Navient is preparing the first student loan securitization of 2015, the $689.0 million Navient Private Education Loan Trust 2015-A according to Fitch Ratings.
Navient, which was spun off from Salle Mae, issued two private student loan deals in 2014 totaling just over $1 billion. Compared with recent transactions, the pool of loans backing 2015-A has noticeably more loans made to two-year and proprietary/vocational schools, 12.4%, which Fitch expects to perform worse than loans made to four-year schools.
Meanwhile, the concentration of Smart Option loans with interest-only and fixed payment options in the 2015-A pool have increased and those with deferred payment decreased. Fitch expects that Smart Option loans with the interest-only and fixed payment options to perform better than those with deferred payment option.
Among other risk factors cited by Fitch, the average FICO score at origination for all borrowers is 731 for Navient 2015-A, lower than recent Navient transactions. Co-signed loans accounted for approximately 80% of the pool, consistent with recent transactions. Fitch expects higher defaults from loans without a co-signer or with a low borrower FICO score.
In addition to private student loans, Navient is also a frequent securitizer of federally guaranteed student loans; it completed eight such deals in 2014.