SLM 10-Q Quarterly Report Sept. 30, 2025

SLM CORP

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slm-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13251

SLM Corp oration

(Exact name of registrant as specified in its charter)


Delaware			52-2013874
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

300 Continental Drive	Newark,	Delaware	19713
(Address of principal executive offices)			(Zip Code)

( 302 ) 451-0200

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.20 per share	SLM	The NASDAQ Global Select Market
Floating Rate Non-Cumulative Preferred Stock, Series B, par value $.20 per share	SLMBP	The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

(Do not check if a smaller reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of September 30, 2025, there were 203,038,649 shares of common stock outstanding.

SLM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

INDEX


PART I. Financial Information
Item 1.	Financial Statements	2
Item 1.	Notes to the Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	81
Item 4.	Controls and Procedures	84
PART II. Other Information
Item 1.	Legal Proceedings	85
Item 1A.	Risk Factors	85
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	85
Item 3.	Defaults Upon Senior Securities	85
Item 4.	Mine Safety Disclosures	85
Item 5.	Other Information	86
Item 6.	Exhibits	86


CONSOLIDATED BALANCE SHEETS (Unaudited)
	September 30,		December 31,
(Dollars in thousands, except share and per share amounts)	2025		2024
Assets
Cash and cash equivalents	$	3,539,341	$	4,700,366
Investments:
Trading investments at fair value (cost of $ 38,668 and $ 41,715 , respectively)	51,963		53,262
Available-for-sale investments at fair value (cost of $ 1,841,143 and $ 2,042,473 , respectively)	1,775,784		1,933,226
Other investments	117,211		112,377
Total investments	1,944,958		2,098,865
Loans held for investment (net of allowance for losses of $ 1,526,104 and $ 1,435,920 , respectively)	21,615,067		20,902,158

Restricted cash	193,143		173,894
Other interest-earning assets	838		4,880
Accrued interest receivable	1,690,102		1,546,590
Premises and equipment, net	119,286		119,354
Goodwill and acquired intangible assets, net	60,767		63,532
Income taxes receivable, net	405,082		425,625

Other assets	36,838		36,846
Total assets	$	29,605,422	$	30,072,110

Liabilities
Deposits	$	20,012,108	$	21,068,568

Long-term borrowings	6,838,995		6,440,345

Other liabilities	413,021		403,277
Total liabilities	27,264,124		27,912,190
Commitments and contingencies
Equity
Preferred stock, par value $ 0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $ 100 per share	251,070		251,070
Common stock, par value $ 0.20 per share, 1.125 billion shares authorized: 443.2 million and 440.6 million shares issued, respectively	88,637		88,121
Additional paid-in capital	1,231,189		1,193,753
Accumulated other comprehensive loss (net of tax benefit of ($ 15,124 ) and ($ 21,209 ), respectively)	( 45,167 )		( 65,861 )
Retained earnings	4,531,160		4,114,446
Total SLM Corporation stockholders’ equity before treasury stock	6,056,889		5,581,529
Less: Common stock held in treasury at cost: 240.1 million and 230.2 million shares, respectively	( 3,715,591 )		( 3,421,609 )
Total equity	2,341,298		2,159,920
Total liabilities and equity	$	29,605,422	$	30,072,110

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Interest income:
Loans	$	593,734	$	565,046	$	1,790,110	$	1,726,991
Investments	14,955		16,299		43,411		45,945
Cash and cash equivalents	48,898		71,294		136,915		184,737
Total interest income	657,587		652,639		1,970,436		1,957,673
Interest expense:
Deposits	203,577		225,749		609,194		657,480
Interest expense on short-term borrowings	717		3,467		7,731		10,339
Interest expense on long-term borrowings	80,316		64,020		228,744		171,263

Total interest expense	284,610		293,236		845,669		839,082
Net interest income	372,977		359,403		1,124,767		1,118,591
Less: provisions for credit losses	179,462		271,465		351,466		300,336
Net interest income after provisions for credit losses	193,515		87,938		773,301		818,255
Non-interest income:
Gains (losses) on sales of loans, net	135,958		( 31 )		323,680		254,937
Gains (losses) on securities, net	4,876		( 3,836 )		( 8,143 )		385

Other income	31,868		28,390		89,985		85,164
Total non-interest income	172,702		24,523		405,522		340,486
Non-interest expenses:
Operating expenses:
Compensation and benefits	83,667		87,566		259,397		269,303
FDIC assessment fees	6,511		12,973		28,696		38,012
Other operating expenses	89,380		70,259		211,399		181,122
Total operating expenses	179,558		170,798		499,492		488,437
Acquired intangible assets amortization expense	846		1,225		2,765		3,834

Total non-interest expenses	180,404		172,023		502,257		492,271
Income (loss) before income tax expense (benefit)	185,813		( 59,562 )		676,566		666,470
Income tax expense (benefit)	49,963		( 14,410 )		164,904		169,698
Net income (loss)	135,850		( 45,152 )		511,662		496,772
Preferred stock dividends	3,994		4,648		11,922		13,929
Net income (loss) attributable to SLM Corporation common stock	$	131,856	$	( 49,800 )	$	499,740	$	482,843
Basic earnings (loss) per common share	$	0.64	$	( 0.23 )	$	2.39	$	2.21
Average common shares outstanding	207,144		214,873		209,023		218,059
Diluted earnings (loss) per common share	$	0.63	$	( 0.23 )	$	2.35	$	2.18
Average common and common equivalent shares outstanding	210,607		214,873		212,922		221,553
Declared dividends per common share	$	0.13	$	0.11	$	0.39	$	0.33

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(Dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income (loss)	$	135,850	$	( 45,152 )	$	511,662	$	496,772
Other comprehensive income (loss):
Unrealized gains (losses) on investments	26,455		53,748		43,075		61,150
Unrealized gains (losses) on cash flow hedges	( 5,543 )		( 16,110 )		( 16,296 )		( 28,419 )
Total unrealized gains (losses)	20,912		37,638		26,779		32,731
Income tax (expense) benefit	( 5,246 )		( 9,168 )		( 6,085 )		( 7,966 )
Other comprehensive income (loss), net of tax (expense) benefit	15,666		28,470		20,694		24,765
Total comprehensive income (loss)	$	151,516	$	( 16,682 )	$	532,356	$	521,537

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
		Common Stock Shares
(In thousands, except share and per share amounts)	Preferred Stock Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Equity
Balance at June 30, 2024	2,510,696	440,279,647	( 222,818,287 )	217,461,360	$	251,070	$	88,056	$	1,173,735	$	( 78,809 )	$	4,107,980	$	( 3,258,794 )	$	2,283,238
Net loss	—	—	—	—	—		—		—		—		( 45,152 )		—		( 45,152 )
Other comprehensive income, net of tax	—	—	—	—	—		—		—		28,470		—		—		28,470
Total comprehensive loss	—	—	—	—	—		—		—		—		—		—		( 16,682 )
Cash dividends declared:
Common stock ($ 0.11 per share)	—	—	—	—	—		—		—		—		( 23,529 )		—		( 23,529 )
Preferred Stock, Series B ($ 1.85 per share)	—	—	—	—	—		—		—		—		( 4,648 )		—		( 4,648 )


Issuance of common shares	—	249,049	—	249,049	—		50		3,078		—		( 11 )		—		3,117
Stock-based compensation expense	—	—	—	—	—		—		8,374		—		—		—		8,374

Common stock repurchased	—	—	( 5,345,026 )	( 5,345,026 )	—		—		—		—		—		( 115,338 )		( 115,338 )
Shares repurchased related to employee stock-based compensation plans	—	—	( 34,916 )	( 34,916 )	—		—		—		—		—		( 782 )		( 782 )
Balance at September 30, 2024	2,510,696	440,528,696	( 228,198,229 )	212,330,467	$	251,070	$	88,106	$	1,185,187	$	( 50,339 )	$	4,034,640	$	( 3,374,914 )	$	2,133,750

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
		Common Stock Shares
(In thousands, except share and per share amounts)	Preferred Stock Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Equity
Balance at June 30, 2025	2,510,696	442,958,366	( 234,476,986 )	208,481,380	$	251,070	$	88,592	$	1,218,580	$	( 60,833 )	$	4,426,222	$	( 3,548,644 )	$	2,374,987
Net income	—	—	—	—	—		—		—		—		135,850		—		135,850
Other comprehensive loss, net of tax	—	—	—	—	—		—		—		15,666		—		—		15,666
Total comprehensive income	—	—	—	—	—		—		—		—		—		—		151,516
Cash dividends declared:
Common stock ($ 0.13 per share)	—	—	—	—	—		—		—		—		( 26,901 )		—		( 26,901 )
Preferred Stock, Series B ($ 1.59 per share)	—	—	—	—	—		—		—		—		( 3,994 )		—		( 3,994 )


Issuance of common shares	—	222,665	—	222,665	—		45		3,673		—		( 17 )		—		3,701
Stock-based compensation expense	—	—	—	—	—		—		8,936		—		—		—		8,936

Common stock repurchased	—	—	( 5,631,834 )	( 5,631,834 )	—		—		—		—		—		( 165,866 )		( 165,866 )
Shares repurchased related to employee stock-based compensation plans	—	—	( 33,562 )	( 33,562 )	—		—		—		—		—		( 1,081 )		( 1,081 )
Balance at September 30, 2025	2,510,696	443,181,031	( 240,142,382 )	203,038,649	$	251,070	$	88,637	$	1,231,189	$	( 45,167 )	$	4,531,160	$	( 3,715,591 )	$	2,341,298

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
		Common Stock Shares
(In thousands, except share and per share amounts)	Preferred Stock Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Equity
Balance at December 31, 2023	2,510,696	438,230,416	( 217,886,532 )	220,343,884	$	251,070	$	87,647	$	1,148,689	$	( 75,104 )	$	3,624,859	$	( 3,156,364 )	$	1,880,797
Net income	—	—	—	—	—		—		—		—		496,772		—		496,772
Other comprehensive income, net of tax	—	—	—	—	—		—		—		24,765		—		—		24,765
Total comprehensive income	—	—	—	—	—		—		—		—		—		—		521,537
Cash dividends declared:
Common stock ($ 0.33 per share)	—	—	—	—	—		—		—		—		( 71,834 )		—		( 71,834 )
Preferred Stock, Series B ($ 5.55 per share)	—	—	—	—	—		—		—		—		( 13,929 )		—		( 13,929 )


Issuance of common shares	—	2,298,280	—	2,298,280	—		459		4,757		—		( 1,228 )		—		3,988
Stock-based compensation expense	—	—	—	—	—		—		31,741		—		—		—		31,741

Common stock repurchased	—	—	( 9,585,395 )	( 9,585,395 )	—		—		—		—		—		( 203,996 )		( 203,996 )
Shares repurchased related to employee stock-based compensation plans	—	—	( 726,302 )	( 726,302 )	—		—		—		—		—		( 14,554 )		( 14,554 )
Balance at September 30, 2024	2,510,696	440,528,696	( 228,198,229 )	212,330,467	$	251,070	$	88,106	$	1,185,187	$	( 50,339 )	$	4,034,640	$	( 3,374,914 )	$	2,133,750

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
		Common Stock Shares
(In thousands, except share and per share amounts)	Preferred Stock Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Equity
Balance at December 31, 2024	2,510,696	440,604,795	( 230,222,501 )	210,382,294	$	251,070	$	88,121	$	1,193,753	$	( 65,861 )	$	4,114,446	$	( 3,421,609 )	$	2,159,920
Net income	—	—	—	—	—		—		—		—		511,662		—		511,662
Other comprehensive income, net of tax	—	—	—	—	—		—		—		20,694		—		—		20,694
Total comprehensive income	—	—	—	—	—		—		—		—		—		—		532,356
Cash dividends declared:
Common stock ($ 0.39 per share)	—	—	—	—	—		—		—		—		( 81,520 )		—		( 81,520 )
Preferred Stock, Series B ($ 4.75 per share)	—	—	—	—	—		—		—		—		( 11,922 )		—		( 11,922 )


Issuance of common shares	—	2,576,236		2,576,236	—		516		5,893		—		( 1,506 )		—		4,903
Stock-based compensation expense	—	—	—	—	—		—		31,543		—		—		—		31,543
Common stock repurchased	—	—	( 9,035,581 )	( 9,035,581 )	—		—		—		—		—		( 266,346 )		( 266,346 )
Shares repurchased related to employee stock-based compensation plans	—	—	( 884,300 )	( 884,300 )	—		—		—		—		—		( 27,636 )		( 27,636 )
Balance at September 30, 2025	2,510,696	443,181,031	( 240,142,382 )	203,038,649	$	251,070	$	88,637	$	1,231,189	$	( 45,167 )	$	4,531,160	$	( 3,715,591 )	$	2,341,298

See accompanying notes to consolidated financial statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Nine Months Ended September 30,
(Dollars in thousands)	2025		2024
Operating activities
Net income	$	511,662	$	496,772
Adjustments to reconcile net income to net cash used in operating activities:
Provisions for credit losses	351,466		300,336
Income tax expense	164,904		169,698
Amortization of brokered deposit placement fee	6,230		8,101
Amortization of Secured Borrowing Facility upfront fee	1,913		1,762
Amortization of deferred loan origination costs and loan premium/(discounts), net	11,161		9,203
Net amortization of discount on investments	( 497 )		( 1,480 )


Depreciation of premises and equipment	11,953		13,489
Acquired intangible assets amortization expense	2,765		3,834
Stock-based compensation expense	31,543		31,741
Unrealized (gains) losses on derivatives and hedging activities, net	( 4 )		62
Gains on sales of loans, net	( 323,680 )		( 254,937 )
Losses (gains) on securities, net	8,143		( 385 )

Other adjustments to net income, net	11,000		8,856
Changes in operating assets and liabilities:
Increase in accrued interest receivable	( 887,045 )		( 829,087 )
Decrease in trading investments	1,634		—
Increase in non-marketable securities	( 509 )		( 10,553 )
Decrease in other interest-earning assets	4,042		3,409

Increase in other assets	( 37,362 )		( 41,899 )
Decrease in income taxes payable, net	( 141,806 )		( 234,743 )
Decrease in accrued interest payable	( 31,360 )		( 6,121 )

Decrease in other liabilities	( 30,270 )		( 1,992 )
Total adjustments	( 845,779 )		( 830,706 )
Total net cash used in operating activities	( 334,117 )		( 333,934 )
Investing activities
Loans acquired and originated	( 6,430,903 )		( 6,071,409 )
Net proceeds from sales of loans held for investment and loans held for sale	4,168,714		3,761,691
Proceeds from FFELP Loan claim payments	—		27,579
Net decrease in loans held for investment and loans held for sale (other than loans acquired and originated, and loan sales)	2,132,718		2,021,627
Purchases of available-for-sale securities	( 70,262 )		( 76,963 )
Proceeds from sales and maturities of available-for-sale securities	407,881		744,798

Total net cash provided by investing activities	208,148		407,323
Financing activities

Brokered deposit placement fee	( 3,615 )		( 5,906 )
Net (decrease) increase in certificates of deposit	( 1,249,292 )		508,686
Net increase (decrease) in other deposits	188,886		( 727,932 )
Issuance costs for collateralized borrowings	( 42 )		—
Borrowings collateralized by loans in securitization trusts - issued	536,610		1,529,461
Borrowings collateralized by loans in securitization trusts - repaid	( 838,985 )		( 727,688 )
Issuance costs for unsecured debt offering	( 1,942 )		—
Unsecured debt issued	493,885		—
Unsecured debt repaid	( 500,000 )		—
Borrowings under Secured Borrowing Facility	700,000		—

Fees paid on Secured Borrowing Facility	( 2,951 )		( 2,333 )

Common stock dividends paid	( 81,520 )		( 71,834 )
Preferred stock dividends paid	( 11,922 )		( 13,929 )
Common stock repurchased	( 244,919 )		( 200,898 )
Total net cash (used in) provided by financing activities	( 1,015,807 )		287,627


Net (decrease) increase in cash, cash equivalents and restricted cash	( 1,141,776 )		361,016
Cash, cash equivalents and restricted cash at beginning of period	4,874,260		4,299,507
Cash, cash equivalents and restricted cash at end of period	$	3,732,484	$	4,660,523
Cash disbursements made for:
Interest	$	857,970	$	824,375
Income taxes paid	$	147,036	$	235,675
Income taxes refunded	$	( 5,561 )	$	( 1,251 )
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents	$	3,539,341	$	4,489,539
Restricted cash	193,143		170,984
Total cash, cash equivalents and restricted cash	$	3,732,484	$	4,660,523
Supplemental non-cash investment activities:
Accrued interest capitalized during the period	$	391,576	$	360,142
Trading investments received in consideration for loans sold	$	1,362	$	5,218
Available-for-sale investments received in consideration for loans sold	$	131,384	$	210,371

See accompanying notes to consolidated financial statements.

1. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, consolidated financial statements of SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” or “us”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete consolidated financial statements. The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions.

We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.

Allowance for Credit Losses

We maintain an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well as for future loan commitments, at the reporting date (“CECL”).

In determining the lifetime expected credit losses on our Private Education Loan (as hereinafter defined) portfolio loan segments, we use a discounted cash flow method. This method requires us to project future principal and interest cash flows on our loans in those portfolios.

To estimate the future expected cash flows, we use statistical loan-level models that consider life of loan expectations for defaults, prepayments, recoveries, and any other qualitative adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date. These cash flows are discounted at the loan’s effective interest rate to calculate the present value of those cash flows. Management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The difference between the present value of those cash flows and the amortized cost basis of the underlying loans is the allowance for credit losses. Entities that measure credit losses based on the present value of expected future cash flows are permitted to report the entire change in present value as credit loss expense but may alternatively report the change in present value due to the passage of time as interest income. We have elected to report the entire change in present value as credit loss expense.

We estimate future default rates used in our current expected credit losses at a loan level using historical loss experience, current borrower characteristics, current conditions, and economic factors forecasted over a reasonable and supportable period. At the end of the reasonable and supportable forecast period, we immediately revert our forecasted economic factors to long-term historical averages. We estimate future prepayment speeds used in our current expected credit losses at a loan level using historical prepayment experience, current borrower characteristics, current conditions, and economic factors forecasted over a reasonable and supportable period.

The reasonable and supportable forecast period is meant to represent the period in which we believe we can estimate the impact of forecasted economic factors in our expected losses. We use a two-year reasonable and supportable forecast period, although this period is subject to change as our view evolves on our ability to reasonably forecast economic conditions to estimate future losses.


1.			Significant Accounting Policies (Continued)

In estimating future default rates and prepayment speeds in our current expected credit losses, we use a combination of expected economic scenarios coupled with our historical experience and adjust for any qualitative factors (as described below). We also develop an adverse and favorable economic scenario. At each reporting date, we determine the appropriate weighting of these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes. This weighting of expectations is used in calculating our current expected credit losses recorded each period.

We obtain forecasts for our expected loss model from an external economic analyst who provides us with a range of economic forecasts and projected near-term growth scenarios with various likelihoods of occurrence. Management reviews and weighs the economic forecasts for each of these inputs to calculate our allowance for credit losses. Our forecasting process reflects management’s continuous review of forecasting assumptions and model inputs and is consistent with our internal governance, risk management framework and CECL methodologies. Management continues to review both the scenarios and their respective weightings each quarter in determining the allowance for credit losses. The most recent adjustment to scenario weightings occurred in the first quarter of 2025.

