Sallie Mae, Inc. does a lot of things. It is the largest private student loan lender and servicer in the country. It also provides banking services, credit cards, insurance, and college savings plans. The company also services federal student loans from the now-extinct FFEL program, and it is one of the largest Direct Loan servicers for the U.S. Department of Education.
The U.S. Dept. of Education recently announced that Sallie Mae will be separating into two distinct companies. The company we now refer to as “Sallie Mae” will stick to handling private student loans and other private financial matters. The new company will be called “Navient.” Navient will be dedicated to servicing operations for federal student loans, both through the FFEL and the Direct loan programs.
What does this mean for you? Well, if you have federal student loans that are currently being serviced by Sallie Mae, later in 2014 your servicer will change to Navient. If you have private student loans with Sallie Mae, your private loans will remain with Sallie Mae and you will not be impacted. If you currently have both federal and private student loans with Sallie Mae, then your private loans will remain with Sallie Mae, and your federal loans will be serviced by Navient.
Your loans themselves will not be changing, and neither will their terms and conditions. In fact, nothing should really change at all, aside from the name of the company that will be servicing your federal loans. However, you’ll want to be aware of these upcoming changes (which should occur in the fall of 2014), and you should monitor your account closely to ensure that there are no issues during the course of the transfer. Servicing changes can sometimes cause huge headaches for borrowers, which is inevitable when dealing with large, complicated bureaucracies. So just be aware, and stay on top of your student loan accounts.