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Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Allowance for Loan Losses Allowance for Loan Losses
Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb incurred probable losses in the held-for-investment loan portfolios. The evaluation of the allowance for loan losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for loan losses is appropriate to cover probable losses incurred in the loan portfolios. See Note 2, “Significant Accounting Policies — Allowance for Loan Losses — Allowance for Private Education Loan Losses, — Allowance for Personal Loans, — Allowance for FFELP Loan Losses, and — Allowance for Credit Cards” for a more detailed discussion.

Allowance for Loan Losses Metrics
 
 
 
Allowance for Loan Losses
 
 
Year Ended December 31, 2019
 
 
FFELP 
Loans
 
Private Education
Loans
 
Personal
Loans
 
Credit Cards
 
Total
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
977

 
$
277,943

 
$
62,201

 
$
—

 
$
341,121

Total provision
 
1,478

 
279,570

 
72,783

 
103

 
353,934

Net charge-offs:
 
 
 
 
 
 
 
 
 
 
   Charge-offs
 
(822
)
 
(208,978
)
 
(74,313
)
 
(1
)
 
(284,114
)
   Recoveries
 
—

 
25,765

 
5,206

 
—

 
30,971

Net charge-offs
 
(822
)
 
(183,213
)
 
(69,107
)
 
(1
)
 
(253,143
)
Ending Balance
 
$
1,633

 
$
374,300

 
$
65,877

 
$
102

 
$
441,912

Allowance:
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
186,697

 
$
—

 
$
—

 
$
186,697

Ending balance: collectively evaluated for impairment
 
$
1,633

 
$
187,603

 
$
65,877

 
$
102

 
$
255,215

Loans:
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
1,581,966

 
$
—

 
$
—

 
$
1,581,966

Ending balance: collectively evaluated for impairment
 
$
783,306

 
$
21,607,625

 
$
1,049,007

 
$
3,884

 
$
23,443,822

Net charge-offs as a percentage of average loans in repayment(1)
 
0.13
%
 
1.17
%
 
6.07
%
 
0.13
%
 
 
Allowance as a percentage of the ending total loan balance
 
0.21
%
 
1.61
%
 
6.28
%
 
2.63
%
 
 
Allowance as a percentage of the ending loans in repayment(1)
 
0.26
%
 
2.23
%
 
6.28
%
 
2.63
%
 
 
Allowance coverage of net charge-offs
 
1.99

 
2.04

 
0.95

 
102.00

 
 
Ending total loans, gross
 
$
783,306

 
$
23,189,591

 
$
1,049,007

 
$
3,884

 
 
Average loans in repayment(1)
 
$
631,029

 
$
15,605,927

 
$
1,138,887

 
$
786

 
 
Ending loans in repayment(1)
 
$
617,646

 
$
16,787,670

 
$
1,049,007

 
$
3,884

 
 

____________
(1) 
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.

 
 
Allowance for Loan Losses
 
 
Year Ended December 31, 2018
 
 
FFELP
Loans
 
Private Education
Loans
 
Personal
Loans
 
Total
Allowance for Loan Losses
 
 
 
 
 
 
 
 
Beginning balance
 
$
1,132

 
$
243,715

 
$
6,628

 
$
251,475

Total provision
 
980

 
169,287

 
74,317

 
244,584

Net charge-offs:
 
 
 
 
 
 
 
 
   Charge-offs
 
(1,135
)
 
(154,701
)
 
(19,690
)
 
(175,526
)
   Recoveries
 
—

 
20,858

 
946

 
21,804

Net charge-offs
 
(1,135
)
 
(133,843
)
 
(18,744
)
 
(153,722
)
Loan sales(1)
 
—

 
(1,216
)
 
—

 
(1,216
)
Ending Balance
 
$
977

 
$
277,943

 
$
62,201

 
$
341,121

Allowance:
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
120,110

 
$
—

 
$
120,110

Ending balance: collectively evaluated for impairment
 
$
977

 
$
157,833

 
$
62,201

 
$
221,011

Loans:
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
1,257,856

 
$
—

 
$
1,257,856

Ending balance: collectively evaluated for impairment
 
$
846,487

 
$
19,246,609

 
$
1,190,091

 
$
21,283,187

Net charge-offs as a percentage of average loans in repayment(2)
 
0.16
%
 
1.01
%
 
2.11
%
 
 
Allowance as a percentage of the ending total loan balance
 
0.12
%
 
1.36
%
 
5.23
%
 
 
Allowance as a percentage of the ending loans in repayment(2)
 
0.15
%
 
1.90
%
 
5.23
%
 
 
Allowance coverage of net charge-offs
 
0.86

 
2.08

 
3.32

 
 
Ending total loans, gross
 
$
846,487

 
$
20,504,465

 
$
1,190,091

 
 
Average loans in repayment(2)
 
$
691,406

 
$
13,303,801

 
$
889,348

 
 
Ending loans in repayment(2)
 
$
665,807

 
$
14,666,856

 
$
1,190,091

 
 

    ____________
(1) 
Represents fair value adjustments on loans sold.
(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.