In estimating recoveries, we use both estimates of what we expect to receive from the sale of defaulted loans as well as historical borrower payment behavior to estimate the timing and amount of future recoveries on charged-off loans.

In addition to the above modeling approach, we also take certain other qualitative factors into consideration when calculating the allowance for credit losses, which could result in management overlays (increases or decreases to the allowance for credit losses). These management overlays can encompass a broad array of factors not captured by model inputs, including, but not limited to, changes in lending policies and procedures, including changes in underwriting standards, changes in servicing policies and collection administration practices, including changes we have implemented to our loan modification programs, state law changes that could impact servicing and collection practices, charge-offs, recoveries not already included in the analysis, the effect of other external factors such as legal and regulatory requirements on the level of estimated current expected credit losses, the performance of the model over time versus actual losses, and any other operational or regulatory changes that could affect our estimate of future losses.

The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. If actual future performance in delinquency, charge-offs, and recoveries is significantly different than estimated, or management assumptions or practices were to change, this could materially affect the estimate of the allowance for credit losses, the timing of when losses are recognized, and the related provision for credit losses in our consolidated statements of income.

When calculating our allowance for credit losses and liability for unfunded commitments, we incorporate several inputs that are subject to change period to period. These include, but are not limited to, CECL model inputs and any overlays deemed necessary by management. The most impactful CECL model inputs include:

• Economic forecasts;

• Weighting of economic forecasts; and

• Recovery rates.

Of the model inputs outlined above, economic forecasts, weighting of economic forecasts, and recovery rates are subject to estimation uncertainty, and changes in these inputs could have a material impact to our allowance for credit losses and the related provision for credit losses.

In the second quarter of 2024, we implemented a loan-level future default rate model that includes current portfolio characteristics and forecasts of real gross domestic product and college graduate unemployment. In the second quarter of 2024, we also implemented a future prepayment speeds model to include forecasts of real gross domestic product, retail sales, the Secured Overnight Financing Rate (“SOFR”), and the U.S. 10-year treasury rate. These models reduce the reliance on certain qualitative overlays compared to the previous default rate and prepayment speeds models. Prior to these changes, our default rate and prepayment speeds models used forecasts of college graduate unemployment, retail sales, home price index, and median family income. Both the future default rate model and the future prepayment speeds model are used in determining the adequacy of the allowance for credit losses.

See Note 2, “Significant Accounting Policies — Allowance for Loan Losses” in our 2024 Form 10-K for additional information.


1.			Significant Accounting Policies (Continued)

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires entities to disclose specific categories in the effective tax rate reconciliation and provide additional information for reconciling items where the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income/loss by the applicable statutory income tax rate. Additionally, entities are required to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024. Other than the inclusion of additional disclosures, we do not expect the amendment to have a material impact to our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statements of income. The guidance in this standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of the ASU on our consolidated financial statements.

2. Investments

Trading Investments

We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. At September 30, 2025 and December 31, 2024, we had $ 52 million and $ 53 million, respectively, classified as trading investments.

Available-for-Sale Investments

The amortized cost and fair value of securities available for sale are as follows:


As of September 30, 2025 (dollars in thousands)	Amortized Cost		Allowance for credit losses (1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	550,645	$	—	$	1,796	$	( 56,821 )	$	495,620
Utah Housing Corporation bonds	2,490		—		—		( 350 )		2,140
U.S. government-sponsored enterprises and Treasuries	648,861		—		—		( 14,283 )		634,578
Other securities	639,147		—		12,785		( 8,486 )		643,446
Total	$	1,841,143	$	—	$	14,581	$	( 79,940 )	$	1,775,784

As of December 31, 2024 (dollars in thousands)	Amortized Cost		Allowance for credit losses (1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	516,358	$	—	$	205	$	( 73,235 )	$	443,328
Utah Housing Corporation bonds	2,849		—		—		( 490 )		2,359
U.S. government-sponsored enterprises and Treasuries	948,009		—		—		( 32,265 )		915,744
Other securities	575,257		—		8,633		( 12,095 )		571,795
Total	$	2,042,473	$	—	$	8,838	$	( 118,085 )	$	1,933,226

(1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes unrealized losses related to non-credit factors.


2.			Investments (Continued)

The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:


(Dollars in thousands)	Less than 12 months				12 months or more				Total
	Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
As of September 30, 2025:
Mortgage-backed securities	$	( 54 )	$	24,443	$	( 56,767 )	$	296,952	$	( 56,821 )	$	321,395
Utah Housing Corporation bonds	—		—		( 350 )		2,140		( 350 )		2,140
U.S. government-sponsored enterprises and Treasuries	—		—		( 14,283 )		634,578		( 14,283 )		634,578
Other securities	( 92 )		21,628		( 8,394 )		128,021		( 8,486 )		149,649
Total	$	( 146 )	$	46,071	$	( 79,794 )	$	1,061,691	$	( 79,940 )	$	1,107,762

As of December 31, 2024:
Mortgage-backed securities	$	( 2,723 )	$	137,585	$	( 70,512 )	$	290,257	$	( 73,235 )	$	427,842
Utah Housing Corporation bonds	—		—		( 490 )		2,359		( 490 )		2,359
U.S. government-sponsored enterprises and Treasuries	—		—		( 32,265 )		915,744		( 32,265 )		915,744
Other securities	( 74 )		11,579		( 12,021 )		182,215		( 12,095 )		193,794
Total	$	( 2,797 )	$	149,164	$	( 115,288 )	$	1,390,575	$	( 118,085 )	$	1,539,739

At September 30, 2025 and December 31, 2024, 196 of 295 and 236 of 278 , respectively, of our available-for-sale securities were in an unrealized loss position.

Impairment

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of these criteria are met, the security’s amortized cost basis is written down to fair value through net income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security.

Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal Home Loan Banks, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. Our Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors Service or AA+ by Standard and Poor’s. We have the intent and ability to hold these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on this qualitative analysis, we have determined that no credit impairment exists.

We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to these investments and do not consider a credit impairment to exist.


2.			Investments (Continued)

As of September 30, 2025, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.


As of September 30, 2025 Year of Maturity (dollars in thousands)	Amortized Cost		Estimated Fair Value
2026	$	549,540	$	536,223
2027	99,322		98,356
2038	63		64
2039	521		516
2042	1,850		1,618
2043	3,542		3,214
2044	3,958		3,645
2045	4,268		3,840
2046	6,590		5,840
2047	6,078		5,425
2048	1,659		1,502
2049	13,829		12,379
2050	95,952		77,149
2051	136,536		108,674
2052	52,155		46,496
2053	295,220		296,378
2054	127,043		123,903
2055	233,104		234,952
2056	175,781		180,369
2058	34,132		35,241
Total	$	1,841,143	$	1,775,784

Some of the mortgage-backed securities and a portion of the government securities have been pledged to the Federal Reserve Bank (the “FRB”) as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $ 646 million and $ 610 million par value of securities pledged to this borrowing facility at September 30, 2025 and December 31, 2024, respectively, as discussed further in Note 7, “Borrowings” in this Form 10-Q.

Other Investments

Investments in Non-Marketable Securities

We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or similar securities of the same issuer, or when observable prices are not available, use market data of similar entities, in determining any changes in the value of the securities. In the third quarter of 2024, we funded a new investment in non-marketable securities of an issuer whose securities we had not previously purchased. In the first quarter of 2025, we recognized an impairment on certain of our other non-marketable equity securities, related to our former credit card platform, resulting in a loss of $ 10 million, which is net of a valuation adjustment on a trading investment with the same issuer. As of September 30, 2025 and December 31, 2024, our total investment in non-marketable securities was $ 12 million and $ 24 million, respectively.


2.			Investments (Continued)

Low Income Housing Tax Credit Investments

We invest in affordable housing projects that qualify for the low-income housing tax credit (“LIHTC”), which is designed to promote private development of low-income housing. These investments generate a return mostly through realization of federal tax credits and tax benefits from net operating losses on the underlying properties. Total carrying value of the LIHTC investments was $ 99 million at September 30, 2025 and $ 82 million at December 31, 2024. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $ 43 million at September 30, 2025 and $ 30 million at December 31, 2024.

Related to these investments, we recognized tax credits and other tax benefits through tax expense of $ 2 million at September 30, 2025 and $ 13 million at December 31, 2024. Tax credits and other tax benefits are recognized as part of our annual effective tax rate used to determine tax expense in a given quarter. Accordingly, the portion of a year’s expected tax benefits recognized in any given quarter may differ from 25 percent.

3. Loans Held for Investment

Loans held for investment consist solely of Private Education Loans as of September 30, 2025. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”). During the third quarter of 2024, we transferred our then-remaining FFELP Loan portfolio to loans held for sale and subsequently sold the FFELP Loan portfolio to an unaffiliated third party during the fourth quarter of 2024.

Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR. As of September 30, 2025 and December 31, 2024, 21 percent and 23 percent, respectively, of all our Private Education Loans were indexed to SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school.

FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, owners receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993 and before July 1, 2006, owners receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, owners receive 100 percent reimbursement on all qualifying claims.

The following table summarizes our Private Education Loan sales to unaffiliated third parties for the periods presented. We did not sell any Private Education Loans in the three months ended September 30, 2024.


	Three Months Ended September 30,		Nine Months Ended September 30,
(Dollars in millions)	2025			2025		2024
Loan principal	$	1,769		$	3,609	$	3,418
Capitalized interest	167			330		274
Total Private Education Loans sold	$	1,936		$	3,939	$	3,692

Gain on sale of loans, net	$	136		$	324	$	255

There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of those VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Note 7, “Borrowings - Unconsolidated Funding Vehicles” in this Form 10-Q.


3.			Loans Held for Investment (Continued)

Loans held for investment are summarized as follows:


	September 30,		December 31,
(Dollars in thousands)	2025		2024
Loans Held for Investment, net:
Fixed-rate	$	18,112,352	$	17,093,382
Variable-rate	4,917,647		5,141,626
Total Private Education Loans, gross	23,029,999		22,235,008
Deferred origination costs and unamortized premium/(discount)	111,172		103,070
Allowance for credit losses	( 1,526,104 )		( 1,435,920 )
Loans held for investment, net	$	21,615,067	$	20,902,158

The estimated weighted average life of education loans in our portfolio was approximately 5.6 years at both September 30, 2025 and December 31, 2024.

The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:


	2025				2024
Three Months Ended September 30, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	22,263,445	10.58	%	$	20,497,173	10.79	%


Total portfolio	$	22,263,445			$	20,497,173


	2025				2024
Nine Months Ended September 30, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	22,578,272	10.60	%	$	20,805,777	10.90	%


Total portfolio	$	22,578,272			$	20,805,777

See Note 5, “Loans Held for Investment — Certain Collection Tools — Private Education Loans” in our 2024 Form 10-K for additional information.

4. Allowance for Credit Losses and Unfunded Loan Commitments

Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb lifetime expected credit losses in the held for investment loan portfolio. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for credit losses is appropriate to cover lifetime expected losses to be incurred in the loan portfolio.

When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. The allowance is recorded in “Other Liabilities” on the consolidated balance sheet. When the loan is funded, we transfer that liability to the allowance for loan losses.

The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the borrower makes a $ 25 monthly payment that is smaller than the interest accrued on the loan in that month. The allowance for credit losses considers the collectability of both principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses. See “— Accrued Interest Receivable” in this Note 4 for further discussion.

See Note 2, “Significant Accounting Policies — Allowance for Credit Losses” in our 2024 Form 10-K for a more detailed discussion on our allowance for credit losses accounting policies.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Allowance for Credit Losses Metrics

The following tables provide a summary of the activity in the allowance for loan losses and the allowance for unfunded loan commitments during the three and nine months ended September 30, 2025 and 2024.


Three Months Ended September 30, 2025 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,469,509
Transfer from allowance for unfunded loan commitments	109,422
Provisions:
Provision for current period	143,498
Loan sale reduction to provision	( 118,794 )

Total provisions (1)	24,704
Net charge-offs:
Charge-offs	( 91,072 )
Recoveries	13,541
Net charge-offs	( 77,531 )


Allowance for loan losses, ending balance	$	1,526,104
Allowance for unfunded loan commitments, beginning balance (2)	52,541
Provision (1)(3)	154,758
Transfer to allowance for loan losses	( 109,422 )
Allowance for unfunded loan commitments, ending balance (2)	97,877
Total allowance for credit losses, ending balance	$	1,623,981








Net charge-offs as a percentage of average loans in repayment (annualized) (4)	1.95		%
Allowance for loan losses coverage of net charge-offs (annualized)	4.92
Total Allowance Percentage of Private Education Loan Exposure (5)	5.93		%


Ending total loans, gross	$	23,029,999
Average loans in repayment (4)	$	15,870,798
Ending loans in repayment (4)	$	16,292,470
Unfunded loan commitments	$	2,673,369
Total accrued interest receivable	$	1,693,268

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “—Unfunded Loan Commitments” in this Note 4 for further discussion.

(3) Includes incremental provision for new commitments and changes to provision for existing commitments.

(4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

(5) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


Three Months Ended September 30, 2024 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for loan losses, beginning balance	$	4,060		$	1,265,592		$	1,269,652
Transfer from allowance for unfunded loan commitments	—			115,421			115,421
Provisions:
Provision for current period	4,368			109,196			113,564


Total provisions (1)	4,368			109,196			113,564
Net charge-offs:
Charge-offs	( 131 )			( 87,737 )			( 87,868 )
Recoveries	—			11,149			11,149
Net charge-offs	( 131 )			( 76,588 )			( 76,719 )
Write-downs arising from transfer of loans to held for sale (2)	( 8,297 )			—			( 8,297 )
Allowance for loan losses, ending balance	$	—		$	1,413,621		$	1,413,621
Allowance for unfunded loan commitments, beginning balance (3)	—			49,479			49,479
Provision (1)(4)	—			157,901			157,901
Transfer to allowance for loan losses	—			( 115,421 )			( 115,421 )
Allowance for unfunded loan commitments, ending balance (3)	—			91,959			91,959
Total allowance for credit losses, ending balance	$	—		$	1,505,580		$	1,505,580








Net charge-offs as a percentage of average loans in repayment (annualized) (5)	—		%	2.08		%
Allowance for loan losses coverage of net charge-offs (annualized)	—			4.61
Total Allowance Percentage of Private Education Loan Exposure (6)	—		%	5.84		%

Ending total loans, gross	$	—		$	21,777,466
Average loans in repayment (5)	$	—		$	14,708,205
Ending loans in repayment (5)	$	—		$	15,360,255
Unfunded loan commitments	$	—		$	2,476,785
Total accrued interest receivable	$	—		$	1,529,814

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(2) Represents fair value adjustments on loans transferred to held for sale.

(3) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “—Unfunded Loan Commitments” in this Note 4 for further discussion.

(4) Includes incremental provision for new commitments and changes to provision for existing commitments.

(5) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

(6) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


Nine Months Ended September 30, 2025 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,435,920
Transfer from allowance for unfunded loan commitments	242,434
Provisions:
Provision for current period	330,976
Loan sale reduction to provision	( 235,253 )

Total provisions (1)	95,723
Net charge-offs:
Charge-offs	( 284,841 )
Recoveries	36,868
Net charge-offs	( 247,973 )


Allowance for loan losses, ending balance	$	1,526,104
Allowance for unfunded loan commitments, beginning balance (2)	84,568
Provision (1)(3)	255,743
Transfer to allowance for loan losses	( 242,434 )
Allowance for unfunded loan commitments, ending balance (2)	97,877
Total allowance for credit losses, ending balance	$	1,623,981








Net charge-offs as a percentage of average loans in repayment (annualized) (4)	2.06		%
Allowance for loan losses coverage of net charge-offs (annualized)	4.62
Total Allowance Percentage of Private Education Loan Exposure (5)	5.93		%


Ending total loans, gross	$	23,029,999
Average loans in repayment (4)	$	16,027,567
Ending loans in repayment (4)	$	16,292,470
Unfunded loan commitments	$	2,673,369
Total accrued interest receivable	$	1,693,268

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(3) Includes incremental provision for new commitments and changes to provision for existing commitments.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


Nine Months Ended September 30, 2024 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for loan losses, beginning balance	$	4,667		$	1,335,105		$	1,339,772
Transfer from allowance for unfunded loan commitments	—			276,750			276,750
Provisions:
Provision for current period	4,010			276,534			280,544
Loan sale reduction to provision	—			( 235,955 )			( 235,955 )

Total provisions (1)	4,010			40,579			44,589
Net charge-offs:
Charge-offs	( 380 )			( 272,653 )			( 273,033 )
Recoveries	—			33,840			33,840
Net charge-offs	( 380 )			( 238,813 )			( 239,193 )
Write-downs arising from transfer of loans to held for sale (2)	( 8,297 )			—			( 8,297 )
Allowance for loan losses, ending balance	$	—		$	1,413,621		$	1,413,621
Allowance for unfunded loan commitments, beginning balance (3)	—			112,962			112,962
Provision (1)(4)	—			255,747			255,747
Transfer to allowance for loan losses	—			( 276,750 )			( 276,750 )
Allowance for unfunded loan commitments, ending balance (3)	—			91,959			91,959
Total allowance for credit losses, ending balance	$	—		$	1,505,580		$	1,505,580








Net charge-offs as a percentage of average loans in repayment (annualized) (5)	—		%	2.13		%
Allowance for loan losses coverage of net charge-offs (annualized)	—			4.44
Total Allowance Percentage of Private Education Loan Exposure (6)	—		%	5.84		%

Ending total loans, gross	$	—		$	21,777,466
Average loans in repayment (5)	$	—		$	14,944,421
Ending loans in repayment (5)	$	—		$	15,360,255
Unfunded loan commitments	$	—		$	2,476,785
Total accrued interest receivable	$	—		$	1,529,814

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(2) Represents fair value adjustments on loans transferred to held for sale.

(4) Includes incremental provision for new commitments and changes to provision for existing commitments.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Provisions for Credit Losses

Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	24,704	$	109,196	$	95,723	$	40,579
Provisions for unfunded loan commitments	154,758		157,901		255,743		255,747
Total Private Education Loan provisions for credit losses	179,462		267,097		351,466		296,326

Total FFELP Loans provisions for credit losses	—		4,368		—		4,010
Provisions for credit losses reported in consolidated statements of income	$	179,462	$	271,465	$	351,466	$	300,336

Provision for credit losses for the nine months ended September 30, 2025 increased by $ 51 million, compared with the year-ago period. During the nine months ended September 30, 2025, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in economic outlook, offset by $ 235 million in negative provisions recorded as a result of the $ 3.94 billion Private Education Loan sales during the first nine months of 2025. In the year-ago period, the provision for credit losses was primarily affected by $ 236 million in negative provisions recorded as a result of the $ 3.69 billion Private Education Loan sales during the first nine months of 2024, an improved economic outlook, and changes in management overlays and recovery rates, offset by new loan commitments, net of expired commitments, and increases to the provision as a result of decreases in our estimates of the historical long-term average prepayment speeds used after the two-year reasonable and supportable period.

