Navient 8K Regulation FD Disclosure | NAVI 8 Oct 15

Navient

FFELP

Student Loan

Repayment Data Package

October 7, 2015

Exhibit 99.1

Forward-Looking Statements

The following information is current as of October 7, 2015 (unless otherwise noted). This presentation contains forward-looking statements and information based on management’s

current expectations as of the date of this presentation. Statements that are not historical facts, including statements about the company’s beliefs, opinions or expectations and

statements that assume or are dependent upon future events, are forward-looking statements. Forward-looking statements are subject to risks, uncertainties, assumptions and other

factors that may cause actual results to be materially different from those reflected in such forward-looking statements. These factors include, among others, the risks and uncertainties

set forth in Item 1A “Risk Factors” and elsewhere in Navient Corporation’s (“Navient”) Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and

Exchange Commission (“SEC”) and subsequent filings with the SEC; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and

regulations; changes in accounting standards and the impact of related changes in significant accounting estimates; any adverse outcomes in any significant litigation to which the

company is a party; credit risk associated with the company’s exposure to third parties, including counterparties to the company’s derivative transactions; risks inherent in the

government contracting environment, including the possible loss of government contracts and potential civil and criminal penalties as a result of governmental investigations or audits;

and changes in the terms of student loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws). The company

could also be affected by, among other things: changes in its funding costs and availability; reductions to its credit ratings or the credit ratings of the United States of America; failures

of its operating systems or infrastructure, or those of third-party vendors; risks related to cybersecurity including the potential disruption of its systems or potential disclosure of

confidential customer information; damage to its reputation; failures to successfully implement cost-cutting initiatives and adverse effects of such initiatives on its business; failures or

delays in the planned conversion to our servicing platform of the recently acquired Wells Fargo portfolio of Federal Family Education Loan Program (“FFELP”) loans or any other

FFELP or Private Education Loan portfolio acquisitions; risks associated with restructuring initiatives; risks associated with the April 30, 2014 separation of Navient and SLM

Corporation into two distinct, publicly traded companies, including failure to achieve the expected benefits of the separation; changes in the demand for educational financing or in

financing preferences of lenders, educational institutions, students and their families; changes in law and regulations with respect to the student lending business and financial

institutions generally; increased competition including from banks, other consumer lenders and other loan servicers; the creditworthiness of its customers; changes in the general

interest rate environment, including the rate relationships among relevant money-market instruments and those of its earning assets vs. its funding arrangements; changes in general

economic conditions; the company’s ability to successfully effectuate any acquisitions and other strategic initiatives; and changes in the demand for debt management services.

Overview

As the largest issuer of student loan-backed securities, we take our leadership role seriously. We have

created this data package to help investors and market participants better understand the performance

of our FFELP

loan assets and recent, improving performance trends in deferment, forbearance, defaults

and prepayments, recent performance trends relating to income-driven repayment plans.

The data that follows will address:

•

Vintage Pool Factor Performance

•

Deferment and Forbearance

•

Income-Driven Repayment

•

Loan Forgiveness

•

Consolidation and Prepayments

•

Additional Considerations

Methodology

•

Unless otherwise noted, the data presented reflect Navient-serviced FFELP loans that are

owned by Navient or by a securitization trust. The data are presented as of June 30, 2015. The

data do not include Navient-owned FFELP loans that are serviced by third parties, even where

Navient acts as the master servicer with respect to such FFELP loan in connection with a

securitization transaction

These loans were originated prior to the end of the FFELP program on June 30, 2010, and

most were originated prior to June 2008.

Since July 1, 2010, all federal student loans are made directly by the Department of

Education and serviced by companies including Navient; loans serviced under the

Department of Education contract are not included in this data

•

Vintage-based amortization analysis is limited to loans that were present in the portfolio for their

full repayment lives, and excludes loans that were acquired by Navient after initially entering

repayment

•

Each securitization trust is backed by a discrete pool of FFELP loans. The data set forth in this

presentation may not necessarily be reflective of the performance of the FFELP loans owned by

a particular securitization trust

•

The description of loan statuses and payment programs under the FFELP refer to the Common

Manual. First published in December 1995, the Common Manual is a cooperative effort of the

nation's guarantors that currently participate in the FFELP. The manual is a resource created

and maintained by guarantors to simplify and streamline the federal rules and regulations for the

FFELP program, and provides a single, standardized policy guidance for schools and lenders

Vintage Pool

Factor

Performance

Vintage Pool Factor Performance

•

The pool factor represents the aggregate remaining outstanding principal balance of the FFELP

student loans in a repayment vintage as a percentage of the aggregate principal balance for

such vintage at the beginning of repayment

•

While a percentage of loans remain in deferment and forbearance as vintages season, once

the pool factor is low, the dollar volume of loans in deferment and forbearance is small

20%

40%

60%

80%

100%

Months in Repayment

Stafford Loan Vintage Entering Repayment in 2001

20%

40%

60%

80%

100%

Months in Repayment

Consolidation Loan Vintage Entering Repayment in 2001

Repayment

Deferment

Forbearance

10% Clean-up Call Eligible

Original Scheduled Amortization

Note: Consolidation loan Months in Repayment begin after 180-day window during which FFELP permits additional loans to be added to the consolidation loan.

The 2001 cohort is selected for presentation because it had robust originations volume for both Stafford and Consolidation loans and shows many years of performance history.

