Navient Aims to Transfer Student Loans: What Borrowers Should Know for 2025

Student Finance & Loan Expert

As Navient gears up to transfer its student loan servicing responsibilities to another provider, borrowers must stay informed about what this means for their loans. Student loan debt exceeds $1.7 trillion nationwide, with a sizable portion under Navient’s portfolio. If you have Navient student loans, this guide will help you understand the transfer process and its potential impact on your repayment plan.

Key Things You Should Know About Navient Aims To Transfer Student Loans

Navient, once a major player in the education loan sector, will transfer its servicing responsibilities to MOHELA.
The transfer includes private Navient student loans and FFEL loans.
Although MOHELA will handle day-to-day servicing, Navient will still manage loan terms, interest rates, and repayment options.
Borrowers will receive notices from Navient before and from MOHELA after the transfer.

Who took over Navient student loans?
When will my Navient loans be transferred?
What types of loans are included in Navient's transfer?
Will my loan terms change when my Navient loans are transferred?
How will I be notified about the transfer of my Navient student loans?
Do I need to take any action when my Navient loans are transferred?
Are there any benefits to the transfer of my Navient loans?
What are my repayment options after my Navient loans are transferred?
Will loans with Navient be forgiven?
Can I explore refinancing options for my loans after the Navient transfer?
What should borrowers consider when choosing a new servicer?
Are there any tax implications resulting from the loan transfer?
What should I do if I encounter discrepancies with my account details after the transfer?
Can further education enhance my loan repayment strategy?
What borrower rights protect me during the loan transfer?
How can I safeguard my credit score during the loan transfer?
Can student loans be used to cover housing expenses during the transfer?
What should I do if my payments are disrupted during the transfer?
Are there any unforeseen risks during the loan transfer?
Should I Reevaluate My Long-Term Financial Strategy During the Loan Transfer?
Other Things You Should Know About Navient Student Loans

Who took over Navient student loans?

Trends in student aid once indicated that Navient once held one of the largest portfolios of education loans, federal and private. However, it is now exiting the business and transferring the loans of 2.7 million borrowers to new servicers.

Navient stopped servicing federal student loans in December 2021, when it ended its contract with the U.S. Department of Education. The affected student loans were transferred to Aidvantage, another student loan servicer. However, Navient continued to service some Federal Family Education Loan Program (FFELP) and private loans.

Navient has since resolved to outsource student loan servicing entirely, a move to improve borrower services and eliminate nearly $400 million in operating expenses. All Navient student loans will be transferred to the Missouri Higher Education Loan Authority (MOHELA), one of America's largest student loan servicers.

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When will my Navient loans be transferred?

A majority of Navient’s federal student loan portfolio is now managed by Aidvantage. If you are already with Aidvantage, nothing will change unless you decide to switch providers.

If you used private loans to cover your college fees, your loan is likely still with Navient. All remaining Navient student loans will be transferred to MOHELA in October 2024. The transfer will be gradual and take an estimated two years to complete.

What types of loans are included in Navient's transfer?

You will be affected by this transfer if you have private Navient student loans or loans under the Federal Family Education Loan (FFEL) Program. FFEL loans are different from Direct Loans, which are directly held by the U.S. Department of Education and were not part of Navient's servicing contract. Per a report by Haverstock, FFEL loans account for $38 billion of this transfer, while private student loans make up the remaining $17 billion.

The chart below shows Navient student loan portfolio as of 2024.

Will my loan terms change when my Navient loans are transferred?

The Navient transition is influenced by the effects of rising college tuition, which have intensified financial pressures on student borrowers. The average borrower owes about $40,681 in federal and private student loans, which can rack up extensive interest over the years. A sudden change in loan terms can derail repayment and lead to default.

Despite outsourcing the servicing to MOHELA, Navient will retain ownership of the entire loan portfolio under the terms of their agreement. As such, any decisions regarding Navient student loans, including your loan terms, interest rates, and repayment options will still be made by Navient.

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How will I be notified about the transfer of my Navient student loans?

You don’t need to worry about falling behind on student loan payments during the transition. Navient and MOHELA will send updates related to the transfer of Navient student loans.

Navient will send you a notice before your account is transferred, and MOHELA will send a post-transfer notice once your loans have been moved. Once the transfer is complete, you can create an online MOHELA account and begin making payments through its website.

Do I need to take any action when my Navient loans are transferred?

Because the terms of your loan will remain the same, you will not have to take immediate action when your Navient student loans transfer. However, you must update your contact information before the transfer happens. You can check or update your details on the Navient website.

While there is no need to reapply for repayment plans or borrower benefits, you should log into your MOHELA account after the transfer to confirm that your loan details are accurate and to familiarize yourself with their services.

Are there any benefits to the transfer of my Navient loans?