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made as of the date of a modification.

The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur.

As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of the metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable (which we refer to as the “Total Allowance Percentage of Private Education Loan Exposure”); and delinquency and forbearance percentages.

Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming. With respect to periods prior to the sale of our remaining FFELP Loan portfolio in the fourth quarter of 2024, FFELP Loans were at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we did not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continued to accrue interest on those loans through the date of claim.

For additional information, see Note 1, “Significant Accounting Policies — Allowance for Credit Losses” in this Form 10-Q and Note 6, “Allowance for Credit Losses and Unfunded Loan Commitments” in our 2024 Form 10-K.

Forbearance

Under our current forbearance practices, temporary forbearance of payments is generally granted in one -to- two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). During the first six months following a borrower’s grace period, the borrower may be eligible for extended grace forbearance in one six-month increment (which would also count towards the 12-month forbearance cap). Due to our current forbearance practices, including the limitations on forbearances offered to borrowers,


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

we do not believe the granting of forbearances will exceed the significance threshold under our accounting policy and, therefore, we do not consider the forbearances as loan modifications for the purposes of the tables below.

For additional information on our forbearance and modification programs, see Note 5, “Loans Held for Investment —Certain Collection Tools — Private Education Loans” in our 2024 Form 10-K. The tables below provide information about modifications to borrowers experiencing financial difficulty.

We offer certain administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are required by law (such as by the Servicemembers Civil Relief Act), are considered separate from our active loss mitigation programs, or do not exceed the significance threshold and therefore are not considered to be loan modifications requiring disclosure. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. We do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The following tables show the amortized cost basis at the end of the respective reporting periods of the loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended September 30, 2025 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	6,866	0.03	%	$	142,208	0.57	%
Total	$	6,866	0.03	%	$	142,208	0.57	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended September 30, 2024 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	21,159	0.09	%	$	449,484	1.92	%
Total	$	21,159	0.09	%	$	449,484	1.92	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Nine Months Ended September 30, 2025 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	18,272	0.07	%	$	379,091	1.53	%
Total	$	18,272	0.07	%	$	379,091	1.53	%


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Nine Months Ended September 30, 2024 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	28,633	0.12	%	$	937,723	4.01	%
Total	$	28,633	0.12	%	$	937,723	4.01	%

The following tables summarize the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:

Three Months Ended September 30,

2025

2024

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Financial Effect:

Reduced average contractual rate from 12.44 % to 4.46 %

Added a weighted average 9.33 years to the life of loans

Reduced average contractual rate from 12.41 % to 4.23 %

Reduced average contractual rate from 13.16 % to 3.59 %

Added a weighted average 9.42 years to the life of loans

Reduced average contractual rate from 12.58 % to 3.51 %

Nine Months Ended September 30,

2025

2024

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Financial Effect:

Reduced average contractual rate from 12.77 % to 4.39 %

Added a weighted average 9.39 years to the life of loans

Reduced average contractual rate from 12.32 % to 4.08 %

Reduced average contractual rate from 13.18 % to 3.59 %

Added a weighted average 9.21 years to the life of loans

Reduced average contractual rate from 12.69 % to 3.60 %

Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses” and “Significant Accounting Policies — Allowance for Credit Losses — Allowance for FFELP Loan Losses” in our 2024 Form 10-K for a more detailed discussion.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

As part of the additional modification programs that were launched in the fourth quarter of 2023, we also offered for a short period of time a permanent term extension with no interest rate reduction program. This program ended in the fourth quarter of 2023. The amortized cost of this program totaled $ 5.8 million as of September 30, 2025, representing 0.02 percent of the total Private Education Loan portfolio. This program added a weighted average of 7.0 years to the life of loans participating in the program. As of September 30, 2025, both the defaulted amount and amortized cost basis of loans that participated in this program that defaulted during the three and nine months ended September 30, 2025 and were modified for borrowers experiencing financial difficulty during the twelve months prior to default were immaterial. Additionally, there were no loans modified during the twelve months ended September 30, 2025 and subsequently charged-off during the three and nine months ended September 30, 2025.

For the periods presented, the following table presents the defaulted amount and period-end amortized cost basis, by modification category, of loans that defaulted during the period and were modified for borrowers experiencing financial difficulty during the 12 months preceding default. Solely for the purpose of the below table, starting in the quarter ended December 31, 2024, we changed our definition of payment default to be two missed consecutive post-modification payment obligations. As such, as reflected for the three and nine months ended September 30, 2025 below, defaulted amount represents the principal amount of modified loans at the time the borrower missed two consecutive post-modification payment obligations during the period. Previously, as reflected for the three and nine months ended September 30, 2024 in the tables below, defaulted amount represented the principal amount of modified loans at the time they became 60 days or more past due in the relevant period. Loans that were modified during the twelve months ended September 30, 2025 and subsequently charged-off during the three and nine months ended September 30, 2025 are not included in the period-end amortized cost basis and had an amortized cost basis of $ 12.1 million and $ 31.1 million at the time of charge-off, respectively. The following tables do not include loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023, which are described earlier in this Note 4.



	Three Months Ended September 30,
	2025				2024
(Dollars in thousands)	Defaulted Amount		Period-end Amortized Cost Basis		Defaulted Amount		Period-end Amortized Cost Basis
Loan Type:
Private Education Loans
Interest Rate Reduction	$	2,839	$	2,702	$	4,635	$	4,541
Combination - Interest Rate Reduction and Term Extension	44,355		40,766		83,087		82,428
Total	$	47,194	$	43,468	$	87,722	$	86,969



	Nine Months Ended September 30,
	2025				2024
(Dollars in thousands)	Defaulted Amount		Period-end Amortized Cost Basis		Defaulted Amount		Period-end Amortized Cost Basis
Loan Type:
Private Education Loans
Interest Rate Reduction	$	5,664	$	4,615	$	5,657	$	5,904
Combination - Interest Rate Reduction and Term Extension	104,031		82,439		115,375		117,223
Total	$	109,695	$	87,054	$	121,032	$	123,127


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that were modified within the nine months prior to September 30, 2025, the 12 months prior to September 30, 2025, and the 12 months prior to December 31, 2024, respectively.


	Nine Months Ended September 30, 2025				Twelve Months Ended September 30, 2025				Twelve Months Ended December 31, 2024
(Dollars in thousands)	Balance		%		Balance		%		Balance		%
Payment Status (Amortized Cost Basis at September 30, 2025) (1) :
Loan modifications in deferment (2)	$	11,871			$	16,723			$	33,645
Loan modifications in repayment:
Loans current (3)(4)	245,827		64	%	321,832		68	%	826,007		83	%
Loans delinquent 30-59 days (3)(4)	68,363		18	%	74,084		15	%	77,446		8	%
Loans delinquent 60-89 days (3)(4)	37,704		10	%	41,731		9	%	43,484		4	%
Loans 90 days or greater past due (3)(4)	33,598		8	%	38,025		8	%	54,473		5	%
Total loan modifications in repayment	385,492		100	%	475,672		100	%	1,001,410		100	%
Total Private Education Loan modifications	$	397,363			$	492,395			$	1,035,055

(1) Loans that were modified during the twelve months ended September 30, 2025 and subsequently charged-off during the nine months ended September 30, 2025 are excluded from the table and had an amortized cost basis of $ 31.1 million. Loans that were both modified and subsequently charged-off during the twelve months ended September 30, 2025 are excluded from the table and had an amortized cost basis of $ 34.4 million. Loans that were both modified and subsequently charged-off during the twelve months ended December 31, 2024 are excluded from the table and had an amortized cost basis of $ 40.4 million. Additionally, loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023 are excluded from the table, but are discussed elsewhere in this note 4.

(2) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted.

(3) Represents loans in repayment, which include loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

(4) The period of delinquency is based on the number of days scheduled payments are contractually past due.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Private Education Loans Held for Investment - Key Credit Quality Indicators

For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination approval/first disbursement, stratified by key credit quality indicators.


As of September 30, 2025 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2025 (1)		2024 (1)		2023 (1)		2022 (1)		2021 (1)		2020 and Prior (1)		Total (1)		% of Balance
Cosigners:
With cosigner	$	4,001,023	$	5,382,558	$	2,711,357	$	2,069,418	$	1,433,282	$	4,870,814	$	20,468,452	89	%
Without cosigner	308,405		518,511		408,719		350,007		260,573		715,332		2,561,547		11
Total	$	4,309,428	$	5,901,069	$	3,120,076	$	2,419,425	$	1,693,855	$	5,586,146	$	23,029,999	100	%

FICO at Origination Approval (2) :
Less than 670	$	264,423	$	344,011	$	242,250	$	205,864	$	132,056	$	488,605	$	1,677,209	7	%
670-699	526,201		708,826		447,327		345,558		236,629		931,168		3,195,709		14
700-749	1,249,988		1,784,529		966,814		759,111		542,008		1,888,189		7,190,639		31
Greater than or equal to 750	2,268,816		3,063,703		1,463,685		1,108,892		783,162		2,278,184		10,966,442		48
Total	$	4,309,428	$	5,901,069	$	3,120,076	$	2,419,425	$	1,693,855	$	5,586,146	$	23,029,999	100	%


FICO Refreshed (2)(3) :
Less than 670	$	379,852	$	586,745	$	487,553	$	418,343	$	302,527	$	1,006,868	$	3,181,888	14	%
670-699	545,190		736,125		400,707		293,152		190,845		596,397		2,762,416		12
700-749	1,228,178		1,663,421		832,914		629,965		429,317		1,399,953		6,183,748		27
Greater than or equal to 750	2,156,208		2,914,778		1,398,902		1,077,965		771,166		2,582,928		10,901,947		47
Total	$	4,309,428	$	5,901,069	$	3,120,076	$	2,419,425	$	1,693,855	$	5,586,146	$	23,029,999	100	%

Seasoning (4) :
1-12 payments	$	2,482,324	$	2,429,263	$	428,769	$	303,105	$	180,906	$	308,627	$	6,132,994	27	%
13-24 payments	—		1,116,198		1,155,528		217,601		140,598		333,972		2,963,897		13
25-36 payments	—		—		610,015		941,554		139,939		406,873		2,098,381		9
37-48 payments	—		—		—		437,010		682,053		471,829		1,590,892		7
More than 48 payments	—		—		—		—		278,374		3,559,693		3,838,067		17
Not yet in repayment	1,827,104		2,355,608		925,764		520,155		271,985		505,152		6,405,768		27
Total	$	4,309,428	$	5,901,069	$	3,120,076	$	2,419,425	$	1,693,855	$	5,586,146	$	23,029,999	100	%

2025 Current period (5) gross charge-offs	$	( 658 )	$	( 12,418 )	$	( 50,812 )	$	( 49,340 )	$	( 36,173 )	$	( 135,440 )	$	( 284,841 )
2025 Current period (5) recoveries	56		891		4,594		5,289		4,312		21,726		36,868
2025 Current period (5) net charge-offs	$	( 602 )	$	( 11,527 )	$	( 46,218 )	$	( 44,051 )	$	( 31,861 )	$	( 113,714 )	$	( 247,973 )

Total accrued interest by origination approval vintage	$	101,589	$	485,987	$	379,773	$	280,428	$	168,882	$	276,609	$	1,693,268
(1) Balance represents gross Private Education Loans held for investment. (2) Represents the higher credit score of the cosigner or the borrower. (3) Represents the FICO score updated as of the third-quarter 2025. (4) Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5) Current period refers to period from January 1, 2025 through September 30, 2025.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


As of December 31, 2024 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2024 (1)		2023 (1)		2022 (1)		2021 (1)		2020 (1)		2019 and Prior (1)		Total (1)		% of Balance
Cosigners:
With cosigner	$	4,519,952	$	4,707,685	$	2,741,871	$	1,759,261	$	1,151,751	$	4,642,019	$	19,522,539	88	%
Without cosigner	504,640		613,825		443,376		310,175		222,245		618,208		2,712,469		12
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

FICO at Origination Approval (2) :
Less than 670	$	293,025	$	394,962	$	261,589	$	155,661	$	94,355	$	475,186	$	1,674,778	8	%
670-699	615,617		753,548		449,214		285,181		197,205		898,535		3,199,300		14
700-749	1,525,547		1,641,641		998,834		660,373		451,695		1,782,121		7,060,211		32
Greater than or equal to 750	2,590,403		2,531,359		1,475,610		968,221		630,741		2,104,385		10,300,719		46
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%


FICO Refreshed (2)(3) :
Less than 670	$	453,705	$	666,049	$	467,562	$	301,367	$	194,124	$	831,053	$	2,913,860	13	%
670-699	633,749		710,546		409,808		248,325		138,730		578,639		2,719,797		12
700-749	1,485,771		1,512,643		879,450		563,941		362,715		1,398,737		6,203,257		28
Greater than or equal to 750	2,451,367		2,432,272		1,428,427		955,803		678,427		2,451,798		10,398,094		47
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

Seasoning (4) :
1-12 payments	$	2,860,113	$	774,471	$	499,812	$	280,154	$	159,762	$	324,506	$	4,898,818	22	%
13-24 payments	—		2,729,334		372,496		191,989		122,938		340,556		3,757,313		17
25-36 payments	—		—		1,564,157		254,068		110,952		429,127		2,358,304		11
37-48 payments	—		—		—		987,977		170,051		451,494		1,609,522		7
More than 48 payments	—		—		—		—		625,916		3,262,308		3,888,224		17
Not yet in repayment	2,164,479		1,817,705		748,782		355,248		184,377		452,236		5,722,827		26
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

2024 Current period (5) gross charge-offs	$	( 1,826 )	$	( 29,094 )	$	( 68,454 )	$	( 53,697 )	$	( 37,318 )	$	( 186,451 )	$	( 376,840 )
2024 Current period (5) recoveries	117		2,191		6,487		5,771		3,840		26,350		44,756
2024 Current period (5) net charge-offs	$	( 1,709 )	$	( 26,903 )	$	( 61,967 )	$	( 47,926 )	$	( 33,478 )	$	( 160,101 )	$	( 332,084 )

Total accrued interest by origination approval vintage	$	195,291	$	484,531	$	325,962	$	197,504	$	106,565	$	239,562	$	1,549,415

(1) Balance represents gross Private Education Loans held for investment.

(2) Represents the higher credit score of the cosigner or the borrower.

(3) Represents the FICO score updated as of the fourth-quarter 2024.

(4) Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due.

(5) Current period refers to January 1, 2024 through December 31, 2024.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Delinquencies - Private Education Loans Held for Investment

The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval/first disbursement. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following tables, do not include loans in the “loans in forbearance” metric).


	Private Education Loans Held for Investment - Delinquencies by Origination Approval Vintage
As of September 30, 2025 (dollars in thousands)	2025			2024			2023			2022			2021			2020 and Prior			Total

Loans in-school/grace/deferment (1)	$	1,827,104		$	2,355,608		$	925,764		$	520,155		$	271,985		$	505,152		$	6,405,768
Loans in forbearance (2)	4,779			60,512			72,671			52,554			37,450			103,795			331,761
Loans in repayment:
Loans current	2,472,114			3,439,618			2,024,028			1,749,605			1,307,139			4,646,400			15,638,904
Loans delinquent 30-59 days (3)	3,649			27,307			48,789			46,391			37,939			171,237			335,312
Loans delinquent 60-89 days (3)	1,319			11,444			26,315			28,145			22,256			83,656			173,135
Loans 90 days or greater past due (3)	463			6,580			22,509			22,575			17,086			75,906			145,119
Total Private Education Loans in repayment	2,477,545			3,484,949			2,121,641			1,846,716			1,384,420			4,977,199			16,292,470
Total Private Education Loans, gross	4,309,428			5,901,069			3,120,076			2,419,425			1,693,855			5,586,146			23,029,999
Private Education Loans deferred origination costs and unamortized premium/(discount)	37,660			35,602			15,123			7,812			4,749			10,226			111,172
Total Private Education Loans	4,347,088			5,936,671			3,135,199			2,427,237			1,698,604			5,596,372			23,141,171
Private Education Loans allowance for losses	( 217,892 )			( 325,227 )			( 242,031 )			( 199,827 )			( 134,510 )			( 406,617 )			( 1,526,104 )
Private Education Loans, net	$	4,129,196		$	5,611,444		$	2,893,168		$	2,227,410		$	1,564,094		$	5,189,755		$	21,615,067

Percentage of Private Education Loans in repayment	57.5		%	59.1		%	68.0		%	76.3		%	81.7		%	89.1		%	70.7		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.2		%	1.3		%	4.6		%	5.3		%	5.6		%	6.6		%	4.0		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.2		%	1.7		%	3.3		%	2.8		%	2.6		%	2.0		%	2.0		%

(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).

(2) Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors (other than delinquent loans in disaster forbearance), consistent with established loan program servicing policies and procedures.

(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2024 (dollars in thousands)	2024			2023			2022			2021			2020			2019 and Prior			Total

Loans in-school/grace/deferment (1)	$	2,164,479		$	1,817,705		$	748,782		$	355,248		$	184,377		$	452,236		$	5,722,827
Loans in forbearance (2)	19,984			124,728			87,961			52,686			31,575			88,496			405,430
Loans in repayment:
Loans current	2,820,940			3,312,916			2,259,455			1,590,812			1,107,189			4,422,021			15,513,333
Loans delinquent 30-59 days (3)	13,533			36,441			45,543			35,245			27,302			152,684			310,748
Loans delinquent 60-89 days (3)	3,973			15,239			23,359			18,365			10,921			68,878			140,735
Loans 90 days or greater past due (3)	1,683			14,481			20,147			17,080			12,632			75,912			141,935
Total Private Education Loans in repayment	2,840,129			3,379,077			2,348,504			1,661,502			1,158,044			4,719,495			16,106,751
Total Private Education Loans, gross	5,024,592			5,321,510			3,185,247			2,069,436			1,373,996			5,260,227			22,235,008
Private Education Loans deferred origination costs and unamortized premium/(discount)	47,659			25,599			10,788			6,142			4,057			8,825			103,070
Total Private Education Loans	5,072,251			5,347,109			3,196,035			2,075,578			1,378,053			5,269,052			22,338,078
Private Education Loans allowance for losses	( 258,235 )			( 326,207 )			( 234,532 )			( 150,324 )			( 90,600 )			( 376,022 )			( 1,435,920 )
Private Education Loans, net	$	4,814,016		$	5,020,902		$	2,961,503		$	1,925,254		$	1,287,453		$	4,893,030		$	20,902,158

Percentage of Private Education Loans in repayment	56.5		%	63.5		%	73.7		%	80.3		%	84.3		%	89.7		%	72.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.7		%	2.0		%	3.8		%	4.3		%	4.4		%	6.3		%	3.7		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.7		%	3.6		%	3.6		%	3.1		%	2.7		%	1.8		%	2.5		%

(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $ 25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school. The allowance for credit losses considers the collectibility of both principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses.


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest (1)

September 30, 2025	$	1,693,268	$	6,378	$	13,187
December 31, 2024	$	1,549,415	$	6,420	$	12,366

(1) At September 30, 2025 and December 31, 2024, $ 155 million and $ 164 million, respectively, of accrued interest receivable was not expected to be capitalized and $ 1.5 billion and $ 1.4 billion of accrued interest receivable was expected to be capitalized.


