Student loan giant SLM Corp., better known as Sallie Mae, will be split into two separate companies this week: one a consumer bank focusing on education lending and the other a loan servicer and collection agency.
Sallie Mae’s servicing and collections business will begin operating Wednesday under a new publicly traded company called Navient Corp. Shareholders will receive a new share in Navient for every SLM share they own.
Upon completion of the transaction, 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. Navient also will continue to perform debt recovery services for government, higher education and business clients, as well as manage a portfolio of FFELP and private loans.
With more than 6,000 employees and more than $2 billion in revenue, Navient will trade on the NASDAQ stock exchange under the ticker symbol NAVI. Navient 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.
Navient’s debt collection subsidiaries Pioneer Credit Recovery and General Revenue Corporation operate in Arcade, Perry and Horseheads, N.Y.; Lake City, Fla.; Mason, Ohio; and Moorestown, N.J.
After the separation, the company’s consumer banking business will retain the Sallie Mae name and will continue to trade on the NASDAQ stock exchange under the ticker symbol SLM.
The lending and banking company will continue to focus on student loans and will seek to expand its offerings into areas such as personal loans for recent graduates with professional degrees and secured loans for health-care professionals. Sallie Mae made $3.76 billion in education loans last year and has set a target of more than $4 billion in education loans annually.