Weekly Wrap: Navient forbearance rates dip
Navient Solutions' second asset-backed transaction involving federally guaranteed FFELP loans in 2020 saw forbearance rates cut by more than half compared to the first transaction priced in August.
According to presale reports from Moody's Investors Service, S&P Global Ratings and DBRS Morningstar, loans in forbearance account for 14.9% of the Navient 2020-2 pool, compared to 33% in Navient 2020-1.
Navient had launched a coronavirus forbearance program that, through June 30, had offered three months of payment deferrals for borrowers who requested relief. After July 1, the relief program was pared back to one month.
For oustanding transactions recently backed by Navient FFELP pools, the forbearance rates have also fallen month-over-month. The peake 31.3% forbearance rate for Navient 2019-4, for example, had been reduced to 20% as of the September reporting period.
On Oct. 5, a bond sale backed by $263 million in rehabilated and non-rehabilitated FFELP sponsored by the New Hampshire Higher Education Loan Corp. included a pool in which 10.8% of the loans were in forbearance. Moody's Investors Service considered that an "elevated" level for a FFELP pool that will traditionally (unrelated to recent COVID-19 programs) have 20% of loans in deferment or forbearance.