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 “ABCP Facility”). The following table summarizes our secured borrowings at June 30, 2016 and December 31, 2015.



	June 30, 2016						December 31, 2015
	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
Secured borrowings:
Private Education Loan term securitization	$	—	$	1,038,029	$	1,038,029	$	—	$	579,101	$	579,101
ABCP Facility	—		—		—		500,175		—		500,175
Total	$	—	$	1,038,029	$	1,038,029	$	500,175	$	579,101	$	1,079,276

Short-term Borrowings

Asset-Backed Commercial Paper Funding Facility

On December 19, 2014, we closed on a $750.0 million ABCP Facility. We retained a 5 percent or $37.5 million participation interest in the ABCP Facility, resulting in $712.5 million of funds available for us to draw under the ABCP Facility. During 2015, we incurred financing costs under the ABCP Facility of approximately 0.40 percent on average on unused borrowing capacity and approximately 3-month LIBOR plus 0.80 percent on outstandings under the ABCP Facility.

On February 25, 2016, we amended and extended the maturity of our ABCP Facility. The amended ABCP Facility is a $750.0 million ABCP Facility, in which we no longer hold a participation interest. As a result, the full $750.0 million is available for us to draw. We hold 100 percent of the residual interest in the ABCP Facility trust. Under the amended ABCP Facility, we incur financing costs of between 0.35 percent and 0.45 percent on unused borrowing capacity and approximately 3‑month LIBOR plus 1.00 percent on outstandings. The amended ABCP Facility extends the revolving period, during which we may borrow, repay and reborrow funds, until February 23, 2017. The scheduled amortization period, during which amounts outstanding under the ABCP Facility must be repaid, ends on February 23, 2018 (or earlier, if certain material adverse events occur). At June 30, 2016, there were no outstanding balances and no encumbered Private Education Loans under the ABCP Facility.

Short-term borrowings have a remaining term to maturity of one year or less. The ABCP Facility's contractual maturity is two years from the date of inception or renewal (one year revolving period plus a one year amortization period); however, we classify advances under our ABCP Facility as short-term borrowings because it is our intention to repay those advances within one year.

Long-term Borrowings

On May 26, 2016, we executed our $551 million SMB Private Education Loan Trust 2016-A term ABS transaction, which was accounted for as an on-balance sheet secured financing. We retained a 100 percent or $50 million interest in the Class B notes and 100 percent of the residual certificates issued in the securitization. $501 million of Class A notes from the securitization were sold to third parties, raising $501 million of gross proceeds. The Class A notes had a weighted average life of 4.01 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 1.38 percent. At June 30, 2016, $583 million of our Private Education Loans were encumbered as a result of this transaction.

Secured Financings at Issuance



Issue	Date Issued	Total		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 at inception for the 2015-B securitization		$	745,580

2016-A	May 2016	$	501,000	1-month LIBOR plus 1.38%	4.01
Total notes issued in 2016		$	501,000

Total loan amount securitized at inception for the 2016-A securitization		$	619,944

____________

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

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. We consolidate the following financing VIEs as of June 30, 2016 and December 31, 2015, respectively:



	June 30, 2016
	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted Cash		Other Assets⁽¹⁾		Total
Secured borrowings:
Private Education Loan term securitization	$	—	$	1,038,029	$	1,038,029	$	1,237,676	$	29,123	$	84,294	$	1,351,093
ABCP Facility	—		—		—		—		—		—		—
Total	$	—	$	1,038,029	$	1,038,029	$	1,237,676	$	29,123	$	84,294	$	1,351,093

____

(1) Other assets primarily represent accrued interest receivable.



	December 31, 2015
	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted Cash		Other Assets⁽¹⁾		Total
Secured borrowings:
Private Education Loan term securitization	$	—	$	579,101	$	579,101	$	687,298	$	9,996	$	45,566	$	742,860
ABCP Facility	500,175		—		500,175		923,687		12,443		58,095		994,225
Total	$	500,175	$	579,101	$	1,079,276	$	1,610,985	$	22,439	$	103,661	$	1,737,085

____

(1) Other assets primarily represent accrued interest receivable.

Other Borrowing Sources

We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $100 million at June 30, 2016. 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 six months ended June 30, 2016 and in the year ended December 31, 2015.

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 (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 to the FRB asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At June 30, 2016 and December 31, 2015, the value of our pledged collateral at the FRB totaled $2.8 billion and $1.7 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 six months ended June 30, 2016 and in the year ended December 31, 2015.