Vintage Pool Factor Performance

•

In the Stafford loan portfolio, older vintages that experienced higher prepayment and consolidation activity

reached pool factors of less than 10% in the first 6-7 years of repayment. Among more recent Stafford loan

vintages with lower consolidation activity, the change in pool factor decreased during the recession and has

since increased

•

Among Consolidation loan vintages, the trends in pool factor have been more similar among the vintages

Note: Consolidation loan Months in Repayment begin after 180-day window during which FFELP permits additional loans to be added to the consolidation loan.

20%

40%

60%

80%

100%

Stafford Portfolio Pool Factors by Repayment Vintage

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

10% Clean

-up Call

20%

40%

60%

80%

100%

Months in Repayment

Consolidation Portfolio Loan Pool Factors by Repayment Vintage

2000

2001

2002

2003

2004

2005

2006

2007

2008

Months in Repayment

Vintage Initial and Current Principal Distribution

•

If all of the loans in each vintage had been pooled into a separate securitization trust, Stafford loan

vintages prior to 2006 would be eligible for redemption under the 10% optional servicer clean-up call.

Each of our actual securitization trusts contains loans from multiple underlying repayment vintages

10%

20%

30%

40%

50%

60%

70%

80%

90%

$10

$12

$14

$16

$18

$20

Initial and Outstanding Volume by Program and Vintage

Initial Principal Balance (Start of Repayment)

Current Principal Balance

Pool Factor

10% Clean-up Call

Note: Consolidation loan Initial Balance is set after the 180-day window during which FFELP permits additional loans to be added to the consolidation loan.

Deferment and

Forbearance

Deferment

•

Deferment is a tool available to borrowers to help them meet their loan repayment obligations.

Once the repayment period has begun, the borrower is entitled to defer payments on a FFELP

loan when applicable eligibility criteria are met

•

Deferments are entitlements. Generally, if a borrower demonstrates eligibility for a deferment

and provides the servicer with the necessary documentation required to establish eligibility, the

borrower may not be denied the deferment

•

Qualifying conditions include:

Enrolled in school at least half-time

Enrolled in an approved graduate fellowship program or rehabilitation program

Seeking, but unable to find, full-time employment

Economic hardship

Active or post-active duty military service

•

Time limit for deferments depends on the deferment type

There is no time limit for school or military service deferments

Public service, unemployment and economic hardship deferments are limited to 3 years of

cumulative usage

* Note, a complete description of FFELP

deferment rules can be found in the Common Manual at http://commonmanual.org/doc/ECMarchive/ECM2015.pdf

Forbearance

•

Forbearance is a tool servicers can use to assist borrowers in meeting their loan repayment obligations. By

granting forbearance, a servicer permits a temporary cessation of payments, allows an extension of time for

making payments, or temporarily accepts smaller payments than were previously scheduled

•

Servicers are encouraged to grant a forbearance to prevent the borrower from defaulting on the repayment

obligation or to permit the borrower to resume honoring the loan obligation after default

•

Today, forbearance is most often given when deferment and Income-Driven Repayment (IDR) plans are not

available to the borrower, hardship is considered to be temporary, or when IDR payments still pose a financial

hardship

•

There are four types of forbearance available to borrowers:

Administrative

forbearance

–

examples:

bankruptcy

filing,

closed

school

false

certification,

identity

theft,

or to cover periods of delinquency before or after an authorized deferment or forbearance

Discretionary

forbearance

–

given

where

the

obligor

intends

repay

the

loans,

but

cannot

make

payments

the

short-term

for

economic

hardship,

health,

other

acceptable

reasons

–

given

the

discretion

the

servicer

Mandatory

administrative

forbearance

–

examples:

national

emergency,

military

mobilization,

designated

disaster

area

–

does

not

require

borrower’s

request

Mandatory

forbearance

–

examples:

medical

dental

internship/residency,

active

military

state

duty

member

the

National

Guard,

Dept.

Defense

Student

Loan

Repayment

Program

–

servicer

must

grant

the forbearance upon borrower’s request

•

Time limit for forbearance depends on the forbearance type

There is no time limit for discretionary and most mandatory forbearances

Most types of administrative forbearances vary between 60 and 120 days in duration; some, like internship

and residency forbearance, extend over the duration of the eligible condition

* Note,

complete

description

FFELP

forbearance

rules

can

found

the

Common

Manual

http://commonmanual.org/doc/ECMarchive/ECM2015.pdf

Deferment Usage by Vintage:

Stafford Loans

•

Deferment usage increased during the Great Recession and has since declined

•

School deferment usage was higher in 2005 and 2006 when borrowers were allowed to

consolidate during school; during that time, their Stafford loans were placed in school

deferment while the consolidation was being processed

Deferment

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

10%

15%

20%

25%

30%

35%

40%

45%

50%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

Deferment

Months in Repayment

Month

Deferment Usage by Vintage:

Consolidation Loans

•

Consolidation loan deferment was higher in 2005 and 2006 when borrowers were allowed to

consolidate during school and defer their loans while they completed school

•

Deferment usage among Consolidation loan borrowers has since declined

10%

15%

20%

25%

30%

Deferment

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

10%

15%

20%

25%

30%

Deferment

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

Months in Repayment

Month

Forbearance Usage by Vintage:

Stafford Loans

•

Forbearance provides short-term relief to borrowers who cannot make their payments due to temporary hardship,

including some borrowers in the reduced payment phase of Income-Driven Repayment plans

