SLM Corp
For the period ended Sep 30, 2025. Filed Oct 23, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 23, 2025
SLM$16.94-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-24.
0001032033-25-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-23.
0001032033-25-000033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 178 current paragraphs.
132 unchanged; 44 reworded; 2 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 30 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Current report
(2)Represents fair value adjustments on loans transferred to held for sale.
Removed paragraphs (13)
Previous report
Recent Developments
Previous report
On July 4, 2025, H.R.1(the “Bill”) was enacted into law. The Bill implements significant reforms to the federal student loan program, including:
Previous report
•Limiting Parent PLUS loans to $20,000 per student, per year, with an aggregate, per student limit of $65,000;
Previous report
•Eliminating Graduate PLUS loans, which previously allowed graduate students to borrow up to the full cost of attendance; and
Previous report
•Limiting the amount graduate students can borrow to $20,500 per year with a $100,000 lifetime limit, and the amount professional graduate students can borrow to $50,000 per year with a $200,000 lifetime limit through the Unsubsidized Stafford loan program (these amounts are in addition to the amount borrowed for undergraduate education).
Previous report
All federal student loan program changes are to be effective for new borrowers beginning July 1, 2026, and will not apply to borrowers who begin borrowing prior to that date.
Previous report
We anticipate that these changes to the federal student loan program will present opportunities for a gradual and positive impact on our overall Private Student Loan originations volume in the coming years.
Previous report
The Bill also provides for significant U.S. tax law changes and modifications including, but not limited to, reinstating and making permanent the ability to expense research and development costs. We are currently evaluating the tax impact of the Bill’s changes and modifications.
Previous report
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
Previous report
(1) FFELP Loans were transferred to loans held for sale during the third quarter of 2024 and subsequently sold in the fourth quarter of 2024.
Previous report
(3)Includes incremental provision for new commitments and changes to provision for existing commitments.
Previous report
Short-term Borrowings
Previous report
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; however, we classify advances under our Secured Borrowing Facility as short-term borrowings because it is our intention to repay those advances within one year. At both June 30, 2025, and December 31, 2024, there were no outstanding short-term borrowings under the Secured Borrowing Facility.
Reworded paragraphs (44)
Previous wording
The following discussion and analysis presents a review of our business and operations as of and for the three and six months ended June 30, 2025.
Current wording
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.
Previous wording
For the six months ended June 30, 2025, net income attributable to common stock was $368 million, or $1.72 diluted earnings per common share, compared with net income attributable to common stock of $533 million, or $2.39 diluted earnings per common share, for the six months ended June 30, 2024.
Current wording
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.
Previous wording
The primary drivers of changes in net income for the current quarter compared with net income in the year-ago quarter are as follows:
Current wording
The primary drivers of changes in net income for the current quarter compared with net loss in the year-ago quarter are as follows:
Previous wording
•Net interest income increased by $5 million in the current quarter compared with the year-ago quarter primarily due to a $2.1 billion increase in our average Private Education Loans, offset by a 5-basis point decrease in our net interest margin compared to the year-ago period. Our net interest margin decreased in the current quarter from the year-ago quarter primarily because our cost of funds increased but the yields on our interest-earning assets were unchanged. Historically, the yields on interest-earning assets reprice more quickly than our cost of funds. As such, impacts of the declining interest rate environment on our interest-bearing liabilities were delayed when compared to our interest-earning assets, resulting in a higher cost of funds in the current quarter compared with the year-ago quarter.
Current wording
•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.
Previous wording
•Provision for credit losses in the current quarter was $149 million, compared with $17 million in the year-ago quarter. The year-over-year increase was primarily due to the $103 million negative provisions recorded in the year-ago period, resulting from the $1.59 billion Private Education Loan sale during the second quarter of 2024. Additionally, the increase was affected by new loan commitments, net of expired commitments, and changes in the economic outlook.
Current wording
•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.
Previous wording
•There were no gains on sales of loans, net, in the current quarter, as no loans were sold in the second quarter of 2025. There were $112 million in gains on sales, net, in the year-ago quarter, as a result of the $1.59 billion in Private Education Loan sale that occurred in the second quarter of 2024.
Current wording
•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.
