees and more than $2 billion in revenue, Navient will trade on the NASDAQ stock exchange under the ticker symbol NAVI. The company’s headquarters will be located in the Wilmington, Del., area, with centers in Fishers, Indianapolis, and Muncie, Ind.; Newark, Del.; Newton, Mass.; Reston, Va.; Washington, D.C.; and Wilkes-Barre, Pa. The company’s asset recovery subsidiaries Pioneer Credit Recovery and General Revenue Corporation operate in Arcade, Perry and Horseheads, N.Y.; Lake City, Fla.; Mason, Ohio; and Moorestown, N.J.
After the separation, the company’s consumer banking business will keep the Sallie Mae name and will continue to trade on the NASDAQ stock exchange under the ticker symbol SLM. Customers with student loans serviced by Sallie Mae will continue to conduct business as they do today, with no changes until the fall of 2014. This spring and summer, they will receive personalized information about their account and any changes.