•

Forbearance is higher in earlier repayment periods as borrowers transition from school to repayment or between

repayment programs

•

While forbearance increased during the Great Recession, this additional forbearance usage was not as high as the

levels experienced across all vintages in early stages of repayment

•

Servicers are permitted to grant short-term administrative forbearance (“FORM”) while borrowers apply and submit

documentation to change repayment plans. Beginning in 2014, the use of this type of forbearance increased, to assist

borrowers who need extra time to enroll in IDR or deferment

10%

15%

20%

25%

30%

35%

40%

Forbearance

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

10%

15%

20%

25%

30%

35%

40%

Forbearance

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

Months in Repayment

Month

Forbearance Usage by Vintage:

Consolidation Loans

•

Forbearance provides short-term relief to borrowers who cannot make their payments due to temporary hardship,

including some borrowers in the reduced payment phase of Income-Driven Repayment plans

•

Forbearance is higher in earlier repayment periods

•

While forbearance increased during the Great Recession, just as in Stafford loans, this additional forbearance usage

was not as high as the levels experienced across all vintages in early stages of repayment

•

Servicers are permitted to grant short-term administrative forbearance (“FORM”) while borrowers apply and submit

documentation to change repayment plans. Beginning in 2014, the use of this type of forbearance increased, to assist

borrowers who need extra time to enroll in IDR or deferment

10%

15%

20%

25%

30%

35%

40%

Months in Repayment

Forbearance

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

10%

15%

20%

25%

30%

35%

40%

Month

Forbearance

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

Forbearance Usage: Impact of

Forbearance Used for Repayment Plan Changes

•

Excluding the use of short-term forbearances that facilitate a borrower’s repayment plan change,

forbearance has been declining

•

Forbearance among Consolidation loans appears to increase in the later months of repayment,

because better performing vintages have not seasoned as far; considered individually, Consolidation

loan forbearance is decreasing in each vintage

10%

15%

20%

25%

30%

35%

40%

Forbearance by Loan Seasoning

Impact of FORM

Stafford Loan Average

Stafford Loan Average -

Excl FORM

Consolidation Loan Average

Consolidation Loan Average -

Excl FORM

10%

15%

20%

25%

30%

35%

40%

Month

Forbearance by Date

Impact of FORM

Stafford Loan Average

Stafford Loan Average -

Excl FORM

Consolidation Loan Average

Consolidation Loan Average -

Excl FORM

Months in Repayment

Deferment: Cumulative Usage to Date

Portfolio Loans Still Outstanding

•

Among the Stafford loans, more seasoned loans generally have used more combined school and hardship

deferment than less seasoned loans have used

•

Consolidation loan borrowers are less likely to have used deferment than Stafford loans, and usage is more

stable across vintages

•

With the introduction of Income-Based Repayment in 2009, borrowers in newer vintages may have repayment

options other than hardship deferment and forbearance

* The pool factor represents the current outstanding principal balance for the repayment vintage as a proportion of its principal balance at the start of repayment.

The cumulative months of deferment shown on this page includes months spent in both school and hardship deferment, including the anticipated duration of the current deferment for

loans in deferment as of June 2015.

Deferment Months Used

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Repayment Vintage and Pool Factor

Outstanding Stafford Loans by Vintage

Loans Remaining in Portfolio (Not Paid Off)

Distribution of Cumulative Deferment Months Used

1-12

13-24

25-36

37-48

49-60

> 60

Pool Factor

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Repayment Vintage and Pool Factor

Outstanding Consolidation Loans by Vintage

Loans Remaining in Portfolio (Not Paid Off)

Distribution of Cumulative Deferment Months Used

1-12

13-24

25-36

37-48

49-60

> 60

Pool Factor

Forbearance: Cumulative Usage to Date

Portfolio Loans Still Outstanding

•

Among the Stafford loans, more seasoned loans have used the most hardship forbearance

•

When compared to Stafford loan borrowers, Consolidation loan borrowers are less likely to have used

forbearance, and usage is more stable across vintages

•

With the introduction of Income-Based Repayment in 2009, borrowers in newer vintages may have

repayment options other than hardship deferment and forbearance

Forbearance Months Used

* The pool factor represents the remaining outstanding balance for the repayment vintage as a proportion of its initial repayment balance.

The cumulative months of forbearance shown on this page includes prior months spent in hardship forbearance only, including the anticipated duration of the current forbearance for

loans in forbearance as of June 2015.

20%

40%

60%

80%

100%

Repayment Vintage and Pool Factor

Outstanding Stafford Loans by Vintage

Loans Remaining in Portfolio (Not Paid Off)

Distribution of Cumulative Hardship Forbearance

Months Used

1-12

13-24

25-36

37-48

49-60

> 60

Pool Factor

20%

40%

60%

80%

100%

Repayment Vintage and Pool Factor

Outstanding Consolidation Loans by Vintage

Loans Remaining in Portfolio (Not Paid Off)

Distribution of Cumulative Hardship Forbearance

Months Used

1-12

13-24

25-36

37-48

49-60

> 60

Pool Factor

Discretionary Forbearance

•

Except as set forth below, Navient’s

policy limits cumulative discretionary forbearance usage to

60 months

•

While

the

average

duration

approximately

three

months,

FFELP

rules

allow

forbearance

be given in variable increments up to 12 months

•

In some cases, where a borrower began with forbearance near the 60 month policy limit, the

last forbearance given may cause their total usage to exceed the limit by up to 12 months

•

Only about 1.2% of the portfolio that remains outstanding

reflects some forbearance usage

in excess of 60 months

•

Nearly 60% of forbearance given over 60 months extends only one month past the policy limit

•

About 97% of forbearance given over 60 months extends no more than one year past the policy

limit

60 Months,

98.8%

> 60 Months, 1.2%

Cumulative Forbearance Distribution

Loans Remaining in Portfolio (Not Paid Off)

