Navient’s jump into online student lending


Good morning,

News that Wilmington-based loan servicer Navient snapping up online student lender Earnest ended up being upstaged.

The announcement of the deal came at around the time the Pennsylvania Attorney General sued Navient over its business practices. Navient vehemently denies the allegations.

While the timing wasn’t ideal, the acquisition of San Francisco-based Earnest indicates that the company that split off from Sallie Mae a few years back has decided to move into a crowded arena.


(See story below on the cash deal).

In the process, the Wilmington company becomes at least an indirect competitor of Sallie Mae, which spun off Navient a few years ago so it could focus on the lending side of the student loan business. Navient focuses on the servicing area.

Navient bought Earnest for a reported $155 million or a little less than of the amount invested in a company that had ambitions of becoming a major player in the fintech world.

Earnest faces a formidable San Francisco neighbor, SofFi, which gained a presence in Delaware with the purchase of Zenbanx, a fintech company started by INGDirect founder Arkhadi Kuhlmann. Zenbanx has an employment site in Claymont.

Much larger SoFi has been making inroads in the student loan refinancing space that Earnest covets.

SoFi has problems of its own with its CEO and co-founder stepping down amid allegations of a hostile work environment for women

And I’d be remiss by not mentioning, Delaware start-up CollegeAve, which is also a player in the online student loan market.

It all adds up to an interesting and challenging opportunity for Navient, which hopes to finalize the Ernest this year.

Your thoughts, tips and ideas are always appreciated. If this newsletter was passed along, click here to subscribe at no charge. – Doug Rainey, Publisher

Facebook Comments
Previous articleSmall fire quickly extinguished Allen Harim plant in Harbeson
Next articleState launches donation drive for Puerto Rico
Delaware Business Now is a four-year-old, five-day-a-week newsletter and website operated by Bird Street Media LLC. Publisher and Chief Content Officer is Doug Rainey, a 30-year veteran of business journalism in the state of Delaware.  Business Now focuses on breaking business news in Delaware and immediate adjacent areas with apropriate background and perspective. Also offered exclusively in our FREE newsletter is commentary on state and regional issues. Have a complaint, question or even a compliment? Send an email to For advertising information, click on the About tab at the top of the home page Our business hours are 8 a.m. to 5 p.m., Monday through Friday. Call us at 302.753.0691.