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    Jeff Adelson • Morgan Stanley

    Jeff Adelson's questions to Navient Corp (NAVI) leadership

    Jeff Adelson's questions to Navient Corp (NAVI) leadership • Q2 2024

    Question

    Jeff Adelson sought more specific details on the timeline for achieving the company's significant expense reductions and asked about the competitive dynamics and capital allocation strategy for the in-school loan origination business.

    Answer

    CEO David L. Yowan detailed three parallel initiatives for expense reduction: outsourcing (well underway), BPS divestment (timing dependent on the transaction), and corporate infrastructure reduction (extending into 2025). He clarified that while employee count will drop 80-90%, the expense reduction is about removing entire categories of cost. Regarding in-school lending, Yowan stated Navient remains focused on its specific 'swim lane' of high-credit-quality, high-balance borrowers and will not chase volume in other segments, even as competitors exit.

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    Jeff Adelson's questions to Navient Corp (NAVI) leadership • Q2 2024

    Question

    Jeff Adelson requested more detail on the timeline for achieving expense reductions and asked if the 80-90% headcount reduction implies a similar drop in compensation expense. He also asked if a competitor's exit from the in-school lending market has altered Navient's strategy.

    Answer

    CEO David L. Yowan detailed three timelines for cost-cutting: outsourcing (well advanced), BPS divestment (depends on the transaction), and corporate overhead (longer tail into 2025). On in-school lending, he stated Navient will remain disciplined, focusing on its target 'swim lane' of high-credit quality borrowers rather than chasing volume in other segments, though it will seek to capture more share within its chosen niche.

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