Repeat Usage of Deferment and Forbearance

•

Methodology:

Determine prior deferment and forbearance usage as of June 2010

Identify the same loan population in June 2015, and determine whether they used additional deferment or forbearance

•

Borrowers who have not used deferment or forbearance in the past generally are less likely to do so in the future

•

Borrowers with forbearance usage approaching the policy limit generally are also less likely to use additional forbearance

Cumulative Months

Used to Date

% Use Additional

Within 5 Years

% Do not Use

Within 5 Years

40%

60%

1-12

68%

32%

13-24

68%

32%

25-36

68%

32%

37-48

70%

30%

49-60

72%

28%

Stafford Loan Deferment

Cumulative Months

Used to Date

% Use Additional

Within 5 Years

% Do not Use

Within 5 Years

47%

53%

1-12

81%

19%

13-24

89%

11%

25-36

89%

11%

37-48

81%

19%

49-60

40%

60%

Stafford Loan Forbearance

Cumulative Months

Used to Date

% Use Additional

Within 5 Years

% Do not Use

Within 5 Years

16%

84%

1-12

44%

56%

13-24

48%

52%

25-36

42%

58%

37-48

49%

51%

49-60

54%

46%

Consolidation Loan Deferment

Cumulative Months

Used to Date

% Use Additional

Within 5 Years

% Do not Use

Within 5 Years

15%

85%

1-12

57%

43%

13-24

75%

25%

25-36

82%

18%

37-48

71%

29%

49-60

32%

68%

Consolidation Loan Forbearance

Example: 84% of

Consolidation

loans that never

used deferment as

of June 2010, had

still not used

deferment as of

June 2015.

Risk Profile of Loans in Deferment and Forbearance

•

Default risk is higher for older loans that have made fewer payments

2.7%

2.8%

0.6%

4.7%

1.8%

0.3%

5.6%

3.0%

1.3%

0.4%

5.3%

3.7%

2.1%

1.4%

0.5%

4.5%

4.0%

2.3%

1.6%

1.1%

0.4%

5.0%

3.9%

2.6%

1.7%

1.4%

1.0%

0.4%

5.8%

4.9%

3.1%

2.4%

1.7%

1.4%

0.9%

0.4%

6.0%

5.1%

3.8%

2.6%

2.0%

1.4%

1.2%

0.9%

0.3%

6.1%

5.3%

4.3%

3.1%

2.2%

1.8%

1.3%

1.1%

0.8%

0.3%

6.3%

5.4%

4.6%

3.8%

3.1%

2.3%

1.9%

1.5%

1.1%

0.7%

0.4%

6.2%

5.7%

5.2%

4.4%

3.9%

3.1%

2.4%

2.0%

1.6%

1.1%

0.8%

0.3%

7.0%

6.1%

5.3%

3.9%

3.8%

2.9%

2.5%

1.9%

1.6%

1.1%

0.8%

0.3%

7.6%

7.1%

6.0%

5.4%

4.7%

4.4%

3.4%

2.7%

2.6%

1.8%

1.4%

1.3%

0.8%

0.3%

8.3%

7.6%

6.7%

5.2%

5.4%

4.7%

4.4%

4.5%

3.2%

2.4%

2.2%

1.3%

0.9%

0.3%

8.4%

6.6%

7.3%

6.4%

6.2%

5.0%

4.4%

3.7%

3.2%

2.0%

2.4%

1.7%

1.1%

0.8%

0.3%

8.6%

7.5%

6.8%

6.1%

4.5%

5.2%

4.9%

5.1%

3.7%

3.8%

2.7%

1.9%

2.2%

1.8%

1.1%

0.6%

0.4%

8.6%

7.9%

6.6%

5.3%

5.4%

4.3%

5.1%

4.2%

3.4%

2.8%

1.8%

2.4%

1.5%

1.2%

0.7%

0.3%

7.7%

6.2%

6.7%

5.9%

5.1%

3.9%

4.5%

4.2%

5.0%

4.4%

4.2%

2.9%

2.6%

2.5%

2.0%

1.8%

1.0%

0.8%

0.4%

6.8%

7.1%

7.8%

6.9%

5.7%

4.6%

4.1%

6.0%

3.4%

6.0%

5.9%

4.3%

3.0%

2.2%

1.2%

1.7%

0.9%

0.7%

0.0%

6.8%

6.2%

8.5%

5.8%

4.4%

3.7%

2.6%

4.0%

2.6%

4.0%

5.0%

5.3%

4.3%

3.9%

2.7%

2.4%

2.2%

1.0%

0.4%

0.0%

> 20

8.8%

8.7%

9.4%

8.8%

7.5%

5.6%

5.7%

5.8%

5.0%

5.4%

5.8%

8.3%

6.0%

5.2%

4.5%

4.1%

2.4%

2.7%

1.6%

1.8%

1.2%

0.7%

Annualized Default Rate by Payments Made (Years)

•

The diagonal represents loans which have made payments

for the same number of years since they entered

repayment; they are the lowest risk

•

The more time has elapsed with fewer payments made, the

higher the risk

The Repayment portfolio distribution is concentrated

along the diagonal where loans have made the same

number of payments as months since the start of

repayment.

The deferment and

forbearance portfolios have

more loans that have never

made payments.

> 20

Risk Distribution of Loans in Deferment and

Forbearance

•

Loans in deferment and forbearance are more

likely to have made fewer payments since they

entered repayment, resulting in increased risk

expectations

•

Weighted average implied annualized default

performance by status:

Repayment –

2.2%

Deferment –

3.7%

Forbearance –

3.8%

The population of loans in repayment

has more payments made per time in

repayment. 24% have made the same

number of payments as they have

months since entering repayment.