4.			Allowance for Credit Losses and Unfunded Loan Commitments (Continued)

Unfunded Loan Commitments

At September 30, 2025, we had $ 2.7 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2025/2026 academic year. The table below summarizes the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance.


	2025				2024
Three Months Ended September 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	52,541	$	1,358,163	$	49,479	$	1,300,393
Provision/New commitments - net (1)	154,758		4,251,598		157,901		3,934,921
Transfer - funded loans (2)	( 109,422 )		( 2,936,392 )		( 115,421 )		( 2,758,529 )
Ending Balance	$	97,877	$	2,673,369	$	91,959	$	2,476,785


	2025				2024
Nine Months Ended September 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	84,568	$	2,311,660	$	112,962	$	2,221,077
Provision/New commitments - net (1)	255,743		6,755,182		255,747		6,287,149
Transfer - funded loans (2)	( 242,434 )		( 6,393,473 )		( 276,750 )		( 6,031,441 )
Ending Balance	$	97,877	$	2,673,369	$	91,959	$	2,476,785

(1) Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to provision for existing commitments.

(2) When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses.

The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments. We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments. The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to period based upon the loan characteristics of the underlying commitments.

5. Goodwill and Acquired Intangible Assets

Goodwill

We recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of the acquisition of the assets primarily used or held for use of Epic Research Education Services, LLC, which did business as Nitro College (“Nitro”), in the first quarter of 2022, and the acquisition of the key assets of Scholly Inc. (“Scholly”) in the third quarter of 2023. Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. At both September 30, 2025 and December 31, 2024, we had $ 56 million in total goodwill. See Note 2, “Significant Accounting Policies — Business Combinations” in our 2024 Form 10-K for additional details on our acquisitions of Nitro and Scholly.

Acquired Intangible Assets

Our intangible assets include acquired trade name and trademarks, customer relationships, and developed technology. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Acquired intangible assets include the following:


		September 30, 2025						December 31, 2024
(Dollars in thousands)	Weighted Average Useful Life (in years) (1)	Cost Basis		Accumulated Amortization		Net		Cost Basis		Accumulated Amortization		Net
Trade name and trademarks	4.0	$	6,040	$	( 3,272 )	$	2,768	$	6,040	$	( 2,139 )	$	3,901
Customer relationships	4.6	8,920		( 7,750 )		1,170		8,920		( 6,465 )		2,455
Developed technology	3.5	2,590		( 1,980 )		610		2,590		( 1,661 )		929
Sallie.com domain	4.0	150		( 34 )		116		150		( 6 )		144
Total acquired intangible assets		$	17,700	$	( 13,036 )	$	4,664	$	17,700	$	( 10,271 )	$	7,429

(1) The weighted average useful life of acquired intangible assets related to the Nitro acquisition is 4.6 years and the weighted average useful life of the acquired intangible assets related to the Scholly acquisition is 4.0 years.

We recorded amortization of acquired intangible assets totaling approximately $ 1 million and $ 3 million in the three and nine months ended September 30, 2025, respectively, and approximately $ 1 million and $ 4 million in the three and nine months ended September 30, 2024, respectively. We will continue to amortize our intangible assets with definite useful lives over their remaining estimated useful lives. We estimate amortization expense associated with these intangible assets will be approximately $ 4 million, $ 3 million, and $ 1 million in 2025, 2026, and 2027, respectively.

6. Deposits

The following table summarizes total deposits at September 30, 2025 and December 31, 2024.


	September 30,		December 31,
(Dollars in thousands)	2025		2024
Deposits - interest-bearing	$	20,012,108	$	21,066,752
Deposits - non-interest-bearing	—		1,816
Total deposits	$	20,012,108	$	21,068,568

Our total deposits of $ 20.0 billion were comprised of $ 7.7 billion in brokered deposits and $ 12.3 billion in retail and other deposits at September 30, 2025, compared to total deposits of $ 21.1 billion, which were comprised of $ 9.5 billion in brokered deposits and $ 11.6 billion in retail and other deposits, at December 31, 2024.

Interest-bearing deposits as of September 30, 2025 and December 31, 2024 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposits (“MMDAs”), and retail and brokered certificates of deposit (“CDs”). Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $ 7.2 billion and $ 7.0 billion of our deposit total as of September 30, 2025 and December 31, 2024, respectively. The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to Federal Deposit Insurance Corporation (“FDIC”) rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.

Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $ 2 million and $ 3 million in the three months ended September 30, 2025 and 2024, respectively, and placement fee expense of $ 6 million and $ 8 million in the nine months ended September 30, 2025 and 2024, respectively. There were $ 4 million in fees paid to third-party brokers related to brokered CDs for both the three and nine months ended September 30, 2025. Fees paid to third-party brokers related to brokered CDs were $ 6 million for both the three and nine months ended September 30, 2024.

Interest bearing deposits at September 30, 2025 and December 31, 2024 are summarized as follows:


	September 30, 2025				December 31, 2024
(Dollars in thousands)	Amount		Qtr.-End Weighted Average Stated Rate (1)		Amount		Year-End Weighted Average Stated Rate (1)

Money market	$	9,642,613	4.07	%	$	9,582,290	4.27	%
Savings	1,075,591		3.83		944,034		4.02
Certificates of deposit	9,293,904		4.01		10,540,428		4.20
Deposits - interest bearing	$	20,012,108			$	21,066,752

(1) Includes the effect of interest rate swaps in effective hedge relationships.


6.			Deposits (Continued)

Certificates of deposit remaining maturities are summarized as follows:


(Dollars in thousands)	September 30, 2025		December 31, 2024
One year or less	$	5,637,056	$	6,569,872
After one year to two years	1,663,887		2,074,849
After two years to three years	818,556		986,262
After three years to four years	654,425		189,421
After four years to five years	519,977		720,005
After five years	3		19
Total	$	9,293,904	$	10,540,428

As of September 30, 2025 and December 31, 2024, there were $ 590 million and $ 567 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $ 53 million and $ 92 million at September 30, 2025 and December 31, 2024, respectively.

7. Borrowings

Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securities (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Note 10, “Borrowings” in our 2024 Form 10-K. The following table summarizes our borrowings at September 30, 2025 and December 31, 2024.


	September 30, 2025						December 31, 2024
(Dollars in thousands)	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
Unsecured borrowings:
Unsecured debt (fixed-rate)	$	—	$	990,956	$	990,956	$	—	$	995,420	$	995,420
Total unsecured borrowings	—		990,956		990,956		—		995,420		995,420
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate	—		4,404,267		4,404,267		—		4,617,743		4,617,743
Variable-rate	—		743,772		743,772		—		827,182		827,182
Total Private Education Loan term securitizations	—		5,148,039		5,148,039		—		5,444,925		5,444,925
Secured Borrowing Facility	—		700,000		700,000		—		—		—
Total secured borrowings	—		5,848,039		5,848,039		—		5,444,925		5,444,925
Total	$	—	$	6,838,995	$	6,838,995	$	—	$	6,440,345	$	6,440,345

Long-term Borrowings

Unsecured Financing Transactions

On January 31, 2025, we issued $ 500 million of 6.50 percent unsecured Senior Notes due January 31, 2030. At September 30, 2025, the outstanding balance was $ 493 million.

On February 18, 2025, we redeemed $ 500 million of the 4.20 percent unsecured Senior Notes due October 29, 2025. The Senior Notes were redeemed at 100 percent of their principal amount, plus the accrued and unpaid interest thereon through the redemption date. As a result of the redemption, we recognized a $ 1 million loss on the transaction.


7.			Borrowings (Continued)

Secured Financing Transactions

The following table summarizes our term ABS fundings issued in the year ended December 31, 2024 and in the nine months ended September 30, 2025, in which we retained 100 percent of the residual class certificates and which are collateralized by pools of Private Education Loans. The transfer of these loans did not qualify for sale treatment and thus remain encumbered on our consolidated balance sheet.


SMB Private Education Loan Trust	Date Closed	Loans Transferred to the Trust (1)		Notes Issued		Gross Proceeds		Weighted Average Cost of Funds (2)	Weighted Average Life of Notes (in years)
(Dollars in thousands)
2024-C ABS Transaction	May 15, 2024	$	733,644	$	668,000	$	667,888	SOFR plus 1.19 %	5.36
2024-E ABS Transaction	August 14, 2024	944,645		868,000		867,743		SOFR plus 1.42 %	5.17
2024-F ABS Transaction	November 6, 2024	732,445		680,000		679,981		SOFR plus 1.08 %	5.09
Total 2024		$	2,410,734	$	2,216,000	$	2,215,612

Loans encumbered at September 30, 2025, related to 2024 term ABS:		$	2,158,665

2025-A ABS Transaction	May 7, 2025	$	576,908	$	539,000	$	538,889	SOFR plus 1.49 %	5.46
Total 2025		$	576,908	$	539,000	$	538,889

Loans encumbered at September 30, 2025, related to 2025 term ABS:		$	561,734

(1) Represents principal and capitalized interest.

(2) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.

Secured Borrowing Facility

On June 13, 2025, we amended our Secured Borrowing Facility to increase the amount to be borrowed under the facility from $ 2 billion to $ 2.5 billion and extended the maturity. We hold 100 percent of the residual interest in the Secured Borrowing Facility Trust. The amendment extended the revolving period, during which we may borrow, repay, and reborrow funds, until June 12, 2026. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on June 12, 2027 (or earlier, if certain material adverse events occur). The one-year revolving period plus the one-year amortization period results in a contractual maturity that is two years from the date of inception or renewal. At September 30, 2025, $ 700 million was outstanding under the Secured Borrowing Facility. At December 31, 2024, there were no outstanding short-term borrowings under the Secured Borrowing Facility.

Consolidated Funding Vehicles

We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.


As of September 30, 2025 (dollars in thousands)	Debt Outstanding						Carrying Amount of Net Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted Cash		Other Assets, Net (1)		Total
Secured borrowings:
Private Education Loan term securitizations	$	—	$	5,148,039	$	5,148,039	$	6,483,030	$	163,186	$	450,322	$	7,096,538
Secured Borrowing Facility	—		700,000		700,000		834,497		29,955		82,637		947,089
Total	$	—	$	5,848,039	$	5,848,039	$	7,317,527	$	193,141	$	532,959	$	8,043,627


7.			Borrowings (Continued)


As of December 31, 2024 (dollars in thousands)	Debt Outstanding						Carrying Amount of Net Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted Cash		Other Assets, Net (1)		Total
Secured borrowings:
Private Education Loan term securitizations	$	—	$	5,444,925	$	5,444,925	$	6,786,390	$	173,892	$	418,705	$	7,378,987
Secured Borrowing Facility	—		—		—		—		—		98		98
Total	$	—	$	5,444,925	$	5,444,925	$	6,786,390	$	173,892	$	418,803	$	7,379,085

(1) Other assets, net primarily represents accrued interest receivable and payable.

Unconsolidated Funding Vehicles

Private Education Loan Securitizations

Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own five percent of the securities issued by the trusts, as a vertical interest, to meet risk retention requirements. We were not required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an insignificant amount of the VIE’s expected residual returns. We classified those vertical risk retention interests related to securitization transactions as available-for-sale investments, except for the interest in the residual class, which we classified as trading investments recorded at fair value with changes recorded through earnings. The following summarizes our Private Education Loan ABS transactions closed in the nine months ended September 30, 2025 where the respective VIEs were not consolidated.


SMB Private Education Loan Trust	Date Closed	Loans Transferred to the Trust by Third-Party Seller		Date Third-Party Seller Previously Purchased Loans from the Bank	Additional Loans the Bank Transferred to the Trust (1)		Gain on Sale for Additional Loans Transferred by Bank
(Dollars in thousands)
2025-B ABS transaction (2)	July 17, 2025	$	496,749	February 6, 2025	$	26,223	$	2,315
2025-C ABS transaction (2)	August 21, 2025	$	1,807,961	July 30, 2025	$	95,101	$	5,353

(1) The transfer of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the transaction.

(2) Sallie Mae Bank sponsored the transaction and is the servicer and administrator.

The table below provides a summary of our exposure related to our unconsolidated VIEs.


	September 30, 2025						December 31, 2024
(Dollars in thousands)	Debt Interests (1)		Equity Interests (2)		Total Exposure		Debt Interests (1)		Equity Interests (2)		Total Exposure
Private Education Loan term securitizations	$	643,446	$	51,963	$	695,409	$	571,795	$	53,262	$	625,057

(1) Vertical risk retention interest classified as available-for-sale investment.

(2) Vertical risk retention interest classified as trading investment.


7.			Borrowings (Continued)

Other Borrowing Sources

We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $ 125 million at September 30, 2025. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing, and is payable daily. We did not utilize these lines of credit in the nine months ended September 30, 2025, nor in the year ended December 31, 2024.

We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At September 30, 2025 and December 31, 2024, the value of our pledged collateral at the FRB totaled $ 2.0 billion and $ 2.2 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the nine months ended September 30, 2025, nor in the year ended December 31, 2024.

8. Derivative Financial Instruments

Risk Management Strategy

We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this strategy as a prudent management of interest rate risk. Please refer to Note 11, “Derivative Financial Instruments” in our 2024 Form 10-K for a full discussion of our risk management strategy.

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the Chicago Mercantile Exchange (“CME”) and the London Clearing House (“LCH”). All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of September 30, 2025, $ 563 million notional of our derivative contracts were cleared on the CME and $ 21 million were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 96.4 percent and 3.6 percent, respectively, of our total notional derivative contracts of $ 584 million at September 30, 2025.

For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of September 30, 2025 was $( 6.1 ) million and $( 0.1 ) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).

Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero. At September 30, 2025 and December 31, 2024, we had a net positive exposure (derivative gain/loss positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $ 0.8 million and $ 5 million, respectively.


8.			Derivative Financial Instruments (Continued)

Summary of Derivative Financial Statement Impact

The following tables summarize the fair values and notional amounts of all derivative instruments at September 30, 2025 and December 31, 2024, and their impact on earnings and other comprehensive income for the nine months ended September 30, 2025 and September 30, 2024. Please refer to Note 11, “Derivative Financial Instruments” in our 2024 Form 10-K for a full discussion of fair value hedges and cash flow hedges.


Impact of Derivatives on the Consolidated Balance Sheets
		Cash Flow Hedges				Fair Value Hedges				Total
		September 30,		December 31,		September 30,		December 31,			September 30,		December 31,
(Dollars in thousands)		2025		2024		2025		2024			2025		2024
Fair Values (1)	Hedged Risk Exposure

Derivative Assets: (2)
Interest rate swaps	Interest rate	$	—	$	—	$	3	$	—		$	3	$	—

Derivative Liabilities: (2)
Interest rate swaps	Interest rate	( 33 )		( 19 )		—		( 21 )			( 33 )		( 40 )
Total net derivatives		$	( 33 )	$	( 19 )	$	3	$	( 21 )		$	( 30 )	$	( 40 )

(1) Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position.

(2) The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:


	Other Assets				Other Liabilities
	September 30,		December 31,		September 30,		December 31,
(Dollars in thousands)	2025		2024		2025		2024
Gross position (1)	$	3	$	—	$	( 33 )	$	( 40 )
Impact of master netting agreement	( 3 )		—		3		—
Derivative values with impact of master netting agreements (as carried on balance sheet)	—		—		( 30 )		( 40 )
Cash collateral pledged (2)	838		4,879		—		—
Net position	$	838	$	4,879	$	( 30 )	$	( 40 )

(1) Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract.

(2) Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.


Notional Values
	Cash Flow				Fair Value				Total
(Dollars in thousands)	September 30,		December 31,		September 30,		December 31,			September 30,		December 31,
	2025		2024		2025		2024			2025		2024
Interest rate swaps	$	577,649	$	639,097	$	6,520	$	281,520		$	584,169	$	920,617

Net total notional	$	577,649	$	639,097	$	6,520	$	281,520		$	584,169	$	920,617


8.			Derivative Financial Instruments (Continued)

As of September 30, 2025 and December 31, 2024, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:


(Dollars in thousands)	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
Line Item in the Balance Sheet in Which the Hedged Item is Included:	September 30,		December 31,		September 30,		December 31,
	2025		2024		2025		2024

Deposits	$	( 6,240 )	$	( 279,908 )	$	88	$	1,420


Impact of Derivatives on the Consolidated Statements of Income
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024

Fair Value Hedges
Interest rate swaps:
Interest recognized on derivatives	$	( 135 )	$	( 3,275 )	$	( 1,735 )	$	( 12,379 )
Hedged items recorded in interest expense	( 19 )		( 3,648 )		( 1,332 )		( 9,321 )
Derivatives recorded in interest expense	20		3,669		1,347		9,378
Total	$	( 134 )	$	( 3,254 )	$	( 1,720 )	$	( 12,322 )

Cash Flow Hedges
Interest rate swaps:
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	5,806	$	9,719	$	17,569	$	34,475
Total	$	5,806	$	9,719	$	17,569	$	34,475





Total	$	5,672	$	6,465	$	15,849	$	22,153


8.			Derivative Financial Instruments (Continued)


Impact of Derivatives on the Statements of Changes in Stockholders’ Equity
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2025		2024		2025		2024

Amount of gain (loss) recognized in other comprehensive income (loss)	$	263	$	( 6,391 )	$	1,273	$	6,056
Less: amount of gain (loss) reclassified in interest expense	5,806		9,719		17,569		34,475
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit	$	( 5,543 )	$	( 16,110 )	$	( 16,296 )	$	( 28,419 )

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate deposits. During the next twelve months, we estimate $ 6 million will be reclassified as a decrease to interest expense.

Cash Collateral

As of September 30, 2025, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was no cash collateral held by us related to derivative exposure between us and our derivatives counterparties at September 30, 2025 and December 31, 2024, respectively. Collateral held is recorded in “Other Liabilities” on the consolidated balance sheets. Cash collateral pledged by us related to derivative exposure between us and our derivatives counterparties was $ 0.8 million and $ 5 million at September 30, 2025 and December 31, 2024, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.

9. Stockholders’ Equity

The following table summarizes our common share repurchases and issuances.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Shares and per share amounts in actuals)	2025		2024		2025		2024
Common stock repurchased under repurchase programs (1)	5,631,834		5,345,026		9,035,581		9,585,395
Average purchase price per share (2)	$	29.45	$	21.58	$	29.48	$	21.28
Shares repurchased related to employee stock-based compensation plans (3)	33,562		34,916		884,300		726,302
Average purchase price per share	$	32.21	$	22.41	$	31.25	$	20.04
Common shares issued (4)	222,665		249,049		2,576,236		2,298,280

(1) Common shares purchased under our share repurchase programs. There was $ 138 million of capacity remaining under the 2024 Share Repurchase Program at September 30, 2025.

(2) Average purchase price per share includes purchase commission costs and excise taxes.

(3) Comprised of shares withheld from stock option exercises and the vesting of restricted stock, restricted stock units, performance stock units, and dividend equivalent units for employees’ tax withholding obligations and shares tendered by employees to satisfy option exercise costs.

(4) Common shares issued under our various compensation and benefit plans.

The closing price of our common stock on the NASDAQ Global Select Market on September 30, 2025 was $ 27.68 .

