Sallie Mae is the country’s largest originator and servicer of student loans and a regular contender in our Worst Company in America tournament. They’re about to become two much-hated companies, spinning off their loan servicing, loan management, and collections as a new company called Navient.
Sallie Mae announced its plans to do this back in May of 2013, but now the new company has a name. The U.S. Department of Education assures borrowers that there will be no changes for them…other than wondering to themselves every month what the heck a “navient” is. They’ve compiled a list of questions that borrowers might have.
A cursory Google search tells us that outside of the student loan biz, a Navient is a system that lets surgeons see what they’re doing inside a patient’s skull during endoscopic ear, nose, or throat surgery. It’s also the Instagram username of a guy who likes cars.
The current president and CEO of Sallie Mae will serve as Navient’s CEO. In a statement, he explained that the new name stands for what the company does. “Helping our customers navigate the path to financial success is everything we stand for,” he said, not realizing how hilarious that sounds to many of the company’s current customers. “Our new name — Navient — symbolizes the expertise, experience, and dedication we consistently deliver for our clients and customers.” So “ient” stands for “expertise, experience, and dedication?” Okay.
The formal separation will happen sometime in the second half of 2014. Sallie Mae will keep the company’s consumer banking operations, and new private student loans will originate from and be serviced by that company. Navient will originate federally guaranteed student loans. It will also service private student loans that Sallie Mae currently holds.
It’s not like “Sallie Mae” makes a whole lot of sense as a company name, either. That name comes from the original name back in the ’70s, Student Loan Marketing Association. Sallie Mae (official name: SLM Corporation) was born as a government-sponsored enterprise and later privatized, much like its similarly-named that are back under government conservatorship, Fannie Mae and Freddie Mac.