Only 9% have made 0 payments.

The population of loans in

deferment are more likely to have

never made a payment. Only 1%

have made the same number of

payments as they have months

since entering repayment. 37%

have made 0 payments.

Distribution of Loans in Repayment, Time in Repayment vs. Payments Made

Distribution of Loans in Deferment, Time in Repayment vs. Payments Made

Distribution of Loans in Forbearance, Time in Repayment vs. Payments Made

The population of loans in

forbearance are more likely to have

never made a payment. Only 1%

have made the same number of

payments as they have months

since entering repayment. 37%

have made 0 payments.

> 20

Payments Made

Income-Driven

Repayment

Income-Driven Repayment Programs

•

There are two income-related programs available in the FFELP: Income-Sensitive Repayment and

Income-Based Repayment

•

Income-Sensitive Repayment

Available to borrowers since July 1, 1995

Borrowers are eligible if the servicer determines that the borrower’s documented income is

insufficient to repay their loan over the maximum repayment period

Payment is based on a percentage of the borrower’s monthly income between 4% and 25%

•

The borrower designates a payment amount within this range

•

The payment must cover monthly interest due, except during periods of reduced payment

forbearance

If the payment will not amortize the loan over the maximum repayment period, the servicer may

grant up to 5 years of mandatory administrative forbearance, during which time reduced payments

are made

The borrower must recertify their income annually to remain eligible for the program

No associated loan forgiveness

Represents about 5% of current IDR usage

•

Income-Based Repayment

Available to borrowers since July 1, 2009

Payment is capped based on the borrower’s income

See page 25 for detailed program mechanics

Represents about 95% of current IDR usage

Income-Based Repayment Program Structure

Partial Financial

Hardship (PFH)

Eligibility: If the calculated IBR

Payment is lower than the loan’s

regular payment, a Partial

Financial Hardship exists.

Borrower must recertify eligibility

every 12 months. Parent PLUS

loans are ineligible.

Payment Determination:

15% x [AGI

–

(1.5 x HHS

Poverty

Guideline for Family Size and

State)] / 12

Term: The remaining term is set as

the end date for the current PFH

status plus 120 months.

Subsidy: Available for subsidized

loans; if the PFH

payment does not

cover accrued interest, subsidy

available for first 3 years of PFH

enrollment (excluding time spent in

economic hardship deferment).

Capitalization: If applicable, at

transition out of PFH

to Permanent

Standard or Expedited Standard.

Permanent Standard

Eligibility: This is the default

repayment plan once a borrower is

no longer eligible for PFH

Payment Determination: 120 month

payment based on balance that

originally entered PFH.

Term: The remaining term is set as

the number of months it will take to

amortize the loan based on the

Permanent Standard payment

amount.

Subsidy: Same as non-IBR

loans:

available to subsidized loans in

deferment.

Capitalization: Same as non-IBR

loans: occurs upon transition from

non-payment status into repayment

Expedited Standard

Eligibility: A borrower may elect to

exit the IBR

program entirely,

which is known as Expedited

Standard.

Payment Determination: Based on

balance at the time of entry into

Expedited Standard. May opt to

enter other repayment programs

available under the FFELP, after

making at least one payment.

Term: The loan’s original statutory

term minus payments made to

date, including PFH

and

Permanent Standard payments.

Subsidy: Same as non-IBR

loans:

available to subsidized loans in

deferment.

Capitalization: Same as non-IBR

loans: occurs upon transition from

non-payment status into repayment

Forgiveness Eligible

Forgiveness Unlikely

Income-Based Repayment Calculation Examples:

IBR

Program With 15% of Discretionary Income

At Origination

•

Balance = $14,000

•

Term = 120 months

•

Rate = 6.8%

At Repayment

•

Balance = $16,380

•

Payment = $189

Enters PFH

•

AGI

= $20,000

•

Family Size = 2

•

Poverty Guideline =

$15,390

•

Payment = $0

After 3 Years PFH, salary

increases and no longer

qualifies

•

Balance = $19,722

•

Permanent Standard

(PS) Payment = $189

(Balance at PFH

start

amortized on a 120

month term)

•

Term = 160

(number of

months required to pay

off balance based on PS

payment)

At Origination (Immediate

Repayment)

•

Balance = $50,000

•

Term = 300

•

Rate = 5.5%

•

Payment = $307

Enters PFH

•

AGI

= $35,000

•

Family Size = 2

•

Poverty Guideline =

$15,390

•

Payment = $139

After 3 Years PFH, salary

increases and no longer

qualifies

•

Balance = $53,528

•

Permanent Standard

(PS) Payment = $543

(Balance at PFH

start

amortized on a 120

month term)

•

Term = 132

(number of

months required to pay

off balance based on PS

payment)

Alternative: Expedited

Standard Repayment

•

Balance = $53,528

•

Payment = $350

•

Term = 264 (300 month

term minus 36 months in

PFH+PS)

Example

–

Stafford

Loans:

Freshman

Through

Senior

Year

Unsubsidized

Loans

Example

–

Unsubsidized

Consolidation

Loan

Characteristics of Loans

Using Income-Driven Repayment

•

Loans in IDR* generally have higher balances and are more likely to have used deferment and forbearance in the past

IDR Avg

= $5,000

Non-IDR Avg

= $3,700

IDR Avg

= $30,000

Non-IDR Avg

= $17,000

IDR Avg

= 16

Non-IDR Avg

= 13

IDR Avg

= 27

Non-IDR Avg

= 16

IDR Avg

= 36

Non-IDR Avg

= 21

* Note: All characteristics expressed at the loan level.

