Borrowings

Outstanding borrowings consist of secured borrowings issued through our term asset backed securitization (“ABS”) program and our asset backed commercial paper (“ABCP”) funding facility. The following table summarizes our secured borrowings at September 30, 2015. We had no secured borrowings outstanding at December 31, 2014.



	September 30, 2015
	Short-Term		Long-Term		Total
Secured borrowings:
Private Education Loan term securitization	$	—	$	593,687	$	593,687
ABCP borrowings	710,005		—		710,005
Total	$	710,005	$	593,687	$	1,303,692

On July 30, 2015, we executed our $714 million SMB Private Education Loan Trust 2015-B term ABS transaction, which was accounted for as an on-balance sheet secured financing. We retained a 5 percent or $33 million interest in the Class A and B notes, a 100 percent or $50 million interest in the Class C notes and 100 percent of the residual certificates issued in the securitization. $631 million of notes from the securitization were sold to third parties, raising $623 million of gross proceeds. The Class A and B notes had a weighted average life of 4.8 years and priced at a weighted average LIBOR equivalent cost of 1 month LIBOR plus 1.53 percent. At September 30, 2015, $692 million of our Private Education Loans were encumbered as a result of this transaction.

On-Balance Sheet Term Securitizations



Issue	Date Issued	Total Issued To Third Parties		Weighted Average Cost of Funds⁽¹⁾	Weighted Average Life

Private Education:
2015-B	July 2015	$	630,800	1 month LIBOR plus 1.53%	4.82
Total notes issued in 2015		$	630,800

Total loan amount securitized in on-balance sheet term securitizations in 2015		$	745,580

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⁽¹⁾ Represents LIBOR equivalent cost of funds for floating and fixed rate bonds, excluding issuance costs.

Asset-Backed Commercial Paper Funding Facility

On December 19, 2014, we closed on a $750 million ABCP Private Education Loan funding facility. Pursuant to FDIC safe harbor guidelines, we retained a 5 percent or $37.5 million ownership interest in the ABCP facility, resulting in $712.5 million of funds being available for us to draw under the facility. We incur financing costs under the ABCP facility of approximately 0.40 percent on unused borrowing capacity and approximately 3 month LIBOR plus 0.80 percent on outstandings under the facility. At September 30, 2015, $710 million had been drawn and remained outstanding under the facility, net of our 5 percent retention. At September 30, 2015, $902 million of our Private Education Loans were encumbered as a result of this transaction.

We consolidate our financing entities that are variable interest entities (“VIEs”) as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings. We consolidate the following financing VIEs as of September 30, 2015:



	September 30, 2015
	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted Cash		Other Assets		Total
Secured borrowings:
Private Education Loan term securitization	$	—	$	593,687	$	593,687	$	692,379	$	8,135	$	49,717	$	750,231
ABCP borrowings	710,005		—		710,005		901,515		10,070		54,297		965,882
Total	$	710,005	$	593,687	$	1,303,692	$	1,593,894	$	18,205	$	104,014	$	1,716,113

Other Borrowing Sources

We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $100,000 at September 30, 2015. 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 three and nine months ended September 30, 2015 and September 30, 2014.

We established an account at the Federal Reserve Bank (“FRB”) to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (“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 FFELP Loans and 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, 2015 and December 31, 2014, the value of our pledged collateral at the FRB totaled $1.5 billion and $1.4 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the three and nine months ended September 30, 2015 and September 30, 2014.