 
 
 
Allowance for Loan Losses
 
 
Year Ended December 31, 2017
 
 
FFELP
Loans
 
Private Education
Loans
 
Personal
Loans
 
Total
Allowance for Loan Losses
 
 
 
 
 
 
 
 
Beginning balance
 
$
2,171

 
$
182,472

 
$
58

 
$
184,701

Total provision
 
(85
)
 
178,542

 
7,138

 
185,595

Net charge-offs:
 
 
 
 
 
 
 
 
   Charge-offs
 
(954
)
 
(130,063
)
 
(579
)
 
(131,596
)
   Recoveries
 
—

 
17,635

 
11

 
17,646

Net charge-offs
 
(954
)
 
(112,428
)
 
(568
)
 
(113,950
)
Loan sales(1)
 
—

 
(4,871
)
 
—

 
(4,871
)
Ending Balance
 
$
1,132

 
$
243,715

 
$
6,628

 
$
251,475

Allowance:
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
94,682

 
$
—

 
$
94,682

Ending balance: collectively evaluated for impairment
 
$
1,132

 
$
149,033

 
$
6,628

 
$
156,793

Loans:
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
 
$
—

 
$
990,351

 
$
—

 
$
990,351

Ending balance: collectively evaluated for impairment
 
$
927,660

 
$
16,441,816

 
$
400,280

 
$
17,769,756

Net charge-offs as a percentage of average loans in repayment(2)
 
0.13
%
 
1.03
%
 
0.47
%
 
 
Allowance as a percentage of the ending total loan balance
 
0.12
%
 
1.40
%
 
1.66
%
 
 
Allowance as a percentage of the ending loans in repayment(2)
 
0.15
%
 
2.00
%
 
1.66
%
 
 
Allowance coverage of net charge-offs
 
1.19

 
2.17

 
11.67

 
 
Ending total loans, gross
 
$
927,660

 
$
17,432,167

 
$
400,280

 
 
Average loans in repayment(2)
 
$
745,039

 
$
10,881,058

 
$
119,606

 
 
Ending loans in repayment(2)
 
$
746,456

 
$
12,206,033

 
$
400,280

 
 
____________
(1) 
Represents fair value adjustments on loans sold.
(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.



Troubled Debt Restructurings
All of our loans are collectively assessed for impairment, except for loans classified as TDRs (where we conduct individual assessments of impairment). We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations, achieve better student outcomes, and increase the collectability of the loan. These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
When we give a borrower facing financial difficulty an interest rate reduction, we temporarily reduce the contractual interest rate on a loan to 4.0 percent (previously, to 2.0 percent) for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. The combination of these two loan term changes helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate. At December 31, 2019 and 2018, 7.2 percent and 6.4 percent, respectively, of our loans then currently in full principal and interest repayment status were subject to interest rate reductions made under our rate modification program.
Once a loan qualifies for TDR status, it remains a TDR for allowance purposes for the remainder of its life. As of December 31, 2019 and 2018, approximately 50 percent and 57 percent, respectively, of TDRs were classified as such due to their forbearance status. See Note 2, “Significant Accounting Policies — Allowance for Loan Losses” for a more detailed discussion.
Within the Private Education Loan portfolio, loans greater than 90 days past due are nonperforming. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk standpoint at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim.
At December 31, 2019 and 2018, all of our TDR loans had a related allowance recorded. The following table provides the recorded investment, unpaid principal balance and related allowance for our TDR loans.
 
 
Recorded Investment
 
Unpaid Principal Balance
 
Allowance
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
TDR Loans
 
$
1,612,896

 
$
1,581,966

 
$
186,697

 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
TDR Loans
 
$
1,280,713

 
$
1,257,856

 
$
120,110



    
    







The following table provides the average recorded investment and interest income recognized for our TDR loans.

 
 
Years Ended December 31,
 
 
2019
 
2018
 
2017
 
 
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
TDR Loans
 
$
1,434,137

 
$
95,507

 
$
1,141,993

 
$
77,670

 
$
822,145

 
$
61,119



The following table provides information regarding the loan status and aging of TDR loans.

 
 
December 31,
 
December 31,
 
 
2019
 
2018
 
 
Balance
 
%
 
Balance
 
%
TDR loans in in-school/grace/deferment(1)
 
$
87,749

 
 
 
$
69,212

 
 
TDR loans in forbearance(2)
 
99,054

 
 
 
69,796

 
 
TDR loans in repayment(3) and percentage of each status:
 
 
 
 
 
 
 
 
Loans current
 
1,230,954

 
88.2
%
 
994,411

 
88.9
%
Loans delinquent 31-60 days(4)
 
85,555

 
6.1

 
63,074

 
5.6

Loans delinquent 61-90 days(4)
 
49,626

 
3.6

 
36,804

 
3.3

Loans delinquent greater than 90 days(4)
 
29,028

 
2.1

 
24,559

 
2.2

Total TDR loans in repayment
 
1,395,163

 
100.0
%
 
1,118,848

 
100.0
%
Total TDR loans, gross
 
$
1,581,966

 
 
 
$
1,257,856

 
 
_____
(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, consistent with established loan program servicing policies and procedures.
(3) 
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.
(4) 
The period of delinquency is based on the number of days scheduled payments are contractually past due.