Borrowers may have multiple loans.

IDR Avg

= 15

Non-IDR Avg

= 13

Stafford Loan Balances

Stafford Loan Deferment Usage

Stafford Loan Forbearance Usage

Deferment Months

Forbearance Months

Loan Balance

Deferment Months

Forbearance Months

Loan Balance

Consolidation Loan Balances

Consolidation Loan Deferment Usage

Consolidation Loan Forbearance Usage

Income-Driven Payment Amount Distribution:

Stafford Loans

•

Among Stafford loans by principal balance, 47% of IBR

loans in Partial Financial Hardship (PFH) do not owe a

payment, 45% owe some interest, and 7% owe full interest

or full interest and some principal

•

While the number of loans owing some principal has fallen

over time across vintages, older vintages remain more

likely to owe some principal and are less likely to owe no

payment at all

As of June 30, 2015, 46% of the

Stafford loans that do not owe a

payment are subsidized loans.

No Payment,

47%

Some Interest,

45%

Some

Principal, 7%

Stafford PFH

Payment Amount Due

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Proportion

PFH

Loans

Owing No Payment

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Owing Some Principal

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Proportion

PFH

Loans

Income-Driven Payment Amount Distribution:

Consolidation Loans

•

Among Consolidation loans by principal balance, 43% of

IBR

loans in Partial Financial Hardship (PFH) do not owe a

payment, 47% owe some interest, and 10% owe full

interest or full interest and some principal

•

The number of loans owing some principal has been

relatively consistent over time

•

The 2003-2006 vintages are most likely to owe some

principal

As of June 30, 2015, 44% of the

Consolidation loans that do not owe a

payment are subsidized loans.

2000

2001

2002

2003

2004

2005

2006

2007

2008

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Proportion

PFH

Loans

Owing Some Principal

Proportion

PFH

Loans

Owing No Payment

No Payment,

43%

Some Interest,

47%

Some Principal,

10%

Consolidation PFH Payment Amount Due

Income-Driven Repayment Usage by Vintage:

Stafford Loans

•

Usage

Income-Driven

Repayment

programs

has

increased

since

IBR

was

introduced in

2009

•

Newer vintages show higher early usage of IDR as they transition from school to repayment

10%

15%

20%

25%

30%

Income-Driven Repayment

(Reduced Payment Period)

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

10%

15%

20%

25%

30%

Month

Income-Driven Repayment

(Reduced Payment Period)

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average

Months in Repayment

1996

Income-Driven Repayment Usage by Vintage:

Consolidation Loans

•

Usage

Income-Driven

Repayment

programs

has

increased

since

IBR

was

introduced

2009

10%

15%

20%

25%

30%

Income-Driven Repayment

(Reduced Payment Period)

Months in Repayment

10%

15%

20%

25%

30%

Income-Driven Repayment

(Reduced Payment Period)

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

Month

2000

2001

2002

2003

2004

2005

2006

2007

2008

Average

Income-Driven Repayment Overlap

With Deferment and Forbearance

•

Loans in Income-Driven Repayment may be in repayment, deferment, or forbearance status

•

On average, 13% of loans in Income-Driven Repayment are also in deferment or forbearance

20%

30%

40%

50%

60%

70%

80%

90%

100%

10%

Repayment Status of Loans in Reduced Payment Period

Repayment

Deferment or Forbearance

Income-Driven Repayment Amortization

•

IDR loans amortize over time

Stafford loan pool factors for loans after entering IDR are between 0.6 and 0.7, five years after entering the

reduced payment period

Consolidation loan pool factors for loans after entering IDR are between 0.8 and 0.9, five years after

entering the reduced payment period

•

IDR loans amortize because, while they may not owe monthly payments, some borrowers make payments,

primarily in the form of voluntary prepayments or through consolidation

Note: Each line on the chart represents a monthly vintage of loans entering an IDR plan.

0.00

0.10

0.20

0.40

0.50

0.60

0.70

Months Since IDR Enrollment

0.90

1.00

0.30

0.00

0.10

0.20

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0.30

Stafford Pool Factors Since IDR

Enrollment

by Month Enrolled

Consolidation Pool Factors Since IDR

Enrollment

by Month Enrolled

Months Since IDR Enrollment

0.80

Default Performance of Loans in Income-Driven

Repayment

•

Defaults during the reduced payment period are low due to the decreased payment and the fact that some

loans have no payment due under Partial Financial Hardship

•

Older loans that continue to use IDR more than 8-10 years into repayment are more likely to struggle to make

payments if they no longer qualify for reduced payments

•

Loans that are newer to repayment perform better than the rest of the vintage whether they are making

reduced payments or have stepped up to higher payments

10%

15%

20%

25%

Annualized Default Rate,

IDR Statuses vs. Rest of Vintage

2004 Repayment Vintage

IDR

Reduced

Pmt

IDR

Step

Pmt

Non-IDR

10%

15%

20%

25%

Annualized Default Rate,

IDR Statuses vs. Rest of Vintage

2010 Repayment Vintage

IDR

Reduced

Pmt

IDR

Step

Pmt

Non-IDR

IBR

Loan

Forgiveness

Loan Forgiveness Under the Income-Based

Repayment Plan

•

Qualifying payments include:

PFH

payments, including $0 payments

Permanent standard payments

Any other payments made under a 10-

year repayment term (or any payments

not less than this amount)

Months of economic hardship deferment

•

The qualification date for measuring

whether 25 years has passed is:

The first payment (based on 120 month

payment) or economic hardship date

since July 1, 2009

For loans with no payments or

deferments,

the

first

IBR

date

•

The borrower does not have to request the

forgiveness for it to be granted

•

When a loan is forgiven, the servicer

receives reimbursement of 100% of

principal and interest

Loan Forgiveness Mechanics

•

Where debt and income are similar or income exceeds debt, it is more

likely that loans will amortize or default before they are forgiven

•

Where the debt level exceeds income, loan forgiveness is more likely to

occur

Income = $50,000

Balance = $50,000

Income = $50,000

Balance = $100,000

Assumptions:

Stafford loan

6.8% fixed interest rate

Starts PFH

immediately

3% annual income increase

2.25% inflation

Family size = 2

Repayment after 7/1/2009

Note: Schedules are created consistent with the methodology used in the Repayment Estimator published by the Department of Education.

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Loan

Amortization

IBR

Impacts:

Scenario 1

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Loan

Amortization

IBR

Impacts:

Scenario 2

Months Since Repayment Begin

Loan Forgiveness Expectations

•

Based on the distribution of loans by

aggregate balance, we expect between

22% and 76% of loans that have used

IBR

to become eligible for loan

forgiveness

If borrowers’ incomes rise to their

potential income based on their

educational attainment, we would

expect:

•

22% of loans currently in PFH

will become eligible for forgiveness

•

Represents less than 2% of the

total Stafford loan portfolio

If borrowers’ incomes do not improve

from current levels at all, we would

expect:

•

76% of loans currently in PFH

will become eligible for loan

forgiveness

•

Represents less than 7% of the

total Stafford loan portfolio

Distribution of Stafford Loans in PFH

by Loan Balance and Potential Income

Distribution of Stafford Loans in PFH

by Loan Balance and Current Income

Assumptions:

•

6.8% fixed interest rate

•

Starts PFH

immediately

•

3% annual income increase

•

2.25% inflation

•

Family size = 2

•

Repayment after 7/1/2009

Balances

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

10,000

7.9%

3.3%

2.1%

1.0%

0.5%

0.2%

0.1%

0.0%

0.1%

20,000

8.9%

3.4%

3.8%

2.5%

1.3%

0.6%

0.3%

0.1%

0.0%

0.1%

30,000

6.7%

2.4%

2.9%

2.2%

1.1%

0.5%

0.2%

0.1%

0.0%

40,000

4.5%

1.5%

1.9%

1.6%

0.9%

0.4%

0.2%

0.1%

0.0%

50,000

3.3%

1.1%

1.4%

1.2%

0.7%

0.3%

0.2%

0.1%

0.0%

60,000

2.6%

0.8%

1.1%

1.0%

0.6%

0.3%

0.1%

0.0%

70,000

1.5%

0.4%

0.5%

0.4%

0.2%

0.1%

0.0%

80,000

1.1%

0.3%

0.2%

0.1%

0.0%

90,000

0.8%

0.2%

0.1%

0.0%

100,000

0.7%

0.1%

0.2%

0.1%

0.0%

110,000

0.5%

0.1%

0.0%

120,000

0.4%

0.1%

0.0%

130,000

0.4%

0.1%

0.0%

140,000

0.3%

0.1%

0.0%

150,000

0.2%

0.1%

0.0%

160,000

0.2%

0.0%

0.1%

0.0%

170,000

0.2%

0.0%

0.1%

0.0%

180,000

0.2%

0.0%

0.1%

0.0%

190,000

0.2%

0.0%

200,000

0.1%

0.0%

0.4%

0.1%

0.0%

0.1%

Income

Balances

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

10,000

0.8%

1.2%

1.3%

1.4%

1.5%

1.3%

1.1%

0.9%

6.5%

20,000

0.9%

1.4%

1.5%

1.6%

1.7%

1.5%

1.4%

1.5%

1.2%

1.0%

7.3%

30,000

0.7%

1.1%

1.3%

1.2%

1.1%

1.2%

1.0%

0.8%

5.7%

40,000

0.5%

0.7%

0.8%

0.9%

0.8%

0.7%

0.5%

3.9%

50,000

0.4%

0.6%

0.7%

0.6%

0.5%

0.4%

2.9%

60,000

0.3%

0.4%

0.5%

0.4%

0.3%

2.3%

70,000

0.2%

0.3%

0.2%

1.3%

80,000

0.1%

0.2%

0.1%

0.9%

90,000

0.1%

0.2%

0.1%

0.7%

100,000

0.1%

0.6%

110,000

0.1%

0.4%

120,000

0.0%

0.1%

0.4%

130,000

0.0%

0.1%

0.0%

0.3%

140,000

0.0%

0.1%

0.0%

0.3%

150,000

0.0%

0.2%

160,000

0.0%

0.2%

170,000

0.0%

0.2%

180,000

0.0%

0.1%

190,000

0.0%

0.1%

200,000

0.0%

0.1%

0.0%

0.1%

0.4%

* Income amounts based on 2013 Census data by education level for college graduates and those with some college but no degree

Income

Prepayments

Consolidation Refinancing: Securitized Portfolio

•

Securitization

trust

consolidation

refinancing

activity

has

increased

within

the

last

months

•

In 2012, the availability of the Special Direction Consolidation Loan program drove significant

refinancing activity

•

This data consists of Navient-serviced

FFELP

loans

that

are

owned by securitization trusts

* Securitized Non-Consolidation population includes transactions with both Stafford and Consolidation loan volume.