Common Stock Dividend

In September 2025 and September 2024, we paid a common stock dividend of $ 0.13 and $ 0.11 per common share, respectively.

Share Repurchases

In January 2022, we announced a share repurchase program of up to $ 1.25 billion of common stock that expired in January 2024. In January 2024, we announced a new share repurchase program of up to $ 650 million of common stock (the “2024 Share Repurchase Program”). The program expires in February 2026. We had $ 138 million of capacity remaining under the 2024 Share Repurchase Program at September 30, 2025.

Under the 2024 Share Repurchase Program, repurchases could occur from time to time and through a variety of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions. The timing and volume of any repurchases are subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the 2024 Share Repurchase Program.

Share Repurchases under Rule 10b5-1 trading plans

During the three months ended September 30, 2025 and 2024, we repurchased 5.6 million and 5.3 million shares, respectively, of our common stock at a total cost of $ 166 million and $ 115 million, respectively, and during the nine months ended September 30, 2025 and 2024, we repurchased 9.0 million and 9.6 million shares, respectively, of our common stock at a total cost of $ 266 million and $ 204 million, respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs.

10. Earnings (Loss) per Common Share

Basic earnings (loss) per common share (“EPS”) are calculated using the weighted average number of shares of common stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2025		2024		2025		2024
Numerator:
Net income (loss)	$	135,850	$	( 45,152 )	$	511,662	$	496,772
Preferred stock dividends	3,994		4,648		11,922		13,929
Net income (loss) attributable to SLM Corporation common stock	$	131,856	$	( 49,800 )	$	499,740	$	482,843
Denominator:
Weighted average shares used to compute basic EPS	207,144		214,873		209,023		218,059
Effect of dilutive securities:
Dilutive effect of stock options, restricted stock, restricted stock units, performance stock units, and Employee Stock Purchase Plan (“ESPP”) (1)(2)	3,463		—		3,899		3,494

Weighted average shares used to compute diluted EPS	210,607		214,873		212,922		221,553

Basic earnings (loss) per common share	$	0.64	$	( 0.23 )	$	2.39	$	2.21

Diluted earnings (loss) per common share	$	0.63	$	( 0.23 )	$	2.35	$	2.18

(1) Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method.

(2) For the three months ended September 30, 2025 and 2024, securities covering less than 1 million shares and approximately 6 million shares, respectively, and for both the nine months ended September 30, 2025 and 2024, securities covering less than 1 million shares were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

11. Fair Value Measurements

We use estimates of fair value in applying various accounting standards for our consolidated financial statements.

We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for determining fair value and the hierarchical framework, see Note 2, “Significant Accounting Policies - Fair Value Measurement” in our 2024 Form 10-K.

During the nine months ended September 30, 2025, there were no significant transfers of financial instruments between levels or changes in our methodology or assumptions used to value our financial instruments.

The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis.


	Fair Value Measurements on a Recurring Basis
	September 30, 2025								December 31, 2024
(Dollars in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Trading investments	$	—	$	—	$	51,963	$	51,963	$	—	$	—	$	53,262	$	53,262
Available-for-sale investments	—		1,773,720		2,064		1,775,784		—		1,930,537		2,689		1,933,226

Derivative instruments	—		3		—		3		—		—		—		—
Total	$	—	$	1,773,723	$	54,027	$	1,827,750	$	—	$	1,930,537	$	55,951	$	1,986,488

Liabilities:
Derivative instruments	$	—	$	( 33 )	$	—	$	( 33 )	$	—	$	( 40 )	$	—	$	( 40 )
Total	$	—	$	( 33 )	$	—	$	( 33 )	$	—	$	( 40 )	$	—	$	( 40 )


11.			Fair Value Measurements (Continued)

The following table summarizes the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.


	Nine Months Ended September 30,
	2025						2024
	Investments						Investments
(Dollars in thousands)	Available For Sale - Debt Securities		Trading - Residual Interests		Total		Available For Sale - Debt Securities		Trading - Residual Interests		Total
Balance, beginning of period	$	2,689	$	53,262	$	55,951	$	—	$	54,481	$	54,481
Total gains/(losses):
Included in earnings (or changes in net assets) (1)	16		1,748		1,764		14		398		412
Included in other comprehensive income	( 3 )		—		( 3 )		83		—		83
Settlements	( 638 )		( 3,047 )		( 3,685 )		2,813		( 39 )		2,774
Transfers into level 3	—		—		—		—		—		—
Transfers out of level 3	—		—		—		—		—		—
Balance, end of period	$	2,064	$	51,963	$	54,027	$	2,910	$	54,840	$	57,750

Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period	$	( 3 )	$	—	$	( 3 )	$	83	$	—	$	83
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period (2)	$	—	$	1,748	$	1,748	$	—	$	398	$	398

(1) Included in earnings (or changes in net assets) is comprised of the amounts recorded in the specified line item in the consolidated statements of income:


	Nine Months Ended September 30,
(Dollars in thousands)	2025		2024
Interest Income - Investments	$	16	$	14
Gains (losses) on securities, net	1,748		398
Total	$	1,764	$	412

(2) Recorded in "gains (losses) on securities, net" in the consolidated statements of income.

The following table presents the significant unobservable inputs used in the recurring valuations of the level 3 financial instruments detailed above.

As of September 30, 2025
(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Average)

Debt Securities

2,064

Discounted cash flow

Constant Prepayment Rate

6.9 %- 11.0 % ( 8.3 %)

Probability of default

4.4 %- 15.9 % ( 11.4 %)

Residual Interests

51,963

Discounted cash flow

Constant Prepayment Rate

6.9 %- 11.0 % ( 8.3 %)

Probability of default

4.4 %- 15.9 % ( 11.4 %)

Total

54,027


11.			Fair Value Measurements (Continued)

The significant inputs detailed in the above table would be expected to have the following impacts to the valuations:

• A decrease in constant prepayment rate (“CPR”) would result in a longer weighted average life of the trust, resulting in a decrease to the valuation due to the delay in residual cash flows with the increased term. The opposite is true for an increase in the CPR.

• A decrease in the probability of defaults means increased principal receipts, resulting in an increase to the valuation due to the increase in residual cash flow.

• Conversely, an increase in the probability of defaults means decreased principal receipts, resulting in a decrease to the valuation due to the decrease in residual cash flow.

The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.


	September 30, 2025						December 31, 2024
(Dollars in thousands)	Fair Value		Carrying Value		Difference		Fair Value		Carrying Value		Difference
Earning assets:
Loans held for investment, net:
Private Education Loans	$	24,759,169	$	21,615,067	$	3,144,102	$	24,110,381	$	20,902,158	$	3,208,223



Cash and cash equivalents	3,539,341		3,539,341		—		4,700,366		4,700,366		—
Trading investments	51,963		51,963		—		53,262		53,262		—
Available-for-sale investments	1,775,784		1,775,784		—		1,933,226		1,933,226		—
Accrued interest receivable	1,805,634		1,690,102		115,532		1,663,474		1,546,590		116,884

Derivative instruments	3		3		—		—		—		—
Total earning assets	$	31,931,894	$	28,672,260	$	3,259,634	$	32,460,709	$	29,135,602	$	3,325,107
Interest-bearing liabilities:
Money-market and savings accounts	$	10,725,860	$	10,718,204	$	( 7,656 )	$	10,503,731	$	10,526,324	$	22,593
Certificates of deposit	9,342,026		9,293,904		( 48,122 )		10,593,666		10,540,428		( 53,238 )

Long-term borrowings	6,828,914		6,838,995		10,081		6,323,384		6,440,345		116,961
Accrued interest payable	77,128		77,128		—		108,488		108,488		—
Derivative instruments	33		33		—		40		40		—
Total interest-bearing liabilities	$	26,973,961	$	26,928,264	$	( 45,697 )	$	27,529,309	$	27,615,625	$	86,316

Excess of net asset fair value over carrying value					$	3,213,937					$	3,411,423

Please refer to Note 15, “Fair Value Measurements” in our 2024 Form 10-K for a full discussion of the methods and assumptions used to estimate the fair value of each class of financial instruments.

12. Regulatory Capital

Sallie Mae Bank (the “Bank”) is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.

The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.

To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.

In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel Ill regulatory capital requirements. The proposed changes to the regulatory capital requirements generally would amend or introduce approaches and methodologies that would apply to banking organizations with total consolidated assets of $100 billion or more or to banking organizations with significant trading activity. The proposed rule therefore would not affect the Bank's capital requirements or the calculation of its capital ratios. It is uncertain if and when a final rule will be adopted, and if so, whether and to what extent it will differ from the proposed rule.

Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years , and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. On each of January 1, 2022, 2023, 2024, and 2025, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes. As of January 1, 2025, all adjusted transition amounts have been phased in for regulatory capital purposes. The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $ 1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $ 116 million, and increased our deferred tax asset by $ 306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $ 953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.

See Note 16, “Regulatory Capital” in our 2024 Form 10-K for additional information regarding the adjusted transition amounts.

The Bank’s required and actual regulatory capital amounts and ratios, including applicable capital conservation buffers, under U.S. Basel III are shown in the following table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale investments and swap valuations from Common Equity Tier 1 Capital.


12.			Regulatory Capital (Continued)


(Dollars in thousands)	Actual				U.S. Basel III Minimum Requirements Plus Buffer (1)(2)
	Amount		Ratio		Amount			Ratio
As of September 30, 2025 (3) :
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	3,063,308	11.3	%	$	1,902,074	>	7.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	3,063,308	11.3	%	$	2,309,661	>	8.5	%
Total Capital (to Risk-Weighted Assets)	$	3,418,923	12.6	%	$	2,853,110	>	10.5	%
Tier 1 Capital (to Average Assets)	$	3,063,308	10.4	%	$	1,177,879	>	4.0	%

As of December 31, 2024 (3) :
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	2,957,067	11.3	%	$	1,827,318	>	7.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	2,957,067	11.3	%	$	2,218,886	>	8.5	%
Total Capital (to Risk-Weighted Assets)	$	3,294,663	12.6	%	$	2,740,976	>	10.5	%
Tier 1 Capital (to Average Assets)	$	2,957,067	9.7	%	$	1,213,505	>	4.0	%

(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.

(2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework.

(3) For both September 30, 2025 and December 31, 2024, the actual amounts and the actual ratios include the fully phased in adjusted transition amounts discussed above.

Bank Dividends

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as necessary. The Bank declared $ 100 million and $ 294 million in dividends to the Company for the three and nine months ended September 30, 2025, respectively, and $ 116 million and $ 414 million in dividends to the Company for the three and nine months ended September 30, 2024, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. In the future, we expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under its share repurchase programs.

13. Commitments, Contingencies and Guarantees

Commitments

When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period that we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At September 30, 2025, we had $ 2.7 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2025/2026 academic year. At September 30, 2025, we had a $ 98 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on the unfunded commitments. See Note 2, “Significant Accounting Policies - Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2024 Form 10-K and Note 4, “Allowance for Credit Losses and Unfunded Loan Commitments” in this Form 10-Q for additional information.

Contingencies

In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries.

It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.

We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves.

14. Segment Reporting

The Company is managed as a single line of business with a single reportable segment originating and servicing high-quality Private Education Loans and providing other education-related services to customers. Our consolidated financial results are regularly reviewed by the Company’s Chief Executive Officer (the “CEO”) to allocate resources and evaluate financial performance.

The CEO evaluates the performance of the Company and decides how to allocate resources based on net income and total consolidated assets. The CEO uses net income to assess financial performance and to decide whether to re-invest profits into the Company or to return capital to stockholders in the form of dividends or the repurchase of common stock. Net income is also used to compare budget versus actual results, and the budget versus actual analysis is part of the segment financial performance review.

The following table illustrates the significant expense categories and amounts regularly provided to the CEO.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Non-interest expenses:
Compensation and benefits	$	83,667	$	87,566	$	259,397	$	269,303
Professional fees	58,429		46,515		120,557		105,263
Technology expenses	19,910		13,571		56,938		42,984
FDIC assessment fees	6,511		12,973		28,696		38,012
Other operating expenses	11,041		10,173		33,904		32,875
Total operating expenses	179,558		170,798		499,492		488,437
Acquired intangible assets impairment and amortization expense	846		1,225		2,765		3,834
Total non-interest expenses	$	180,404	$	172,023	$	502,257	$	492,271

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Through this discussion and analysis, we intend to provide the reader with some narrative context for how our management views our consolidated financial statements, additional context within which to assess our operating results, and information on the quality and variability of our earnings, liquidity, and cash flows.

The following information should be read in connection with SLM Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 (filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2025) (the “2024 Form 10-K”), and subsequent reports filed with the SEC. Definitions for capitalized terms used in this report not defined herein can be found in the 2024 Form 10-K.

References in this Form 10-Q to “we,” “us,” “our,” “Sallie Mae,” “SLM,” and the “Company” refer to SLM Corporation and its subsidiaries, except as otherwise indicated or unless the context otherwise requires.

This report contains “forward-looking statements” and information based on management’s current expectations as of the date of this report. 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. These include, but are not limited to: strategies; goals and assumptions of the Company; the Company’s expectation and ability to execute loan sales and share repurchases; the Company’s expectation and ability to pay a quarterly cash dividend on our common stock in the future, subject to the approval of our Board of Directors; the Company’s 2025 guidance; the Company’s three-year horizon outlook; the impact of acquisitions the Company has made or may make in the future; the Company’s projections regarding originations, net charge-offs, non-interest expenses, earnings, balance sheet position, and other metrics; any estimates related to accounting standard changes; and any estimates related to the impact of credit administration practices changes, including the results of simulations or other behavioral observations.

Forward-looking statements are subject to risks, uncertainties, assumptions, and other factors, many of which are difficult to predict and generally beyond the control of the Company, which may cause actual results to be materially different from those reflected in such forward-looking statements. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These factors include, among others, the risks and uncertainties set forth in Item 1A. “Risk Factors” and elsewhere in the Company’s most recently filed Annual Report on Form 10-K and subsequent filings with the SEC; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; failure to comply with consumer protection, banking, and other laws or regulations; changes in laws, regulations, and supervisory expectations, especially in light of the goals of the Trump administration; our ability to timely develop new products and services and the acceptance of those products and services by potential and existing customers; changes in accounting standards and the impact of related changes in significant accounting estimates, including any regarding the measurement of our allowance for credit losses and the related provision expense; 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; the effectiveness of our risk management framework and quantitative models; and changes in the terms of education loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws). We could also be affected by, among other things: changes in our funding costs and availability; reductions to our credit ratings; cybersecurity incidents, cyberattacks, and other failures or breaches of our operating systems or infrastructure, including those of third-party vendors; the societal, demographic, business, and legislative/regulatory impacts of pandemics, other public health crises, sever weather events, and/or natural disasters; damage to our reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting programs and the adverse effects of such initiatives on our business; changes in the demand for educational financing or in financing preferences of lenders, educational institutions, students, and their families, including changes as a result of new limits on, or reductions in, funding that certain educational institutions receive from the Federal government; changes in law and regulations with respect to the student lending business and financial institutions generally; changes in banking rules and regulations, including increased capital requirements; increased competition from banks and other consumer lenders; the creditworthiness of our customers, or any change related thereto; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of our earning assets versus our funding arrangements; rates of prepayments on the loans owned by us; changes in general economic conditions, including as a result of the impact of tariffs or trade wars or other current initiatives of the Federal government, that may impact the demand for student loans and the risk of default of outstanding loans; our ability to successfully effectuate any acquisitions; and other strategic initiatives. The preparation of our consolidated financial statements also requires

management to make certain estimates and assumptions, including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect.

All forward-looking statements contained in this Form 10-Q are expressly qualified in their entirety by the factors, risks, and uncertainties set forth in the foregoing cautionary statements, and are made only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements to conform to actual results or changes in our expectations, nor to reflect events or circumstances that occur after the date on which such statements were made. In light of these risks, uncertainties, and assumptions, you should not put undue reliance on any forward-looking statements discussed.

Selected Financial Information and Ratios


(In thousands, except per share data and percentages)	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net income (loss) attributable to SLM Corporation common stock	$	131,856		$	(49,800)		$	499,740		$	482,843
Diluted earnings (loss) per common share	$	0.63		$	(0.23)		$	2.35		$	2.18
Weighted average shares used to compute diluted earnings per common share	210,607			214,873			212,922			221,553
Return on Assets (1)	1.9		%	(0.6)		%	2.3		%	2.3		%


Other Operating Statistics (Held for Investment)
Ending Private Education Loans, net	$	21,615,067		$	20,459,933		$	21,615,067		$	20,459,933





Average education loans	$	22,263,445		$	20,497,173		$	22,578,272		$	20,805,777


(1) We calculate and report our Return on Assets as the ratio of (a) GAAP net income (loss) numerator (annualized) to (b) the GAAP total average assets denominator.

Overview

The following discussion and analysis presents a review of our business and operations as of and for the three and nine months ended September 30, 2025.

Strategic Imperatives

To focus our business and increase stockholder value, we continue to advance our strategic imperatives. Our primary focus remains on maximizing the profitability and growth of our core private student loan business, while harnessing and optimizing the power of our brand and attractive client base. In addition, we continue to seek to better inform the external narrative about student lending and Sallie Mae, and strive to maintain a rigorous and predictable capital allocation and return program to create stockholder value. We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work, while we continue to strengthen our risk and compliance functions, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk.

Key Financial Measures

Our operating results are primarily driven by net interest income from our Private Education Loan portfolio, gains and losses on loan sales, provision expense for credit losses, and operating expenses. The growth of our business and the strength of our financial condition are primarily driven by our ability to achieve our annual Private Education Loan origination goals while sustaining credit quality and maintaining cost-efficient funding sources to support our originations. A brief summary of our key financial measures (net interest income and net interest margin; loan sales and secured financings; allowance for credit losses; charge-offs and delinquencies; operating expenses; Private Education Loan originations; and funding sources) can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Form 10-K.

Results of Operations

We present the results of operations below on a consolidated basis in accordance with GAAP.

GAAP Consolidated Statements of Income (Unaudited)


(Dollars in millions, except per share amounts)	Three Months Ended September 30,				Increase (Decrease)				Nine Months Ended September 30,				Increase (Decrease)
	2025		2024		$		%		2025		2024		$		%
Interest income:
Loans	$	594	$	565	$	29	5	%	$	1,790	$	1,727	$	63	4	%
Investments	15		16		(1)		(6)		43		46		(3)		(7)
Cash and cash equivalents	49		71		(22)		(31)		137		185		(48)		(26)
Total interest income	658		653		6		1		1,970		1,958		12		1
Total interest expense	285		293		(8)		(3)		846		839		7		1
Net interest income	373		359		14		4		1,125		1,119		6		1
Less: provisions for credit losses	179		271		(92)		(34)		351		300		51		17
Net interest income after provisions for credit losses	194		88		106		120		773		818		(45)		(6)
Non-interest income:
Gains (losses) on sales of loans, net	136		—		136		100		324		255		69		27
Gains (losses) on securities, net	5		(4)		9		225		(8)		—		(8)		(100)

Other income	32		28		4		14		90		85		5		6
Total non-interest income	173		24		149		621		406		340		66		19
Non-interest expenses:
Total operating expenses	180		171		9		5		499		488		11		2
Acquired intangible assets amortization expense	1		1		—		—		3		4		(1)		(25)

Total non-interest expenses	180		172		9		5		502		492		10		2
Income (loss) before income tax expense (benefit)	186		(59)		245		415		677		666		11		2
Income tax expense (benefit)	50		(14)		64		457		165		170		(5)		(3)
Net income (loss)	136		(45)		181		402		512		497		16		3
Preferred stock dividends	4		5		(1)		(20)		12		14		(2)		(14)
Net income (loss) attributable to SLM Corporation common stock	$	132	$	(50)	$	182	364	%	$	500	$	483	$	18	4	%
Basic earnings (loss) per common share	$	0.64	$	(0.23)	$	0.87	378	%	$	2.39	$	2.21	$	0.18	8	%
Diluted earnings (loss) per common share	$	0.63	$	(0.23)	$	0.86	374	%	$	2.35	$	2.18	$	0.17	8	%
Declared dividends per common share	$	0.13	$	0.11	$	0.02	18	%	$	0.39	$	0.33	$	0.06	18	%

Note: Due to rounding, amounts in this table may not sum to totals.

