[caption id="attachment_217490" align="aligncenter" width="1200"] Student loan servicer Navient has approved a $1 billion share buyback program to begin next year. | DBT PHOTO BY JACOB OWENS[/caption]
WILMINGTON – Navient, the publicly traded education loan servicing giant, announced Tuesday that its board of directors approved a new share repurchase program for up to $1 billion.The share repurchase authorization, which is effective immediately and has no expiration date, is in addition to the approximately $150 million of unused authorization, as of Sept. 30, approved by the board in October 2019. The company expects to complete the remainder of the 2019 authorization by the end of 2021 and anticipates using $400 million of the new authority in 2022, officials said.Stock buybacks are one way for companies to improve share value for shareholders by decreasing the available float to trade. Following the new buyback announcement, Navient's share price gained 1.06%.“This new share repurchase program demonstrates our confidence in our capital-generation expectations and our ongoing commitment to return excess capital to our shareholders,” said Jack Remondi, president and CEO of Navient, in a statement. “We remain focused on investing capital to support new loan originations and overall business growth. This includes maintaining appropriate capital that supports our credit ratings and enhances ongoing access to financing. Our capital return policy is consistent with these objectives.”Navient’s buyback announcement has helped the company recover from a sizable share price drop following its move to transfer all of its federal education loans to competitor Maximus. Prior to that move in September, Navient’s stock was trading at all-time highs around $23 a share, having rebounded sharply from under $6 a share in the early days of the pandemic.Navient offloaded 6 million U.S. Department of Education accounts in October that it had been servicing fore revenue, choosing to instead focus on non-governmental loan servicing and asset recovery.
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