10%

15%

20%

25%

30%

Collection Period End Date

CPR Attributable to Consolidation Refinancing,

Non-Consolidation Loan Trusts

by Trust Vintage

10%

15%

20%

25%

30%

Collection Period End Date

CPR Attributable to Reconsolidation,

Consolidation Loan Trusts

by Trust Vintage

2003

2004

2005

2006

2007

2009

2011

2012

2014

Prepayment Components:

Securitized Non-Consolidation Loans

•

The Constant Prepayment rate equals the annualized amount by which actual pool amortization

exceeds expected pool amortization, as a percent of loans in repayment

•

The Constant Default Rate is the portion of the Constant Prepayment Rate related to defaults

•

Voluntary prepayments have increased, while defaults have declined

•

This

data

consists

Navient-serviced

FFELP

loans

that

are

owned

securitization

trusts

* Excludes optional servicer purchased amounts.

** Securitized Non-Consolidation population includes transactions with both Stafford and Consolidation loan volume.

10%

15%

20%

25%

30%

-5%

10%

15%

20%

25%

30%

2004

2005

2006

2007

2008

2010

2012

2013

2014

Non-Consolidation Loan Trust

Voluntary Constant Prepayment Rates*

Non-Consolidation Loan Trust

Constant Default Rates

Collection Period End Date

Prepayment Components:

Securitized Consolidation Loans

•

The Constant Prepayment rate equals the annualized amount by which actual pool amortization

exceeds expected pool amortization, as a percent of loans in repayment

•

The Constant Default Rate is the portion of the Constant Prepayment Rate related to defaults

•

Voluntary prepayments have increased, while defaults have declined

•

This

data

consists

Navient-serviced

FFELP

loans

that

are

owned

securitization

trusts

10%

12%

Collection Period End Date

Consolidation Loan Trust

Constant Default Rates

10%

12%

Collection Period End Date

Consolidation Loan Trust

Voluntary Constant Prepayment Rates

2003

2004

2005

2006

2007

2009

2012

2014

Additional

Considerations

Structural Limits on Portfolio Extension:

Stafford Loan Program

Hardship

Deferment

Forb

IBR

Rpmt

Option

Longest Date

(ex Forgiveness)

Forgiveness

Date

End Date

None

Extended Term

11/1/2040

n/a

11/1/2040

36 Months

60 Months

None

Extended

Term

11/1/2048

n/a

11/1/2048

None

PFH

Perm Std

Term

7/1/2034

36 Months

60 Months

PFH

Perm

Std

Term

7/1/2039

None

PFH

Exp

Std

w/ Term Ext

11/1/2040

n/a

11/1/2040

36 Months

60 Months

PFH

Exp

Std

w/ Term Ext

11/1/2048

n/a

11/1/2048

Stafford Loan Final Payoff Dates Given Repayment Program Usage

•

Loan forgiveness, policy limits on hardship deferment and forbearance, and portfolio

performance dynamics mean that every status has an end point

•

Additional considerations:

The usage of school deferment is not limited under the FFELP, but is low and declining

•

About 5.4% of securitized FFELP

loans are currently using school deferment

•

Usage of school deferment has declined by 10% over the past year and is down to about half the peak levels

experienced at the end of 2006

The

dates

denoted

with

depend

the

duration

the

PFH

period

and

the

number

terms

required

amortize

the loans based on the standard payment, but in no case will be longer than the forgiveness period

Loans that entered repayment after 2009 may have additional time before the forgiveness dates in 2034 (without

forbearance) or 2039 (with forbearance); 99% of Stafford loans will have entered repayment by the end of 2015

Structural Limits on Portfolio Extension:

Consolidation Loan Portfolio

Hardship

Deferment

Forb

IBR

Rpmt

Option

Longest Date

(ex Forgiveness)

Forgiveness

Date

End Date

None

Max Term (360 months)

1/1/2038

n/a

1/1/2038

36 Months

60 Months

None

Max Term (360 months)

1/1/2046

n/a

1/1/2046

None

PFH

Perm Std

Term

36 Months

60 Months

PFH

Perm

Std

Term

None

PFH

Exp

Std

w/ Max Term

1/1/2038

n/a

1/1/2038

36 Months

60 Months

PFH

Exp

Std

w/ Max Term

1/1/2046

n/a

1/1/2046

Consolidation Loan Final Payoff Dates Given Repayment Program Usage

•

Additional considerations:

The usage of school deferment is not limited under the FFELP, but is low and declining

The dates

denoted

with

depend

the

duration

the

PFH

period

and

the

number

terms

required

amortize

the

loans

based

on the standard payment, but in no case will be longer than the forgiveness period

The

dates

denoted

with

depend

the

enrollment

date

into

PFH

(or

economic

hardship

deferment)

for

Consolidation

loans

with

original terms longer than 120 months

•

For loans with longer terms, only payments after the enrollment/deferment date will count towards forgiveness

•

We believe that the step up to Permanent Standard may cause many Consolidation borrowers to opt for Expedited Standard

repayment, or, if their remaining terms under Expedited Standard are low, they may be at risk for default

•

Further, income and amortization trends mitigate against significant IBR

usage among deeply seasoned loans

If loans are amortizing, it is likely that their balances are affordable under their income as borrowers age and the loans season

If the loans

are

not

amortizing

through

deferment

forbearance,

they

are

likely

use

IBR

the

near

term;

they

have

not

used it by later in the loans’ repayment life, borrowers are most likely ineligible or unlikely to enroll

•

Loan forgiveness, policy limits on hardship deferment and forbearance, and portfolio

performance dynamics mean that every status has an end point

Navient (NAVI) 8-KRegulation FD Disclosure