NEW YORK (TheStreet) -- Shares of Navient Corp.(NAVI) - Get Report fell 8.83% to close at $19.51 today after the Department of Education said it will "wind down" contracts with one of the company's units and four other private collection agencies that were providing inaccurate information to borrowers.

The five companies are Pioneer Credit Recovery, a wholly owned subsidiary of Navient, Coast Professional, Enterprise Recovery Systems, National Recoveries and West Asset Management.

Delaware-based Navient split last year from SLM Corp. (SLM) - Get Report , commonly known as Sallie Mae, the largest U.S. education finance company.

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"Federal Student Aid borrowers are entitled to accurate information as they make critical choices to manage their debt," Under Secretary Ted Mitchell said in a statement on Friday.

"Every company that works for the department must keep consumers' best interests at the heart of their business practices by giving borrowers clear and accurate guidance. It is our responsibility - and our commitment - to uphold the highest standards of service for America's student borrowers and consumers," he added.

In its review, the department found that agents of the companies made "materially inaccurate representations to borrowers about the loan rehabilitation program, which is an option that can create benefits to defaulted borrowers after they have made nine on-time payments in a period of 10 months," the department said.

The department will reassign accounts held by these five agencies which are not already in repayment to other agencies.

Separately, TheStreet Ratings team rates NAVIENT CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NAVIENT CORP (NAVI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 36.17% and other important driving factors, this stock has surged by 46.54% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NAVI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, NAVIENT CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for NAVIENT CORP is currently very high, coming in at 73.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.98% is above that of the industry average.
  • NAVI, with its decline in revenue, slightly underperformed the industry average of 7.4%. Since the same quarter one year prior, revenues fell by 14.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: NAVI Ratings Report