GAAP Consolidated Earnings Summary

Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024

For the three months ended September 30, 2025, net income attributable to common stock was $132 million, or $0.63 diluted earnings per common share, compared with net loss attributable to common stock of $50 million, or $0.23 loss per common share, for the three months ended September 30, 2024.

The primary drivers of changes in net income for the current quarter compared with net loss in the year-ago quarter are as follows:

• Net interest income increased by $14 million in the current quarter compared with the year-ago quarter primarily due to an 18-basis point increase in our net interest margin and a $1.8 billion increase in our average Private Education Loans compared to the year-ago quarter. Our net interest margin increased in the current quarter from the year-ago quarter primarily because the yields on our interest-earning assets increased and our cost of funds decreased. The yields on our interest-earning assets increased primarily because the proportion of total interest-earning assets that were Private Education Loans is higher in the current quarter than the year-ago quarter. Our cost of funds decreased primarily due to the decline in the 30-day average SOFR compared to the year-ago quarter.

• Provision for credit losses in the current quarter was $179 million, compared with $271 million in the year-ago quarter. The year-over-year decrease was primarily due to the $119 million negative provisions recorded in the current quarter, resulting from the $1.94 billion Private Education Loan sale during the third quarter of 2025, offset by new loan commitments, net of expired commitments, and changes in the economic outlook. In the year-ago quarter, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments.

• Gains (losses) on sales of loans, net, were $136 million in the third quarter of 2025, as a result of the $1.94 billion Private Education Loan sale that occurred in the quarter. There were no gains on sales of loans, net, in the year-ago quarter, as no loans were sold in the third quarter of 2024.

• Gains (losses) on securities, net, were $5 million in gains in the current quarter compared with $4 million of losses in the year-ago quarter. The change year-over-year was due to the change in mark-to-fair value of our trading investments.

• Other income was $32 million in the third quarter of 2025, compared with $28 million in the year-ago quarter. Third-party servicing fees in the third quarter of 2025 increased $3 million compared to the year-ago quarter due to an additional $3.9 billion of loans that we sold during the past year that we continue to service on behalf of the owners of the loans.

• Third quarter 2025 total operating expenses were $180 million, up from $171 million in the year-ago quarter. The increase in total operating expenses was primarily due to increased marketing spend, offset by lower FDIC fees and personnel costs.

• During the third quarter of 2025, we recorded $1 million in amortization of acquired intangible assets, consistent with $1 million in the year-ago quarter.

• Third quarter 2025 income tax expense was $50 million, compared with $14 million income tax benefit in the year-ago quarter. Our effective income tax rate increased to 26.9 percent in the third quarter of 2025 from 24.2 percent in the year-ago quarter. The increase in the effective rate for the third quarter of 2025 was primarily due to an increase in state income taxes.

Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024

For the nine months ended September 30, 2025, net income attributable to common stock was $500 million, or $2.35 diluted earnings per common share, compared with net income attributable to common stock of $483 million, or $2.18 diluted earnings per common share, for the nine months ended September 30, 2024.

The primary drivers of changes in net income for the first nine months of 2025 compared with the first nine months of 2024 are as follows:

• Net interest income increased by $6 million in the first nine months of 2025 compared with the year-ago period primarily due to a $1.8 billion increase in our average Private Education Loans, offset by a 3-basis point decrease in our net interest margin compared with the year-ago period. Our net interest margin decreased in the current period from the year-ago period primarily because the yields on our interest-earning assets decreased but our cost of funds were unchanged. The yields on our interest-earning assets decreased due to the decline in the 30-day average SOFR compared to the year-ago period. Historically, the yields on interest-earning assets reprice more quickly than our cost of funds. As such, the impacts of the declining interest rate environment on our interest-bearing liabilities were delayed when compared to our interest-earning assets, resulting in the yields on our interest-earning assets decreasing while the yields on our interest-bearing liabilities remained unchanged.

• Provision for credit losses in the nine months ended September 30, 2025 was $351 million, compared with $300 million in the year-ago period. During the first nine months of 2025, the increase in the provision for credit losses was primarily due to new loan commitments, net of expired commitments and changes in the economic outlook, offset by $235 million in negative provisions resulting from the $3.94 billion in Private Education Loan sales during the first nine months of 2025. In the year-ago period, the provision for credit losses was primarily affected by negative provisions resulting from Private Education Loan sales during the first nine months ended September 30, 2024, an improved economic outlook, and changes in management overlays and recovery rates, offset by new loan commitments, net of expired commitments, and increases to the provision as a result of decreases in our estimates of the historical long-term average prepayment speeds used after the two-year reasonable and supportable period.

• Gains (losses) on sales of loans, net, were $324 million in the nine months ended September 30, 2025, as a result of the $3.94 billion in Private Education Loan sales that occurred in the period. There were $255 million in gains (losses) on sales, net, in the year-ago period, as a result of the $3.69 billion in Private Education Loan sales that occurred in the first nine months of 2024.

• Gains (losses) on securities, net, were $8 million of losses in the first nine months of 2025 compared with less than $1 million in gains in the year-ago period. The change year-over-year was primarily due to an impairment recorded in the first quarter of 2025 on certain of our non-marketable equity securities, and the change in mark-to-fair value of our trading investments.

• Other income was $90 million in the first nine months of 2025, compared with $85 million in the year-ago period. Third-party servicing fees in the first nine months of 2025 increased $8 million compared to the year-ago period due to an additional $3.9 billion of loans that we sold during the past year that we continue to service on behalf of the owners of the loans. The increase in third-party servicing fees was offset by a $3 million decrease in early withdrawal penalty fee income compared to the year-ago period, which was related to a health savings account provider that redeemed its deposits early and paid an early withdrawal penalty in the first quarter of 2024.

• Total operating expenses for the first nine months of 2025 were $499 million, an increase from $488 million in the year-ago period. The increase in total operating expenses was primarily due to increased marketing spend and higher spending on information technology initiatives, offset by lower personnel costs and reduced FDIC fees.

• During the first nine months of 2025, we recorded $3 million in amortization of acquired intangible assets, compared with $4 million in the year-ago period. The decrease was a result of an increase in amortization recorded on our customer relationships in the year-ago period in accordance with the accelerated amortization method, and the impairment write-down of the Scholly partner relationships intangible asset in the fourth quarter of 2024 which resulted in no amortization on that intangible asset in the current period.

• Income tax expense for the nine months ended September 30, 2025 was $165 million, compared with $170 million in the year-ago period. Our effective income tax rate decreased to 24.4 percent in the first nine months of 2025 from 25.5 percent in the year-ago period. The decrease in the effective rate for the first nine months of 2025 was primarily due to a decrease in state income taxes.

Financial Condition

Average Balance Sheets

The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities and reflects our net interest margin on a consolidated basis.


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
(Dollars in thousands)	Balance		Rate		Balance		Rate		Balance		Rate		Balance		Rate
Average Assets
Private Education Loans	$	22,263,445	10.58	%	$	20,497,173	10.79	%	$	22,578,272	10.60	%	$	20,805,777	10.90	%
FFELP Loans	—		—		477,869		7.48		—		—		502,018		7.48

Taxable securities	1,802,664		3.29		2,374,419		2.73		1,839,040		3.16		2,401,533		2.56
Cash and other short-term investments	4,481,134		4.35		5,267,092		5.40		4,210,761		4.37		4,589,653		5.40
Total interest-earning assets	28,547,243		9.14	%	28,616,553		9.07	%	28,628,073		9.20	%	28,298,981		9.24	%

Non-interest-earning assets	581,612				605,065				542,589				462,404

Total assets	$	29,128,855			$	29,221,618			$	29,170,662			$	28,761,385

Average Liabilities and Equity
Brokered deposits	$	8,043,304	4.07	%	$	10,003,899	4.04	%	$	8,637,092	4.03	%	$	10,137,207	3.83	%
Retail and other deposits	12,171,841		4.13		11,058,951		4.72		11,712,073		4.17		10,980,171		4.72
Other interest-bearing liabilities (1)	6,388,767		4.68		5,758,235		4.18		6,377,364		4.61		5,376,457		4.00
Total interest-bearing liabilities	26,603,912		4.24	%	26,821,085		4.35	%	26,726,529		4.23	%	26,493,835		4.23	%

Non-interest-bearing liabilities	118,282				206,072				85,781				130,574
Equity	2,406,661				2,194,461				2,358,352				2,136,976
Total liabilities and equity	$	29,128,855			$	29,221,618			$	29,170,662			$	28,761,385

Net interest margin			5.18	%			5.00	%			5.25	%			5.28	%

(1) Includes the average balance of our unsecured borrowings, as well as secured borrowings and amortization expense of transaction costs related to our term asset-backed securitizations and our Secured Borrowing Facility.

Rate/Volume Analysis

The following rate/volume analysis shows the relative contribution of changes in interest rates and asset volumes to changes in interest income, interest expense, and net interest income.


(Dollars in thousands)	Increase (Decrease)		Change Due To (1)
			Rate		Volume
Three Months Ended September 30, 2025 vs. 2024
Interest income	$	4,948	$	4,758	$	190
Interest expense	(8,626)		(7,075)		(1,551)
Net interest income	$	13,574	$	13,499	$	75

Nine Months Ended September 30, 2025 vs. 2024
Interest income	$	12,763	$	(8,111)	$	20,874
Interest expense	6,587		(4)		6,591
Net interest income	$	6,176	$	(5,745)	$	11,921

(1) Changes in income and expense due to both rate and volume have been allocated in proportion to the relationship of the absolute dollar amounts of the change in each. The changes in income and expense are calculated independently for each line in the table. The totals for the rate and volume columns are not the sum of the individual lines.

Summary of Our Loans Held for Investment Portfolio

Ending Loans Held for Investment Balances, net


	Total Loans Held for Investment (Private Education Loans)
(Dollars in thousands)	September 30, 2025		December 31, 2024
Total loan portfolio:
In-school (1)	$	4,407,756	$	4,397,127
Grace, repayment and other (2)	18,622,243		17,837,881
Total, gross	23,029,999		22,235,008
Deferred origination costs and unamortized premium/(discount)	111,172		103,070
Allowance for credit losses	(1,526,104)		(1,435,920)
Total loans held for investment portfolio, net	$	21,615,067	$	20,902,158

(1) Loans for customers still attending school and who are not yet required to make payments on the loans.

(2) Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

Average Loans Held for Investment Balances (net of unamortized premium/(discount))


	Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands)	2025				2024				2025				2024
Private Education Loans	$	22,263,445	100	%	$	20,497,173	100	%	$	22,578,272	100	%	$	20,805,777	100	%

Loans Held for Investment, Net — Activity


Three Months Ended September 30, 2025 (dollars in thousands)	Total Loans Held for Investment, net (Private Education Loans)
Beginning balance	$	21,160,332
Acquisitions and originations:
Fixed-rate	2,499,716
Variable-rate	456,993
Total acquisitions and originations	2,956,709
Capitalized interest and deferred origination cost premium amortization	119,125
Sales	(1,778,089)
Loan consolidations to third parties	(232,520)
Allowance	(56,596)

Repayments and other	(553,894)
Ending balance	$	21,615,067


Three Months Ended September 30, 2024 (dollars in thousands)	Private Education Loans		FFELP Loans		Total Loans Held for Investment, net
Beginning balance	$	18,432,600	$	482,733	$	18,915,333
Acquisitions and originations:
Fixed-rate	2,583,116		—		2,583,116
Variable-rate	196,515		—		196,515
Total acquisitions and originations	2,779,631		—		2,779,631
Capitalized interest and deferred origination cost premium amortization	103,407		5,461		108,868


Loan consolidations to third parties	(189,196)		(7,364)		(196,560)
Allowance	(148,029)		4,060		(143,969)
Transfer to loans held-for-sale	—		(466,168)		(466,168)
Repayments and other	(518,480)		(18,722)		(537,202)
Ending balance	$	20,459,933	$	—	$	20,459,933


Nine Months Ended September 30, 2025 (dollars in thousands)	Total Loans Held for Investment, net (Private Education Loans)
Beginning balance	$	20,902,158
Acquisitions and originations:
Fixed-rate	5,543,161
Variable-rate	887,742
Total acquisitions and originations	6,430,903
Capitalized interest and deferred origination cost premium amortization	380,415
Sales	(3,625,823)
Loan consolidations to third parties	(668,258)
Allowance	(90,185)

Repayments and other	(1,714,143)
Ending balance	$	21,615,067


Nine Months Ended September 30, 2024 (dollars in thousands)	Private Education Loans		FFELP Loans		Total Loans Held for Investment, net
Beginning balance	$	19,772,293	$	534,064	$	20,306,357
Acquisitions and originations:
Fixed-rate	5,729,841		—		5,729,841
Variable-rate	341,568		—		341,568
Total acquisitions and originations	6,071,409		—		6,071,409
Capitalized interest and deferred origination cost premium amortization	334,144		16,796		350,940
Sales	(3,430,920)		—		(3,430,920)

Loan consolidations to third parties	(564,373)		(45,467)		(609,840)
Allowance	(78,516)		4,667		(73,849)
Transfer from loans held-for-sale	—		(466,168)		(466,168)
Repayments and other	(1,644,104)		(43,892)		(1,687,996)
Ending balance	$	20,459,933	$	—	$	20,459,933

“Loan consolidations to third parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in full principal and interest repayment status. The amount of loans in full principal and interest repayment status in our Private Education Loans held for investment portfolio at September 30, 2025 increased by 2.7 percent compared with September 30, 2024, and now totals 37 percent of our Private Education Loans held for investment portfolio at September 30, 2025. The balance of loans held for investment in full principal and interest repayment status was primarily affected in 2024 and in the first nine months of 2025 by loan sales.

“Loan consolidations to third parties” for the three months ended September 30, 2025 total 2.9 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at September 30, 2025, or 1.1 percent of our total Private Education Loans held for investment portfolio at September 30, 2025, compared with the year-ago quarter of 2.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status, or 0.9 percent of our total Private Education Loans held for investment portfolio, respectively. The small increase in consolidations compared to the year-ago quarter is primarily attributable to lower interest rates in 2025. Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.

The “Repayments and other” category includes all scheduled repayments, as well as voluntary prepayments, made on loans in repayment (including loans in full principal and interest repayment status) and also includes charge-offs. Consequently, this category can be significantly affected by the volume of loans in repayment.

Private Education Loan Originations

The following table summarizes our Private Education Loan originations. Originations represent loans that were funded or acquired during the period presented.


	Three Months Ended September 30,
(Dollars in thousands)	2025			%		2024			%
Smart Option - interest only (1)	$	632,777		21	%	$	523,827		19	%
Smart Option - fixed pay (1)	961,291			33		906,838			33
Smart Option - deferred (1)	1,079,012			37		1,091,297			40
Graduate Loan (2)	263,313			9		236,567			8

Total Private Education Loan originations	$	2,936,393		100	%	$	2,758,529		100	%

Percentage of loans with a cosigner	94.5		%			92.4		%
Average FICO at approval (3)	756					754


	Nine Months Ended September 30,
(Dollars in thousands)	2025			%		2024			%
Smart Option - interest only (1)	$	1,267,613		20	%	$	1,100,818		18	%
Smart Option - fixed pay (1)	2,103,942			33		1,994,067			33
Smart Option - deferred (1)	2,440,855			38		2,428,201			40
Graduate Loan (2)	581,063			9		508,429			9

Total Private Education Loan originations	$	6,393,473		100	%	$	6,031,515		100	%

Percentage of loans with a cosigner	92.9		%			90.2		%
Average FICO at approval (3)	754					751

(1) Interest only, fixed pay, and deferred describe the payment option while in school or in grace period. See Item 1. “Business - Our Business - Private Education Loans” in the 2024 Form 10-K for a further discussion.

(2) For the three months ended September 30, 2025, the Graduate Loan originations include $9.2 million of Smart Option Loans where the student was in a graduate status. For the three months ended September 30, 2024, the Graduate Loan originations include $10.0 million of Smart Option Loans where the student was in a graduate status. For the nine months ended September 30, 2025, the Graduate Loan originations include $21.1 million of Smart Option Loans where the student was in a graduate status. For the nine months ended September 30, 2024, the Graduate Loan originations include $28.3 million of Smart Option Loans where the student was in a graduate status.

(3) Represents the higher credit score of the cosigner or the borrower.

Allowance for Credit Losses

Allowance for Loan Losses Activity


Three Months Ended September 30, (dollars in thousands)	2025		2024
	Total Portfolio (Private Education Loans)		Private Education Loans		FFELP Loans		Total Portfolio
Beginning balance	$	1,469,509	$	1,265,592	$	4,060	$	1,269,652
Transfer from unfunded commitment liability (1)	109,422		115,421		—		115,421
Less:
Charge-offs	(91,072)		(87,737)		(131)		(87,868)
Write-downs arising from transfer of loans to held for sale (2)	—		—		(8,297)		(8,297)
Plus:
Recoveries	13,541		11,149		—		11,149
Provisions for credit losses:
Provision, current period	143,498		109,196		4,368		113,564
Loan sale reduction to provision	(118,794)		—		—		—

Total provisions for credit losses (3)	24,704		109,196		4,368		113,564
Ending balance	$	1,526,104	$	1,413,621	$	—	$	1,413,621


Nine Months Ended September 30, (dollars in thousands)	2025		2024
	Total Portfolio (Private Education Loans)		Private Education Loans		FFELP Loans		Total Portfolio
Beginning balance	$	1,435,920	$	1,335,105	$	4,667	$	1,339,772
Transfer from unfunded commitment liability (1)	242,434		276,750		—		276,750
Less:
Charge-offs	(284,841)		(272,653)		(380)		(273,033)
Write-downs arising from transfer of loans to held for sale (2)	—		—		(8,297)		(8,297)
Plus:
Recoveries	36,868		33,840		—		33,840
Provisions for credit losses:
Provision, current period	330,976		276,534		4,010		280,544
Loan sale reduction to provision	(235,253)		(235,955)		—		(235,955)

Total provisions for credit losses (3)	95,723		40,579		4,010		44,589
Ending balance	$	1,526,104	$	1,413,621	$	—	$	1,413,621

(1) See Note 4, “Allowance for Credit Losses and Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2) Represents fair value adjustments on loans transferred to held for sale.

