Navient announces strategic actions following in-depth business review

• Will outsource student loan servicing and create variable expense model
• Initiates exploration of strategic options for business processing division, including potential divestment
• Intends to streamline shared service infrastructure and corporate footprint
  

HERNDON, Va., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Navient (Nasdaq: NAVI) today announced strategic actions to simplify the company, reduce its expense base, and enhance its flexibility as a result of the in-depth review overseen by the Board of Directors over the past several months.

The strategic actions include outsourcing the servicing of its student loan portfolio to a third party; exploring strategic options for its business processing division—including potential divestment; and streamlining the company’s corporate functions to align with a simplified business model.

“After a thorough review, we are announcing targeted actions intended to simplify our business, reduce our expense base, and increase our financial and operating flexibility,” said David Yowan, president and CEO of Navient. “Over the longer-term, we believe these actions will increase the value shareholders derive from our loan portfolios and the returns we can achieve on business-building investments. As we embark on this important work, we also remain focused on running and growing our business and meeting the needs of our borrowers and clients. We look forward to continuing to provide updates as we establish a new foundation for Navient’s future success.”

Key elements of the steps announced today include the following.

Adopt a variable, outsourced servicing model

Navient has entered into a binding letter of intent that will transition its student loan servicing to MOHELA, a leading provider of student loan servicing for government and commercial enterprises. This transaction is intended to create a variable cost structure for the servicing of our student loan portfolios and provides attractive unit economics across a wide range of servicing volume scenarios. Navient and MOHELA will work toward ensuring a seamless transition in the coming months and providing customers with uninterrupted servicing of their loans.