Navient does not have the best reputation among borrowers. Research by Hanson shows that in 2015, Navient received 43% of all federal servicer complaints. The loan servicer was subsequently sued by the Consumer Financial Protection Bureau (CFPB), which alleged gross mismanagement.

The transfer to MOHELA is expected to improve customer service. It may also help borrowers save on monthly payments. While low-cost loans cannot beat the value of scholarships for online students, MOHELA offers a 0.25% interest rate reduction for enrolling in automatic payments. This discount can add up over the life of your loans.

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What are my repayment options after my Navient loans are transferred?

Whether you took out loans for college or MBA financial aid, you have a few options for repayment. These include:

Level repayment plans, where your total loan amount is divided into equal monthly payments over a fixed term, typically 10 years. This is the most common federal student loan repayment plan with over 15 million borrowers enrolled. Private loans are paid this way as well.
Graduated repayment plans, which start borrowers off on lower monthly payments and gradually increase them over a fixed term, usually 10 years. This plan can be beneficial for recent graduates with lower starting salaries.
Income-driven repayment (IDR) plans, which base monthly payments on the borrower’s income and family size. These are helpful for borrowers with lower incomes or high debt-to-income ratios. There are several IDR plans with varying eligibility requirements and payment caps. Borrowers under this plan typically pay more in interest but can apply for loan forgiveness by the end of their loan terms, which last 20 or 25 years.

The following chart illustrates the distribution of borrowers by federal student loan repayment plan based on 2024 data from the Department of Education.

As previously mentioned, the move to MOHELA will not affect your progress toward loan forgiveness. You will still have access to the repayment options you already had before your Navient student loans were transferred.

Will loans with Navient be forgiven?

If your Navient student loans are eligible for forgiveness, that will not change once they move to MOHELA. The transfer should not impact your progress toward loan forgiveness. However, forgiveness is not automatic. You will have to apply to have your remaining balance waived as soon as you meet all the requirements for your program. The loan term for many federal loan forgiveness programs is 20 years, the average time to pay off student loans.

Can I explore refinancing options for my loans after the Navient transfer?

Refinancing your student loans can be a viable way to lower your interest rates and reduce your monthly payments, especially after they are transferred. Some borrowers can secure better loan terms by working with private lenders. However, refinancing federal loans into private ones means losing access to benefits like income-driven repayment plans and federal loan forgiveness programs. This trade-off makes refinancing an optimal choice for borrowers with strong credit histories and stable incomes who prioritize lower rates over federal protections.

Additionally, if you are juggling multiple responsibilities, balancing work and education, you may want to explore specialized funding options tailored for such scenarios. For instance, many private lenders provide refinancing options alongside solutions like part time student loans, which are designed to meet the financial needs of individuals pursuing education on a flexible basis. Carefully compare lenders, terms, and benefits before deciding about refinancing.

What should borrowers consider when choosing a new servicer?

When evaluating student loan servicers, it is crucial to consider their customer service reputation, repayment options, and accessibility. With the ongoing transition of Navient loans to MOHELA, borrowers may want to take this opportunity to assess whether their current servicer aligns with their needs. If MOHELA’s service falls short of your expectations, exploring other student loan companies can be a worthwhile step to finding tailored repayment options or refinancing offers.

Key factors to assess include interest rate discounts for automatic payments, responsiveness to inquiries, and digital platform usability. Remember to prioritize servicers who provide clear communication and robust tools to manage your loans effectively. Whether you are pursuing loan forgiveness or looking to restructure your payments, ensuring your servicer supports your financial goals can positively impact your borrowing experience. A well-researched choice can help you secure better terms and mitigate potential challenges during repayment.

Are there any tax implications resulting from the loan transfer?

The transfer process is primarily administrative and does not typically trigger taxable events. However, changes in loan forgiveness status, refinancing arrangements, or repayment modifications could indirectly influence your tax situation. It is essential to confirm that any updates in your loan servicing do not alter the terms associated with tax benefits or obligations. Consulting a tax professional can help you verify that your records accurately reflect these changes and that you are taking advantage of any available deductions. Additionally, consider opportunities for advanced education, such as online PhD programs without dissertation, which may support improved earning potential and a more robust financial strategy over time.

What should I do if I encounter discrepancies with my account details after the transfer?

If you notice any inconsistencies in your loan information after the transfer, immediately verify your account details on MOHELA’s digital platform and document any errors. Reach out directly to MOHELA’s customer support with specific documentation to resolve discrepancies. If the situation remains unresolved, consider filing a formal complaint with the appropriate federal or state student loan ombudsman. For borrowers evaluating further funding solutions, including alternatives for student loans when parents have bad credit, a prompt and documented response is essential to safeguard your financial interests.

Can further education enhance my loan repayment strategy?