(3) See “ — Financial Condition — Allowance for Credit Losses — Provision for Credit Losses” in this Item 2 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

Provision for Credit Losses

Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
Three Months Ended September 30, (dollars in thousands)	2025		2024
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	24,704	$	109,196
Provisions for unfunded loan commitments	154,758		157,901
Total Private Education Loan provisions for credit losses	179,462		267,097
Total FFELP Loans provisions for credit losses	—		4,368
Provisions for credit losses reported in consolidated statements of income	$	179,462	$	271,465


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
Nine Months Ended September 30, (dollars in thousands)	2025		2024
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	95,723	$	40,579
Provisions for unfunded loan commitments	255,743		255,747
Total Private Education Loan provisions for credit losses	351,466		296,326
Total FFELP Loans provisions for credit losses	—		4,010
Provisions for credit losses reported in consolidated statements of income	$	351,466	$	300,336

Private Education Loan Allowance for Credit Losses

In establishing the allowance for Private Education Loan losses as of September 30, 2025, we considered several factors with respect to our Private Education Loan held for investment portfolio, in particular, credit quality and delinquency, forbearance, and charge-off trends.

Private Education Loans held for investment in full principal and interest repayment status were 37 percent of our total Private Education Loans held for investment portfolio at September 30, 2025, compared with 38 percent at September 30, 2024.

For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Credit Losses” and Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in the 2024 Form 10-K.

The table below presents our Private Education Loans held for investment portfolio delinquency trends. Loans in repayment include loans making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following table, do not include loans in the “loans in forbearance” metric).


Private Education Loans Held for Investment	2025				2024
September 30, (dollars in thousands)	Balance		%		Balance		%
Loans in-school/grace/deferment (1)	$	6,405,768			$	6,115,797
Loans in forbearance (2)	331,761				301,414




Loans in repayment and percentage of each status:
Loans current	15,638,904		96.0	%	14,806,983		96.4	%
Loans delinquent 30-59 days (3)	335,312		2.0		285,471		1.8
Loans delinquent 60-89 days (3)	173,135		1.1		149,098		1.0
Loans 90 days or greater past due (3)	145,119		0.9		118,703		0.8
Total Private Education Loans in repayment	16,292,470		100.0	%	15,360,255		100.0	%
Total Private Education Loans, gross	23,029,999				21,777,466
Private Education Loans deferred origination costs and unamortized premium/(discount)	111,172				96,088
Total Private Education Loans	23,141,171				21,873,554
Private Education Loans allowance for losses	(1,526,104)				(1,413,621)
Private Education Loans, net	$	21,615,067			$	20,459,933
Percentage of loans in repayment			70.7	%			70.5	%
Delinquencies as a percentage of loans in repayment			4.0	%			3.6	%

Percentage of loans in forbearance:
Percentage of loans in an extended grace period (4)			1.0	%			0.9	%
Percentage of loans in hardship and other forbearances (5)			1.0	%			1.0	%

(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.

(4) We calculate the percentage of loans in an extended grace period as the ratio of (a) Private Education Loans in forbearance in an extended grace period numerator to (b) Private Education Loans in repayment and forbearance denominator. An extended grace period aligns with The Office of the Comptroller of the Currency definition of an additional, consecutive, one-time period during which no payment is required for up to six months after the initial grace period. We typically grant this extended grace period to customers who may be having difficulty finding employment before the full principal and interest repayment period starts or once it has begun. Loans in forbearance in an extended grace period were approximately $165 million and $143 million at September 30, 2025 and 2024, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.

(5) We calculate the percentage of loans in hardship and other forbearances as the ratio of (a) Private Education Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) numerator to (b) Private Education Loans in repayment and forbearance denominator. If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations, which may include a short-term hardship forbearance. Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) were approximately $166 million and $159 million at September 30, 2025 and 2024, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.

Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 4.0 percent at September 30, 2025 from 3.6 percent at September 30, 2024. The increase in the delinquency metric is primarily attributable to changes and refinements to our loss mitigation programs in late 2024 which generally restricted loan modification eligibility to borrowers in later-stage delinquency. See additional discussion related to collections activity in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” in the 2024 Form 10-K.

The percentage of loans in an extended grace forbearance remained relatively consistent at 1.0 percent and 0.9 percent at September 30, 2025 and September 30, 2024, respectively. The percentage of loans in hardship and other forbearances was 1.0 percent at both September 30, 2025 and September 30, 2024.

Changes in Allowance for Private Education Loan Losses

The following table summarizes changes in the allowance for Private Education Loan (held for investment) losses and the allowance for unfunded loan commitments.


	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2025			2024			2025			2024
Allowance for loan losses, beginning balance	$	1,469,509		$	1,265,592		$	1,435,920		$	1,335,105
Transfer from allowance for unfunded loan commitments (1)	109,422			115,421			242,434			276,750
Provisions:
Provision for current period	143,498			109,196			330,976			276,534
Loan sale reduction to provision	(118,794)			—			(235,253)			(235,955)

Total provisions (2)	24,704			109,196			95,723			40,579
Net charge-offs:
Charge-offs	(91,072)			(87,737)			(284,841)			(272,653)
Recoveries	13,541			11,149			36,868			33,840
Net charge-offs	(77,531)			(76,588)			(247,973)			(238,813)

Allowance for loan losses, ending balance	$	1,526,104		$	1,413,621		$	1,526,104		$	1,413,621
Allowance for unfunded loan commitments, beginning balance (1)	52,541			49,479			84,568			112,962
Provision (2)(3)	154,758			157,901			255,743			255,747
Transfer to allowance for loan losses	(109,422)			(115,421)			(242,434)			(276,750)
Allowance for unfunded loan commitments, ending balance (1)	97,877			91,959			97,877			91,959
Total allowance for credit losses, ending balance	$	1,623,981		$	1,505,580		$	1,623,981		$	1,505,580
Total Allowance Percentage of Private Education Loan Exposure (5)	5.93		%	5.84		%	5.93		%	5.84		%
Allowance for loan losses coverage of net charge-offs (annualized)	4.92			4.61			4.62			4.44
Net charge-offs as a percentage of average loans in repayment (annualized) (4)	1.95		%	2.08		%	2.06		%	2.13		%
Delinquencies as a percentage of ending loans in repayment (4)	4.01		%	3.60		%	4.01		%	3.60		%
Loans in forbearance as a percentage of ending loans in repayment and forbearance (4)	2.00		%	1.92		%	2.00		%	1.92		%
Ending total loans, gross	$	23,029,999		$	21,777,466		$	23,029,999		$	21,777,466
Average loans in repayment (4)	$	15,870,798		$	14,708,205		$	16,027,567		$	14,944,421
Ending loans in repayment (4)	$	16,292,470		$	15,360,255		$	16,292,470		$	15,360,255
Unfunded loan commitments	$	2,673,369		$	2,476,785		$	2,673,369		$	2,476,785
Total accrued interest receivable	$	1,693,268		$	1,529,814		$	1,693,268		$	1,529,814

(1) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See Note 4, “Allowance for Credit Losses and Unfunded Loan Commitments” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments.

(2) See “ — Financial Condition — Allowance for Credit Losses — Provision for Credit Losses” in this Item 2 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(3) Includes incremental provision for new commitments and changes to provision for existing commitments.

As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of these metrics considered are the allowance coverage of net charge-offs ratio; the Total Allowance Percentage of Private Education Loan Exposure; and delinquency and forbearance percentages.

Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool

In recent years, we have made significant changes to our credit administration practices, enhancing our loss mitigation programs through both our forbearance and loan modification offerings. We adjust the terms of loans for certain borrowers when we believe such changes will help our borrowers manage their student loan obligations, achieve better student outcomes and increase the collectability of the loans. These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term and/or a short-term extended repayment or interest-only alternative.

We continually monitor our credit administration practices and modify them from time to time based upon performance, industry conventions, and/or regulatory feedback.

See Note 4, “Allowance for Credit Losses and Unfunded Commitments — Loan Modifications to Borrowers Experiencing Financial Difficulty” in this Form 10-Q for additional information regarding loan modifications to borrowers experiencing financial difficulty. As discussed therein, our forbearance programs are not considered loan modifications to borrowers experiencing financial difficulty because they are either short-term in nature, and therefore do not provide a significant concession to the borrower, or they are provided for reasons other than financial difficulty being experienced by the borrower.

Forbearance

Forbearance allows a borrower to not make scheduled payments for a specified period of time. Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter requirements for delinquent borrowers. Using forbearance extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is capitalized (added to principal) at the end of the forbearance. Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however.

During the first six months following a borrower’s grace period, the borrower may be eligible for extended grace forbearance, which provides temporary payment relief to give the borrower additional time to be in a position to make regular principal and interest payments. We do not consider borrowers who are eligible for extended grace to be experiencing financial difficulty.

Hardship forbearance may be granted in order to provide temporary payment relief to borrowers who are either current in their payments but demonstrate a need for relief, or who are delinquent in their payments but demonstrate an ability and willingness to repay their obligation. In these circumstances, a borrower’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time. At the end of the forbearance period, for borrowers who were current when they entered forbearance or those who were delinquent but met specific payment requirements curing their delinquency, the borrower will enter repayment status as current. In all instances, the borrowers are expected to begin making scheduled monthly payments at the end of their forbearance periods. This strategy is aimed at assisting borrowers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans.

Disaster forbearance is used to assist borrowers affected by material events, typically federally-declared disasters, including hurricanes, wildfires, floods, and pandemics. We typically grant disaster forbearance to affected borrowers in one-month increments, up to three months at a time, but the disaster forbearance granted generally does not apply toward the 12-month forbearance limit described below. Disaster forbearance is granted based on areas impacted by federally declared disasters, not because the borrower is experiencing financial difficulty. Loans in disaster forbearance are not assessed late or other fees. Due to the nature and limited timeframe of disaster forbearance, delinquent loans granted disaster forbearance are maintained in their pre-grant delinquency status, and as such, are not reflected in our loans in forbearance metrics.

We offer certain other administrative forbearances (e.g., death and disability, bankruptcy, military service, and in school assistance) that are required by law (such as by the Servicemembers Civil Relief Act), are considered separate from our active loss mitigation programs, or do not exceed the significance threshold. We do not consider borrowers eligible for these other administrative forbearances to be experiencing financial difficulty.

Currently, we generally grant forbearance in increments of one to two months at a time, for up to 12 months over the life of the loan, although extended grace forbearance is typically granted in one six-month increment and disaster

forbearance and certain other limited instances do not apply toward the 12-month limit. We also currently require 12 months of positive payment performance by a borrower (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. This required period of positive payment performance does not apply, however, to extended grace forbearances and is not required for a borrower to receive a contractual interest rate reduction. In addition, we currently limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years. We also now count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.

Modification Programs other than Forbearances

For borrowers experiencing more severe hardship, following evaluation of their ability and willingness to repay, we currently use modification programs tailored to the financial condition of the individual borrower. Pursuant to our modification programs, we may reduce the contractual interest rate on a loan to a rate between 2 percent and 8 percent temporarily, and/or in some instances may permanently extend the final maturity of a loan. For borrowers experiencing the most severe financial conditions, we may permanently reduce the contractual interest rate on a loan to 2 percent for the remaining life of the loan and also permanently extend the final maturity of the loan. Following modification, borrowers who are delinquent but meet specific payment requirements curing their delinquency will be brought current. We currently limit the granting of a permanent extension of the final maturity date of a loan to once over the life of the loan, and the number of interest rate reductions to twice over the life of the loan.

Modifications under these programs are generally considered loan modifications to borrowers experiencing financial difficulty. See Note 4, “Allowance for Credit Losses and Unfunded Commitments — Loan Modifications to Borrowers Experiencing Financial Difficulty” in this Form 10-Q for disclosures related to these modification programs. However, in some situations, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. We do not consider these to be modifications of loans to borrowers experiencing financial difficulty.

Delinquency Trends by Active Repayment Status

The tables below show the composition and status of the Private Education Loan portfolio held for investment aged by number of months in active repayment status (months for which a scheduled monthly payment was due). Active repayment status includes loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period. Our experience shows that the percentage of loans in forbearance status generally decreases the longer the loans have been in active repayment status. At September 30, 2025, Private Education Loans (held for investment) in forbearance that have been in active repayment status for fewer than 25 months as a percentage of all loans in repayment and forbearance were 1.5 percent. At September 30, 2025, approximately 75 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status for fewer than 25 months.


As of September 30, 2025 (dollars in millions)	Private Education Loans Held for Investment Aged by Number of Months in Active Repayment Status															Not Yet in Repayment			Total
	0 to 12			13 to 24			25 to 36			37 to 48			More than 48
Loans in-school/grace/deferment	$	—		$	—		$	—		$	—		$	—		$	6,406		$	6,406
Loans in forbearance	199			50			31			20			32			—			332
Loans in repayment - current	5,729			2,820			1,979			1,495			3,616			—			15,639
Loans in repayment - delinquent 30-59 days	104			47			45			40			99			—			335
Loans in repayment - delinquent 60-89 days	59			24			23			19			48			—			173
Loans in repayment - 90 days or greater past due	42			23			20			17			43			—			145
Total	$	6,133		$	2,964		$	2,098		$	1,591		$	3,838		$	6,406		23,030
Deferred origination costs and unamortized premium/(discount)																			111
Allowance for credit losses																			(1,526)
Total Private Education Loans, net																			$	21,615

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance	1.20		%	0.30		%	0.19		%	0.12		%	0.19		%	—		%	2.00		%


As of September 30, 2024 (dollars in millions)	Private Education Loans Held for Investment Aged by Number of Months in Active Repayment Status															Not Yet in Repayment			Total
	0 to 12			13 to 24			25 to 36			37 to 48			More than 48
Loans in-school/grace/deferment	$	—		$	—		$	—		$	—		$	—		$	6,116		$	6,116
Loans in forbearance	181			48			28			17			27			—			301
Loans in repayment - current	5,239			2,888			1,968			1,283			3,430			—			14,808
Loans in repayment - delinquent 30-59 days	87			47			41			29			81			—			285
Loans in repayment - delinquent 60-89 days	49			25			21			15			39			—			149
Loans in repayment - 90 days or greater past due	31			20			18			14			36			—			119
Total	$	5,587		$	3,028		$	2,076		$	1,358		$	3,613		$	6,116		21,778
Deferred origination costs and unamortized premium/(discount)																			96
Allowance for credit losses																			(1,414)
Total Private Education Loans, net																			$	20,460

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance	1.16		%	0.30		%	0.18		%	0.11		%	0.17		%	—		%	1.92		%

Private Education Loans Held for Investment Types

The following table provides information regarding the loans in repayment balance and total loan balance by Private Education Loan held for investment product type at September 30, 2025 and December 31, 2024.


As of September 30, 2025 (dollars in thousands)	Smart Option		Graduate Loan		Other (1)		Total
$ in repayment (2)	$	14,267,638	$	1,684,003	$	340,829	$	16,292,470
$ in total	$	20,202,611	$	2,402,116	$	425,272	$	23,029,999


As of December 31, 2024 (dollars in thousands)	Smart Option		Graduate Loan		Other (1)		Total
$ in repayment (2)	$	14,273,952	$	1,466,915	$	365,884	$	16,106,751
$ in total	$	19,710,266	$	2,067,468	$	457,274	$	22,235,008

(1) Other includes our Parent Loan and Career training loan products. In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in February 2023. In May 2022, we discontinued offering our Career Training loan product. Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in September 2023.

(2) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school. The allowance for credit losses considers both the collectibility of principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses.


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest (1)(2)
September 30, 2025	$	1,693,268	$	6,378	$	13,187
December 31, 2024	$	1,549,415	$	6,420	$	12,366
September 30, 2024	$	1,529,814	$	5,534	$	7,426

(1) The allowance for uncollectible interest at September 30, 2025 and 2024 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at September 30, 2025 and 2024, relates to $155 million and $139 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized. The accrued interest receivable that is/was expected to be capitalized ($1.5 billion and $1.4 billion, at September 30, 2025 and 2024, respectively) is/was reserved in the allowance for credit losses.

(2) The allowance for uncollectible interest at December 31, 2024 represents the expected losses related to the portion of accrued interest receivable on those loans in repayment ($164 million of accrued interest receivable) that was not expected to be capitalized. The accrued interest receivable that was expected to be capitalized ($1.4 billion) was reserved in the allowance for credit losses.

Liquidity and Capital Resources

Funding and Liquidity Risk Management

Our primary liquidity needs include our ongoing ability to fund our businesses throughout market cycles, including during periods of financial stress, our ongoing ability to fund originations of Private Education Loans, and our ability to meet any outflows of our Bank deposits. To achieve these objectives, we analyze and monitor our liquidity needs, and maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt primarily through asset-backed securitizations, other financing facilities, and loan sales.

At September 30, 2025 and December 31, 2024, our sources of liquidity included liquid investments with unrealized losses of $69.7 million and $105.8 million, respectively. It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire conditions. Our liquidity management is governed by policies approved by our Board of Directors. Oversight of these policies is performed in the Asset and Liability Committee, a management-level committee. These policies take into account the volatility of cash flow forecasts, expected asset and liability maturities, anticipated loan demand, and a variety of other factors to establish minimum liquidity guidelines.

Key risks associated with our liquidity relate to our ability to access the capital markets and the markets for bank deposits at reasonable rates. This ability may be affected by our performance, competitive pressures, the macroeconomic environment, and the impact they have on the availability of funding sources in the marketplace. We target maintaining sufficient on-balance sheet and contingent sources of liquidity to enable us to meet all contractual and contingent obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test the resiliency of our balance sheet. We hold a significant liquidity buffer of cash and liquid investments, which we expect to maintain through 2025. Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.

Sources of Liquidity and Available Capacity

Ending Balances


(Dollars in thousands)	September 30, 2025		December 31, 2024
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries	$	15,912	$	3,745
Sallie Mae Bank (1)	3,523,429		4,696,621
Available-for-sale investments	1,132,339		1,361,431
Total unrestricted cash and liquid investments	$	4,671,680	$	6,061,797

(1) This amount will be used primarily to originate Private Education Loans at the Bank.

Average Balances


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries	$	9,179	$	10,703	$	8,216	$	8,232
Sallie Mae Bank (1)	4,279,008		5,070,733		4,008,639		4,398,998
Available-for-sale investments	1,127,728		1,644,517		1,182,684		1,733,576
Total unrestricted cash and liquid investments	$	5,415,915	$	6,725,953	$	5,199,539	$	6,140,806

(1) This amount will be used primarily to originate Private Education Loans at the Bank.

Deposits

The following table summarizes total deposits at September 30, 2025 and December 31, 2024.


	September 30,		December 31,
(Dollars in thousands)	2025		2024
Deposits - interest-bearing	$	20,012,108	$	21,066,752
Deposits - non-interest-bearing	—		1,816
Total deposits	$	20,012,108	$	21,068,568

Our total deposits of $20.0 billion were comprised of $7.7 billion in brokered deposits and $12.3 billion in retail and other deposits at September 30, 2025, compared with total deposits of $21.1 billion, which were comprised of $9.5 billion in brokered deposits and $11.6 billion in retail and other deposits, at December 31, 2024.