Previous wording
•Gains (losses) on securities, net, were $3 million of losses in the current quarter compared with $2 million in gains in the year-ago quarter. The change year-over-year was due to the change in mark-to-fair value of our trading investments.
Current wording
•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.
Previous wording
•Other income was $29 million in the second quarter of 2025, compared with $28 million in the year-ago quarter. Third-party servicing fees in the second quarter of 2025 increased $2 million compared to the year-ago quarter due to an additional $2.0 billion of loans that we sold during the past year that we continue to service on behalf of the owners of the loans.
Current wording
•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.
Previous wording
•Second quarter 2025 total operating expenses were $166 million, up from $157 million in the year-ago quarter. The increase in total operating expenses was primarily due to increased marketing spend offset by lower FDIC fees.
Current wording
•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.
Previous wording
•During the second quarter of 2025, we recorded $1 million in amortization of acquired intangible assets, consistent with $1 million in the year-ago quarter.
Current wording
•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.
Previous wording
•Second quarter 2025 income tax expense was $16 million, compared with $87 million income tax expense in the year-ago quarter. Our effective income tax rate decreased to 18.7 percent in the second quarter of 2025 from 25.6 percent in the year-ago quarter. The decrease in the effective rate for the second quarter of 2025 was primarily due to a decrease in state income taxes.
Current wording
•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.
Previous wording
For the three months ended June 30, 2025, net income attributable to common stock was $67 million, or $0.32 diluted earnings per common share, compared with net income attributable to common stock of $247 million, or $1.11 diluted earnings per common share, for the three months ended June 30, 2024.
Current wording
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.
Previous wording
The primary drivers of changes in net income for the first six months of 2025 compared with the first six months of 2024 are as follows:
Current wording
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:
Previous wording
•Net interest income decreased by $7 million in the first six months of 2025 compared with the year-ago period primarily due to a 14-basis point decrease in our net interest margin, offset by a $1.8 billion increase in our average Private Education Loans 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 increased. 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 a higher cost of funds in the current period compared with the year-ago period.
Current wording
•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.
Previous wording
•Provision for credit losses in the six months ended June 30, 2025 was $172 million, compared with $29 million in the year-ago period. During the first six months of 2025, the increase in the provision for credit losses was primarily due to $116 million in negative provisions resulting from the $2.00 billion Private Education Loan sale during the first six months of 2025 compared with $236 million in negative provisions resulting from the $3.69 billion Private Education Loan sales in the year-ago period. The increase was also affected by new loan commitments, net of expired commitments, and changes in the economic outlook. 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 six months ended June 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.
Current wording
•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.
Previous wording
•Gains (losses) on sales of loans, net, were $188 million in the six months ended June 30, 2025, as a result of the $2.00 billion Private Education Loan sale 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 six months of 2024.
Current wording
•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.
Previous wording
•Gains (losses) on securities, net, were $13 million of losses in the first six months of 2025 compared with $4 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.
Current wording
•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.
Previous wording
•Other income was $58 million in the first six months of 2025, compared with $57 million in the year-ago period. Third-party servicing fees in the first six months of 2025 increased $5 million compared to the year-ago period due to an additional $2.0 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.
Current wording
•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.
Previous wording
•First-half 2025 total operating expenses were $320 million, an increase from $318 million in the year-ago period. The increase in total operating expenses was primarily due to increased marketing spend and higher spending on strategic initiatives, offset by lower personnel costs and reduced FDIC fees.
Current wording
•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.
Previous wording
•During the first six months of 2025, we recorded $2 million in amortization of acquired intangible assets, compared with $3 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.
Current wording
•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.
Previous wording
•Income tax expense for the six months ended June 30, 2025 was $115 million, compared with $184 million in the year-ago period. Our effective income tax rate decreased to 23.4 percent in the first six months of 2025 from 25.4 percent in the year-ago period. The decrease in the effective rate for the first six months of 2025 was primarily due to a decrease in state income taxes.
Current wording
•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.
Previous wording
“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 June 30, 2025 increased by 10.3 percent compared with June 30, 2024, and now totals 40 percent of our Private Education Loans held for investment portfolio at June 30, 2025. The balance of loans held for investment in full principal and interest repayment status was affected in 2024 and in the first six months of 2025 by loan sales.
