First Data (NYSE: FDC) and Navient (Nasdaq: NAVI) announced they have reached a strategic agreement for First Data to become the primary provider of technology solutions for Navient’s federal and private education loans.
This agreement expands on First Data and Navient’s longstanding partnership to support private student loans.
As a part of the agreement, First Data will acquire Navient’s student loan technology platform. Navient information technology talent who manage the platform will join First Data.
First Data is one of the world’s largest providers of credit processing services, with more than a billion accounts on file. This agreement will also position First Data as a major provider in the student loan technology market and allow First Data to further leverage its scale, technology, and deep experience on behalf of student borrowers. To reinforce First Data’s commitment to this space, First Data is establishing First Data Education, which will be led by Jeff Whorley. Jeff has been Group President, Asset Management and Servicing at Navient and will become a member of First Data’s Management Committee.
As one of the largest servicers of student loans, Navient will continue to provide its leading customer service, data insights, default prevention, back office support, and other services that have delivered a track record of customer success.
“We are delighted that Navient has chosen First Data as its partner. Student loan technology is a natural adjacency for First Data, and this agreement significantly expands our capabilities in this sector,” said Andrew Gelb, executive vice president, head of Global Financial Solutions, First Data. “Navient’s platform is well-proven, and we welcome the Navient employees joining our company.”
“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,” said Patricia Lawicki, executive vice president and chief information officer, Navient. “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.”
Navient will continue to service loans for its 12 million federal and private education loan customers, including those serviced under a contract with the U.S. Department of Education.
The agreement is expected to close in the third quarter, subject to certain closing conditions.