Interest-bearing deposits as of September 30, 2025 and December 31, 2024 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity MMDAs, and retail and brokered CDs. Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.2 billion and $7.0 billion of our deposit total as of September 30, 2025 and December 31, 2024, respectively. The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.

Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $2 million and $3 million in the three months ended September 30, 2025 and 2024, respectively and placement fee expense of $6 million and $8 million in the nine months ended September 30, 2025 and 2024, respectively. There were $4 million in fees paid to third-party brokers related to brokered CDs for both the three and nine months ended September 30, 2025. Fees paid to third-party brokers related to brokered CDs were $6 million for both the three and nine months ended September 30, 2024.

Interest bearing deposits at September 30, 2025 and December 31, 2024 are summarized as follows:


	September 30, 2025				December 31, 2024
(Dollars in thousands)	Amount		Qtr.-End Weighted Average Stated Rate (1)		Amount		Year-End Weighted Average Stated Rate (1)
Money market	$	9,642,613	4.07	%	$	9,582,290	4.27	%
Savings	1,075,591		3.83		944,034		4.02
Certificates of deposit	9,293,904		4.01		10,540,428		4.20
Deposits - interest bearing	$	20,012,108			$	21,066,752

(1) Includes the effect of interest rate swaps in effective hedge relationships.

As of September 30, 2025 and December 31, 2024, there were $590 million and $567 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $53 million and $92 million at September 30, 2025 and December 31, 2024, respectively.

Counterparty Exposure

Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative counterparty will not be able to meet its obligations to us.

Excess cash is generally invested with the FRB on an overnight basis or in the FRB’s Term Deposit Facility, minimizing counterparty exposure on cash balances.

Our investment portfolio is primarily comprised of a small portfolio of mortgage-backed securities issued by government agencies and government-sponsored enterprises that are purchased to meet CRA targets. Additionally, our

investing activity is governed by Board-approved limits on the amount that is allowed to be invested with any one issuer based on the credit rating of the issuer, further minimizing our counterparty exposure. Counterparty credit risk is considered when valuing investments and considering impairment.

Related to derivative transactions, protection against counterparty risk is generally provided by International Swaps and Derivatives Association, Inc. Credit Support Annexes (“CSAs”), or clearinghouses for over-the-counter derivatives. CSAs require a counterparty to post collateral if a potential default would expose the other party to a loss. All derivative contracts entered into by the Bank are covered under CSAs or clearinghouse agreements and require collateral to be exchanged based on the net fair value of derivatives with each counterparty. Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position, less any collateral held by us and plus collateral posted with the counterparty.

Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of September 30, 2025, $563 million notional of our derivative contracts were cleared on the CME and $21 million were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 96.4 percent and 3.6 percent, respectively, of our total notional derivative contracts of $584 million at September 30, 2025.

For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of September 30, 2025 was $(6.1) million and $(0.1) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).

We have liquidity exposure related to collateral movements between us and our derivative counterparties. Movements in the value of the derivatives, which are primarily affected by changes in interest rates, may require us to return cash collateral held or may require us to access primary liquidity to post collateral to counterparties.

The table below highlights exposure related to our derivative counterparties as of September 30, 2025.


As of September 30, 2025 (dollars in thousands)	SLM Corporation and Sallie Mae Bank Contracts
Total exposure, net of collateral	$	809
Exposure to counterparties with credit ratings, net of collateral	$	809
Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3	—		%
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3	—		%

Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial condition. Under U.S. Basel III and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.

Capital Management

The Bank intends to maintain at all times regulatory capital levels that meet both the minimum levels required under U.S. Basel III (including applicable buffers) and the levels necessary to be considered “well capitalized” under the FDIC’s prompt corrective action framework, in order to support asset growth and operating needs, address unexpected credit risks, and protect the interests of depositors and the Deposit Insurance Fund administered by the FDIC. The Bank’s Capital Policy requires management to monitor these capital standards and the Bank’s compliance with them. The Board of Directors and management periodically evaluate the quality of assets, the stability of earnings, and the adequacy of the allowance for credit losses for the Bank. The Company is a source of strength for the Bank and will provide additional capital if necessary.

We believe that current and projected capital levels are appropriate for 2025. As of September 30, 2025, the Bank’s risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully phased-in U.S. Basel III standards as well as the “well capitalized” standards under the prompt corrective action framework.

Under U.S. Basel III, the Bank is required to maintain the following minimum regulatory capital ratios: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.

Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. On each of January 1, 2022, 2023, 2024, and 2025, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes. As of January 1, 2025, all adjusted transition amounts have been phased in for regulatory capital purposes. The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.


	Actual				U.S. Basel III Minimum Requirements Plus Buffer (1)(2)
(Dollars in thousands)	Amount		Ratio		Amount			Ratio
As of September 30, 2025 (3) :
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	3,063,308	11.3	%	$	1,902,074	>	7.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	3,063,308	11.3	%	$	2,309,661	>	8.5	%
Total Capital (to Risk-Weighted Assets)	$	3,418,923	12.6	%	$	2,853,110	>	10.5	%
Tier 1 Capital (to Average Assets)	$	3,063,308	10.4	%	$	1,177,879	>	4.0	%

As of December 31, 2024 (3) :
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	2,957,067	11.3	%	$	1,827,318	>	7.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	2,957,067	11.3	%	$	2,218,886	>	8.5	%
Total Capital (to Risk-Weighted Assets)	$	3,294,663	12.6	%	$	2,740,976	>	10.5	%
Tier 1 Capital (to Average Assets)	$	2,957,067	9.7	%	$	1,213,505	>	4.0	%

(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.

(2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework.

(3) For both September 30, 2025 and December 31, 2024, the actual amounts and the actual ratios include the fully phased in adjusted transition amounts discussed above.

Dividends

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein. The Bank declared $100 million and $294 million in dividends to the Company for the three and nine months ended September 30, 2025, respectively, and $116 million and $414 million in dividends to the Company for the three and nine months ended September 30, 2024, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under the share repurchase programs.

Borrowings

Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program and our Secured Borrowing Facility. The issuing entities for those secured borrowings are VIEs and are consolidated for accounting purposes. The following table summarizes our borrowings at September 30, 2025 and December 31, 2024, respectively. For additional information, see Note 7, “Borrowings” in this Form 10-Q.


	September 30, 2025						December 31, 2024
(Dollars in thousands)	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
Unsecured borrowings:
Unsecured debt (fixed-rate)	$	—	$	990,956	$	990,956	$	—	$	995,420	$	995,420
Total unsecured borrowings	—		990,956		990,956		—		995,420		995,420
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate	—		4,404,267		4,404,267		—		4,617,743		4,617,743
Variable-rate	—		743,772		743,772		—		827,182		827,182
Total Private Education Loan term securitizations	—		5,148,039		5,148,039		—		5,444,925		5,444,925
Secured Borrowing Facility	—		700,000		700,000		—		—		—
Total secured borrowings	—		5,848,039		5,848,039		—		5,444,925		5,444,925
Total	$	—	$	6,838,995	$	6,838,995	$	—	$	6,440,345	$	6,440,345

Other Borrowing Sources

We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at September 30, 2025. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing, and is payable daily. We did not utilize these lines of credit in the nine months ended September 30, 2025, nor in the year ended December 31, 2024.

We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Window. The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At September 30, 2025 and December 31, 2024, the value of our pledged collateral at the FRB totaled $2.0 billion and $2.2 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the nine months ended September 30, 2025, nor in the year ended December 31, 2024.

Contractual Loan Commitments

When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At September 30, 2025, we had $2.7 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2025/2026 academic year. At September 30, 2025, we had a $98 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on the unfunded commitments. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2024 Form 10-K and Note 4, “Allowance for Credit Losses and Unfunded Loan Commitments” in this Form 10-Q for additional information.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with GAAP. In preparing our consolidated financial statements, we have identified certain accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties.

The critical accounting estimates we have identified relate to the allowance for credit losses. These estimates reflect our best judgment about current and, for some estimates, including management overlays, future economic and market conditions. These estimates are based on information available as of the date of these financial statements. If conditions change from those expected, it is reasonably possible that these judgments and estimates could change, which may result in a change in the allowance for credit losses or material changes to our consolidated financial statements. A discussion of our critical accounting policies can be found in our 2024 Form 10-K.

Allowance for Credit Losses

We maintain an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well as for future loan commitments, at the reporting date.

In determining the lifetime expected credit losses on our Private Education Loan portfolio loan segments, we use a discounted cash flow method. This method requires us to project future principal and interest cash flows on our loans in those portfolios.

To estimate the future expected cash flows, we use statistical loan-level models that consider life of loan expectations for defaults, prepayments, recoveries, and any other qualitative adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date. These cash flows are discounted at the loan’s effective interest rate to calculate the present value of those cash flows. Management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The difference between the present value of those cash flows and the amortized cost basis of the underlying loans is the allowance for credit losses. Entities that measure credit losses based on the present value of expected future cash flows are permitted to report the entire change in present value as credit loss expense, but may alternatively report the change in present value due to the passage of time as interest income. We have elected to report the entire change in present value as credit loss expense.

determine the appropriate weighting of these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes. This weighting of expectations is used in calculating our current expected credit losses recorded each period.

• Economic forecasts;

• Weighting of economic forecasts; and

• Recovery rates.

In the second quarter of 2024, we implemented a loan-level future default rate model that includes current portfolio characteristics and forecasts of real gross domestic product and college graduate unemployment. In the second quarter of 2024, we also implemented a future prepayment speeds model to include forecasts of real gross domestic product, retail sales, SOFR, and the U.S. 10-year treasury rate. These models reduce the reliance on certain qualitative overlays compared to the previous default rate and prepayment speeds models. Prior to these changes, our default rate and prepayment speeds models used forecasts of college graduate unemployment, retail sales, home price index, and median family income. Both the future default rate model and the future prepayment speeds model are used in determining the adequacy of the allowance for credit losses.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity Analysis

Our interest rate risk management program seeks to manage and control interest rate risk, thereby reducing our exposure to fluctuations in interest rates, and achieving consistent and acceptable levels of profit in any rate environment and sustainable growth in net interest income over the long term. We evaluate and monitor interest rate risk through two primary methods:

• Earnings at Risk (“EAR”), which measures the impact of hypothetical changes in interest rates on net interest income; and

• Economic Value of Equity (“EVE”), which measures the sensitivity or change in the economic value of equity to changes in interest rates.

A number of potential interest rate scenarios are simulated using our asset liability management system. The Bank is the primary source of interest rate risk within the Company. At present, a significant portion of the Bank’s earning assets and a large balance of deposits were indexed to 30-day average SOFR. Therefore, 30-day average SOFR is considered a core rate in our interest rate risk analysis. The 30-day average SOFR and other rates are shocked in parallel for shock scenarios unless otherwise indicated. Rates are adjusted up or down via a set of scenarios that includes both rate shocks and ramps. Rate shocks represent an immediate and sustained change in key rates, with the resulting changes in other indices correlated accordingly. Interest rate ramps represent a linear increase in those key rates over the course of 12 months, with the resulting changes in other indices correlated accordingly.

The following table summarizes the potential effect on earnings over the next 24 months and the potential effect on market values of balance sheet assets and liabilities at September 30, 2025 and 2024, based upon a sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and 300 basis points and a decrease of 100 and 300 basis points while credit and funding spreads remain constant. EAR analysis assumes a static balance sheet, with maturities of each product replaced with assumed issuance of new products of the same type. The EVE sensitivity is applied only to financial assets and liabilities, including hedging instruments, that existed at the balance sheet date, and does not reflect any impact of loan sales, new assets, liabilities, commitments, or hedging instruments that may arise in the future.

The EAR results for September 30, 2025 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. The higher mix of fixed-rate versus variable-rate loan disbursements continues, which results in our liabilities repricing more quickly than our assets over time. Planned loan sales, which are not included in the static EVE modeling, significantly reduce our EVE exposure. Management is evaluating this trend to determine if, and when, further actions are necessary to manage EVE sensitivity.

2025

2024

As of September 30,

+300
Basis Points

+100
Basis Points

-100
Basis Points

-300 Basis Points

+300
Basis Points

+100
Basis Points

-100
Basis Points

-300
Basis
Points

EAR - Shock

-11.4%

-3.6%

+3.1%

+9.7%

-7.0%

-2.2%

+1.9%

+5.3%

EAR - Ramp

-8.0%

-2.6%

+2.4%

+7.1%

-4.0%

-1.3%

+1.1%

+3.2%

EVE

-24.0%

-8.0%

+7.6%

+23.2%

-21.3%

-7.0%

+6.6%

+20.8%

In the preceding tables, the interest rate sensitivity analysis reflects the balance sheet mix of fully variable SOFR and Prime-based loans, and fully variable funding, including brokered CDs that have been converted to SOFR through derivative transactions. The analysis assumes that retail MMDAs and retail savings balances, while relatively sensitive to interest rate changes, will not correlate 100 percent to the full interest rate shocks or ramps.

Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, and size of our balance sheet. They also do not account for other business developments that could affect net income, or for management actions that could affect net income or could be taken to change our risk profile. Accordingly, we can give no assurance that actual results would not differ

materially from the estimated outcomes of our simulations. Further, such simulations do not represent our current view of expected future interest rate movements.

Asset and Liability Funding Gap

The table below presents our assets and liabilities (funding) arranged by underlying indices as of September 30, 2025. In the following GAAP presentation, the funding gap only includes derivatives that qualify as effective hedges (those derivatives which are reflected in net interest income, as opposed to those reflected in the “gains (losses) on derivatives and hedging activities, net” line on the consolidated statements of income). The difference between the asset and the funding is the funding gap for the specified index. This represents at a high level our exposure to interest rate risk in the form of basis risk and repricing risk, which is the risk that the different indices may reset at different frequencies or may not move in the same direction or at the same magnitude. (Note that all fixed-rate assets and liabilities are aggregated into one line item, which does not capture the differences in time due to maturity.)


As of September 30, 2025 (dollars in millions) Index	Frequency of Variable Resets	Assets		Funding (1)		Funding Gap
Fed Funds Effective Rate	daily/weekly/monthly	$	—	$	414.4	$	(414.4)
SOFR Rate	daily/weekly/monthly	5,087.3		5,657.4		(570.1)
3-month SOFR	quarterly	—		251.0		(251.0)
3-month Treasury bill	weekly	—		—		—
Prime	monthly	0.2		—		0.2
Non-Discrete reset (2)	daily/weekly	3,784.4		3,569.1		215.3
Fixed-Rate (3)		20,733.5		19,713.5		1,020.0
Total		$	29,605.4	$	29,605.4	$	—

(1) Funding (by index) includes the impact of all derivatives that qualify as effective hedges.

(2) Assets include restricted and unrestricted cash equivalents and other overnight type instruments. Funding includes liquid retail deposits and the obligation to return cash collateral held related to derivatives exposures.

(3) Assets include receivables and other assets (including premiums and reserves). Funding includes unswapped time deposits, liquid MMDAs swapped to fixed-rates, and stockholders' equity.

The “Funding Gap” in the above table primarily shows mismatches in the Fed Funds Effective Rate, SOFR rate, 3-month SOFR, Non-Discrete Reset, and Fixed-Rate categories. Changes in the Fed Funds Effective Rate, the Non-Discrete Reset, and the daily, weekly, and monthly SOFR, and 3-month SOFR categories are generally quite highly correlated, and should offset each other effectively. The funding in the fixed-rate bucket includes $2.1 billion of stockholders’ equity and $0.4 billion of non-interest bearing liabilities. We consider the overall repricing risk to be low.

We use interest rate swaps and other derivatives to achieve our risk management objectives. Our asset liability management strategy is to match assets with debt (in combination with derivatives) that have the same underlying index and reset frequency or have interest rate characteristics that we believe are highly correlated. The use of funding with index types and reset frequencies that are different from our assets exposes us to interest rate risk in the form of basis and repricing risk. This could result in our cost of funds not moving in the same direction or with the same magnitude as the yield on our assets. While we believe this risk is low, as all of these indices are short-term with rate movements that are highly correlated over a long period of time, market disruptions (which have occurred in recent years) can lead to a temporary divergence between indices, resulting in a negative impact to our earnings.

Weighted Average Life

The following table reflects the weighted average lives of our earning assets and liabilities at September 30, 2025.


As of September 30, 2025 (averages in years)			Weighted Average Life
Earning assets
Private Education Loans			5.64

Cash and investments			1.49
Total earning assets			4.83

Deposits
Short-term deposits			0.55
Long-term deposits			3.05
Total deposits			0.84

Borrowings

Long-term borrowings			3.52
Total borrowings			3.52

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2025. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this item is set forth in the “Commitments, Contingencies and Guarantees” discussion in Note 13 to our consolidated financial statements included elsewhere in this Form 10-Q, which discussion is incorporated herein by reference in response to this Item.

Item 1A. Risk Factors

Our business activities involve a variety of risks. Readers should carefully consider the risk factors disclosed in Part I, Item 1A. “Risk Factors” of our 2024 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchases

The following table provides information relating to our purchase of shares of our common stock in the three months ended September 30, 2025.


(Dollars in thousands, except per share data)	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)(3)	Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs (2)
Period:
July 1 - July 31, 2025	637,173	$	33.36	630,041	$	282,000
August 1 - August 31, 2025	960,894	$	31.73	934,464	$	252,000
September 1 - September 30, 2025	4,067,329	$	28.32	4,067,329	$	138,000
Total Third Quarter 2025	5,665,396	$	29.47	5,631,834

(1) The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) 33,562 shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding obligations in connection with exercises of stock options and vesting of restricted stock, restricted stock units, performance stock units, and dividend equivalent units.

(2) As of September 30, 2025, there was $138 million in capacity remaining under the 2024 Share Repurchase Program. The 2024 Share Repurchase Program was announced on January 24, 2024, with an effective date of January 26, 2024, and expires on February 6, 2026. See Note 9, “Stockholders’ Equity” to our consolidated financial statements in this Form 10-Q for further discussion.

(3) In the third quarter of 2025, we repurchased 5.6 million shares under 10b5-1 trading plans. See Note 9, “Stockholders’ Equity” to our consolidated financial statements in this Form 10-Q for further discussion.

The closing price of our common stock on the NASDAQ Global Select Market on September 30, 2025 was $27.68.

Item 3. Defaults Upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Insider Trading Arrangements

In the third quarter of 2025, no director or officer (as defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” for the purchase or sale of securities of the Company, each within the meaning of Item 408 of Regulation S-K.

Item 6. Exhibits

The following exhibits are furnished or filed, as applicable:




10.1			Re tention Agreement , by and between SLM Corporati on and Donna F. Vieira, dated as of September 29, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 3 0, 2025).

31.1			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			XBRL Taxonomy Extension Schema Document.

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB			XBRL Taxonomy Extension Label Linkbase Document.

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



SLM CORPORATION (Registrant)

By:						/ S / PETER M. GRAHAM
						Peter M. Graham Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Date: October 23, 2025

TABLE OF CONTENTS

Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II. Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

10.1 Retention Agreement, by and betweenSLM Corporation and Donna F. Vieira, dated as of September29, 2025(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed onSeptember30, 2025). 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification Pursuant to 18U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SLM 10-Q Quarter ended Sept. 30, 2025

Exhibits