For borrowers reassessing their financial future amid this loan transfer, evaluating further education options can be instrumental in boosting earning potential. Targeted programs—especially those designed for fast entry into the workforce—can improve income prospects and, by extension, loan repayment capacity. Research each program’s accreditation, cost-effectiveness, and long-term benefits to ensure alignment with your financial goals. For instance, exploring an easiest associate's degree might offer a strategic pathway to enhance career outcomes without extensive time commitments.

What borrower rights protect me during the loan transfer?

Borrowers deserve full transparency and protection throughout the loan transfer process. Both Navient and MOHELA are required to comply with federal guidelines, ensuring accuracy in recordkeeping, prompt notifications of changes, and effective dispute resolution mechanisms. If issues extend beyond simple discrepancies—such as unauthorized modifications or delays—borrowers have the right to escalate their concerns through formal channels, including state ombudsman services or federal consumer protection agencies. Additionally, for those looking to minimize their financial burden, consider exploring cost-effective educational alternatives, such as online colleges that accept FAFSA, which may offer lower tuition fees and flexible study options.

How can I safeguard my credit score during the loan transfer?

Regularly review your credit reports to promptly spot any inaccuracies resulting from the servicing shift. Establish alerts with major credit bureaus and verify that reported payments reflect on time activity throughout the transition. Consider consulting with a financial advisor to ensure your records remain accurate and to explore strategies—such as timely reconciliations or even evaluating alternative educational investments like highest paying bachelor degrees—that could enhance your long-term financial standing.

Can student loans be used to cover housing expenses during the transfer?

Borrowers facing financial gaps during the transition period might experience challenges in meeting essential living costs. While student loans are primarily designed to fund educational expenses, some programs provide provisions that allow for limited use in covering housing needs under specific circumstances. It is crucial to consult the terms of your loan and applicable federal guidelines before reallocating funds. For detailed guidance on permitted uses, please review the information provided in can student loans pay for housing. Additionally, consider seeking financial counseling to explore viable support mechanisms without jeopardizing your future repayment strategy.

What should I do if my payments are disrupted during the transfer?

If payment disruptions occur during the servicing transition, immediately verify your account information with both the outgoing and incoming servicers to prevent late fees or negative credit impacts. Contact customer support promptly with documented evidence of any discrepancies and follow up to ensure that all adjustments are accurately recorded. Should temporary financial relief be required to cover any unexpected gaps, consider exploring expedited funding solutions such as student loan fast to maintain your repayment schedule.

Are there any unforeseen risks during the loan transfer?

Although the transfer is structured to be straightforward, unexpected issues such as delayed notifications, record mismatches, or communication lapses can occur. Borrowers should closely monitor digital account updates and verify that all changes are accurately documented. Maintain detailed records of correspondence from both servicers and contact customer support immediately when discrepancies arise. Additionally, reviewing options for further education investments—such as opportunities at cheap online schools—can serve as a strategic contingency in managing financial challenges during the transition.

Should I Reevaluate My Long-Term Financial Strategy During the Loan Transfer?

Review your overall financial landscape by analyzing current debt management practices, income projections, and risk tolerance. Take advantage of the transition period to reassess your budget, explore consolidation options for higher-cost debts, and evaluate opportunities for additional professional growth. Consider advanced learning initiatives such as pursuing an online degree for seniors to enhance your earning potential. Engage a financial advisor to verify that strategic adjustments align with your long-term financial goals.

Key Findings

About 2.7 million borrowers will be affected by Navient's transfer.
Navient's move to outsource student loan servicing aims to improve borrower services and eliminate nearly $400 million in operating expenses.
FFEL loans account for $38 billion, while private student loans make up $17 billion of this transfer.
The average borrower holds about $40,681 in federal and private student loans as of 2024.

Other Things You Should Know About Navient Student Loans

How can I tell if my Navient loan is private or federal?

To see if your Navient student loans are federal or private, log into your Federal Student Aid account on studentaid.gov. This platform will list all your federal student loans. If your Navient loan appears there, it is federal. If not, it is likely a private loan. You can also contact your servicer directly for clarification.

How do I know if I qualify for Navient forgiveness?

You can ask your servicer if your Navient student loan qualifies for forgiveness. After the transfer, you can bring this up with your assigned representative at MOHELA.

Can I consolidate my Navient student loans?

If you have multiple federal student loans, you can consolidate them into a Direct Consolidation Loan with a new interest rate and repayment term. You can apply to consolidate your loans through your loan servicer or the Federal Student Aid website. However, consolidating your loans might affect your eligibility for loan forgiveness programs.

References:

Hanson, M. (2024, July 15). Student Loan Debt Statistics [2024]: Average + Total Debt. Education Data Initiative. Retrieved July 25, 2024, from https://educationdata.org/student-loan-debt-statistics