With the sector facing serious headwinds — from declining enrollment during the pandemic to the prospect of a Biden administration making college free for many families — the departure of a major player could be a shot in the arm for the likes of Discover and Sallie Mae.
Ally, Synchrony, Discover, Sallie Mae and Navient are the other lenders the ratings firm downgraded, citing the impact that the coronavirus crisis is having on their revenues and profits.
Navient Corp. shares surged after Canyon Capital Advisors said it could boost a $3.1 billion takeover offer that was rejected by the student-loan servicer.
The company has filed a request with a federal judge in Pennsylvania for a summary judgment in two counts against it, accusing the bureau of failing to provide evidence.
The Massachusetts senator said the government’s findings bolster allegations that the servicer steered borrowers into expensive student loan forbearance plans.
A two-year-old lawsuit by the CFPB may be languishing, but nine members of the Teachers Federation of America sued the student loan servicing giant alleging that it misled borrowers in public service professions in order to line its pockets.
Four lenders, led by Sallie Mae, have long dominated the market for private student loans. But they could soon face new competition from Navient and Nelnet.