Current wording
“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.
Previous wording
“Loan consolidations to third parties” for the three months ended June 30, 2025 total 2.4 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at June 30, 2025, or 1.0 percent of our total Private Education Loans held for investment portfolio at June 30, 2025, compared with the year-ago period of 2.3 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status, or 1.0 percent of our total Private Education Loans held for investment portfolio, respectively. The small increase in consolidations compared to the year-ago period 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.
Current wording
“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.
Previous wording
(2) For the three months ended June 30, 2025, the Graduate Loan originations include $3.2 million of Smart Option Loans where the student was in a graduate status. For the three months ended June 30, 2024, the Graduate Loan originations include $6.6 million of Smart Option Loans where the student was in a graduate status. For the six months ended June 30, 2025, the Graduate Loan originations include $11.9 million of Smart Option Loans where the student was in a graduate status. For the six months ended June 30, 2024, the Graduate Loan originations include $18.3 million of Smart Option Loans where the student was in a graduate status.
Current wording
(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.
Previous wording
Private Education Loans held for investment in full principal and interest repayment status were 40 percent of our total Private Education Loans held for investment portfolio at June 30, 2025, compared with 42 percent at June 30, 2024.
Current wording
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.
Previous wording
(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 $154 million and $115 million at June 30, 2025 and 2024, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.
Current wording
(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.
Previous wording
(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 $150 million and $145 million at June 30, 2025 and 2024, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.
Current wording
(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.
Previous wording
Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 3.5 percent at June 30, 2025 from 3.3 percent at June 30, 2024. The increase in the delinquency metric is primarily attributable to changes and refinements to our loss mitigation programs in 2023 and 2024. 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.
Current wording
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.
Previous wording
The percentage of loans in an extended grace forbearance remained relatively consistent at 0.9 percent and 0.8 percent at June 30, 2025 and June 30, 2024, respectively. The percentage of loans in hardship and other forbearances also remained relatively consistent at 0.9 percent and 1.0 percent at June 30, 2025 and June 30, 2024, respectively.
Current wording
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.
Previous wording
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 for a temporary period of two to four years, 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.
Current wording
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.
Previous wording
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 June 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 1.4 percent. At June 30, 2025, approximately 74 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status for fewer than 25 months.
Current wording
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.
Previous wording
(1)The allowance for uncollectible interest at June 30, 2025 and 2024 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at June 30, 2025 and 2024, relates to $159 million and $136 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 $1.2 billion, at June 30, 2025 and 2024, respectively) is/was reserved in the allowance for credit losses.
Current wording
(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.
Previous wording
At June 30, 2025 and December 31, 2024, our sources of liquidity included liquid investments with unrealized losses of $83.2 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.
Current wording
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.
Previous wording
Our total deposits of $20.5 billion were comprised of $8.6 billion in brokered deposits and $11.9 billion in retail and other deposits at June 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.
Current wording
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.
Previous wording
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 $2 million in the three months ended June 30, 2025 and 2024, respectively and placement fee expense of $4 million and $5 million in the six months ended June 30, 2025 and 2024, respectively. There were no fees paid to third-party brokers related to brokered CDs for either the three or six months ended June 30, 2025 or the three or six months ended June 30, 2024.
Current wording
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.
Previous wording
As of June 30, 2025 and December 31, 2024, there were $541 million and $567 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $82 million and $92 million at June 30, 2025 and December 31, 2024, respectively.
Current wording
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.
Previous wording
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 June 30, 2025, $566 million notional of our derivative contracts were cleared on the CME and $36 million were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 94.1 percent and 5.9 percent, respectively, of our total notional derivative contracts of $602 million at June 30, 2025.
Current wording
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.
Previous wording
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 June 30, 2025 was $(11.6) million and $(0.3) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).
Current wording
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).
Previous wording
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 June 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 $2 million and $5 million, respectively.
Current wording
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.
Previous wording
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. At June 30, 2025 and December 31, 2024, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $69 million and $83 million, net of tax of $23 million and $27 million, respectively. The capital ratios would remain above the well capitalized thresholds, including applicable capital conservation buffers, if the unrealized loss became fully recognized into capital.
Current wording
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.
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