Wilmington-based Navient reported higher core earnings as it wrestles with student loan scrutiny
Navient reported core earnings for the second quarter of $131 million compared with $123 million for the same quarter a year ago.
The earnings came in ahead of forecasts, Zack’s reported.
An increase in diluted earnings per share was primarily the result of lower expenses, a reduction in income tax expense due to the new tax law, and fewer common shares outstanding.
“We continue to deliver positive results across the company,” said Jack Remondi, CEO, Navient. “Private credit performance was excellent, with charge-offs improving by 39 percent year over year. Our student loan refinancing products allow an increasing number of millennials to refinance their student loans and save thousands in interest expense. We added new healthcare clients in the quarter, contributing to our strong fee revenue growth. And, we remain focused on improving our overall operating efficiency that, together with our talented workforce, positions us well for the future.”
The company originated $629 million of Private Education Refinance Loans, a 26 percent increase from the first quarter of 2018.
On July 3rd, Navient closed on a strategic agreement with First Data related to Navient’s student loan technology platform and will create a more effective long-term variable cost structure for the business, officials said.
Remondi offered the following comment at the company’s earnings call conference regarding the continued investigation of the company by the Consumer Financial Protection Bureau.
“We are approaching the fifth anniversary since the CFPB served its first CID on the Company. This process began with a conclusion that the problems student loan borrowers were experiencing were caused by improper servicing. The on-going search for evidence to support this claim continues to come up empty-handed. The Bureau is now requesting yet another extension to continue its search. Five years and no evidence – it’s time for this case to be dismissed.
These regulatory cases do not address the real issues facing federal student loan borrowers. High cost, lack of financial planning resources, program complexity and low graduation rates are the issues that need to be addressed. We have long advocated for changes to address these issues. Today, we published a letter that lays out these issues and advances five recommendation that would improve outcomes for borrowers.
A release containing recommendations for better student loans is available at news.navient.com.”
