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Payment card processor First Data Corp. is getting into student-loan processing with its acquisition of Navient Corp.’s technology platform.
Terms of the deal announced Wednesday were not revealed. An undisclosed number of Navient employees will become First Data employees, and Jeff Whorley, who has been group president of asset management and servicing at Navient, will lead First Data’s new First Data Education unit.
Wilmington, Del.-based Navient services more than $300 billion in education loans for approximately 12 million customers, according to a regulatory filing. Navient’s portfolio consists of loans through the U.S. Department of Education’s direct student-loan program, and guaranteed or insured student loans under the Federal Family Education Loan Program. Navient also claims to hold the largest portfolio of private education loans.
Atlanta-based First Data noted in a news release that it already has more than a billion credit accounts on file. “Student-loan technology is a natural adjacency for First Data, and this agreement significantly expands our capabilities in this sector,” Andrew Gelb, executive vice president and head of First Data’s Global Financial Solutions segment, said in the release. “Navient’s platform is well-proven, and we welcome the Navient employees joining our company.”
A First Data spokesperson tells Digital Transactions News that “we’re going to be the primary technology provider for public and private student loans.” First Data, however, will not perform for Navient such functions as loan originations, settlements, or modifications, the spokesperson says. Navient will continue to provide customer service, data analysis, default prevention, back-office support, and other services to the loan portfolio, according to the release.
First Data already provided record-keeping and ancillary services to part of Navient’s private student-loan portfolio, according to the spokesperson.
“This agreement with First Data enhances our ability to bring agility, scalability, and innovation across our digital technologies enabling us to continue to deliver better outcomes for the student borrowers we serve,” Navient executive vice president and chief information officer Patricia Lawicki said in the release “First Data understands our business, and this agreement also gives us the ability to create a more effective long-term cost structure for our business.”
Besides its education and consumer lending operations, Navient provides business processing services for non-education government and health-care clients.
