Delaware -based Sallie Mae is launching a new loan management, servicing and asset recovery company called Navient, Inside Higher Ed reported.
John F. Remondi, president and CEO of Sallie Mae, announced Tuesday that Sallie Mae is splitting into two, distinct, publicly traded companies this spring. Sallie Mae will remain as a consumer banking business, issuing private education loans and products like CDs and savings accounts, while Navient will house loan management and servicing operations, Inside Higher Ed reported.
"Helping our customers navigate the path to financial success is everything we stand for," Remondi, who will serve as the new company's CEO, said in a statement. "Our new name - Navient - symbolizes the expertise, experience, and dedication we consistently deliver for our clients and customers."
Navient, which will be the larger company, will have more than 6,000 employees and more than $2 billion in revenue. .
Navient is expected to service nearly $300 billion in student loans, providing customer support to assist 12 million customers in successfully paying their education loans, upon completion of the transaction.
Sallie Mae officials said the new company will continue its strong track record of results: its federal loan customers default at a rate 30 percent better than the national average. Navient also will continue to perform asset recovery for government, higher education and business clients, as well as manage a portfolio of FFELP and private loans.
The split comes after Illinois Attorney General Lisa Madigan opened an investigation of loan servicing complaints against Sallie Mae amid a backdrop of increasing scrutiny of education debt.
Navient's corporate 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.
Sallie Mae will keep its current name and its existing headquarters in Delaware where it employs about 1,200 people, The News Journal reported.