    
    
    
The following table provides the amount of modified loans (which includes forbearance and reductions in interest rates) that became TDRs in the periods presented. Additionally, for the periods presented, the table summarizes charge-offs occurring in the TDR portfolio, as well as TDRs for which a payment default occurred in the relevant period presented and within 12 months of the loan first being designated as a TDR. We define payment default as 60 days past due for this disclosure.

 
 
Years Ended December 31,
 
 
2019
 
2018
 
2017
 
 
Modified Loans(1)
 
Charge-offs
 
Payment-Default
 
Modified Loans(1)
 
Charge-offs
 
Payment-Default
 
Modified Loans(1)
 
Charge-offs
 
Payment-Default
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TDR Loans
 
$
515,398

 
$
74,137

 
$
111,810

 
$
394,639

 
$
52,823

 
$
90,231

 
$
498,812

 
$
48,469

 
$
92,532


_______
(1) Represents the principal balance of loans that have been modified during the period and resulted in a TDR.
Private Education Loan Key Credit Quality Indicators
FFELP Loans are at least 97 percent insured and guaranteed as to their principal and accrued interest in the event of default; therefore, there are no key credit quality indicators associated with FFELP Loans.
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 table highlights the gross principal balance of our Private Education Loan portfolio stratified by key credit quality indicators.
 
 
December 31, 2019
 
December 31, 2018
Credit Quality Indicators:
 
Balance(1)
 
% of Balance
 
Balance(1)
 
% of Balance
 
 
 
 
 
 
 
 
 
Cosigners:
 
 
 
 
 
 
 
 
With cosigner
 
$
20,709,636

 
89
%
 
$
18,378,398

 
90
%
Without cosigner
 
2,479,955

 
11

 
2,126,067

 
10

Total
 
$
23,189,591

 
100
%
 
$
20,504,465

 
100
%
 
 
 
 
 
 
 
 
 
FICO at Original Approval(2):
 
 
 
 
 
 
 
 
Less than 670
 
$
1,665,589

 
7
%
 
$
1,409,789

 
7
%
670-699
 
3,570,025

 
16

 
3,106,983

 
15

700-749
 
7,670,748

 
33

 
6,759,721

 
33

Greater than or equal to 750
 
10,283,229

 
44

 
9,227,972

 
45

Total
 
$
23,189,591

 
100
%
 
$
20,504,465

 
100
%
 
 
 
 
 
 
 
 
 
FICO-Refreshed(2)(3):
 
 
 
 
 
 
 
 
Less than 670
 
$
2,979,437

 
13
%
 
$
2,416,979

 
12
%
670-699
 
2,883,122

 
13

 
2,504,467

 
12

700-749
 
6,806,602

 
29

 
6,144,489

 
30

Greater than or equal to 750
 
10,520,430

 
45

 
9,438,530

 
46

Total
 
$
23,189,591

 
100
%
 
$
20,504,465

 
100
%
 
 
 
 
 
 
 
 
 
Seasoning(4):
 
 
 
 
 
 
 
 
1-12 payments
 
$
5,351,702

 
23
%
 
$
4,969,334

 
24
%
13-24 payments
 
4,004,151

 
17

 
3,481,235

 
17

25-36 payments
 
2,902,365

 
12

 
2,741,954

 
13

37-48 payments
 
2,213,944

 
10

 
1,990,049

 
10

More than 48 payments
 
3,030,024

 
13

 
2,061,448

 
10

Not yet in repayment
 
5,687,405

 
25

 
5,260,445

 
26

Total
 
$
23,189,591

 
100
%
 
$
20,504,465

 
100
%

_____
(1) 
Balance represents gross Private Education Loans.
(2) 
Represents the higher credit score of the cosigner or the borrower.
(3) 
Represents the FICO score updated as of the fourth-quarter 2019.
(4) 
Number of months in active repayment (whether interest-only payment, fixed payment, or full principal and interest repayment status) for which a scheduled payment was due.

Personal Loan Key Credit Quality Indicators
For Personal Loans, the key credit quality indicators are FICO scores, loan seasoning, and loan delinquency status. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following table highlights the gross principal balance of our Personal Loan portfolio stratified by key credit quality indicators.

 
 
Personal Loans
 
 
Credit Quality Indicators
 
 
December 31, 2019
 
December 31, 2018
Credit Quality Indicators:
 
Balance(1)
 
% of Balance
 
Balance(1)
 
% of Balance
 
 
 
 
 
 
 
 
 
FICO at Original Approval:
 
 
 
 
 
 
 
 
Less than 670
 
$
47,367

 
4
%
 
$
77,702

 
7
%
670-699
 
259,098

 
25

 
339,053

 
28

700-749
 
521,856

 
50

 
554,700

 
47

Greater than or equal to 750
 
220,686

 
21

 
218,636

 
18

Total
 
$
1,049,007

 
100
%
 
$
1,190,091

 
100
%
 
 
 
 
 
 
 
 
 
Seasoning(2):
 
 
 
 
 
 
 
 
0-12 payments
 
$
469,940

 
45
%
 
$
1,008,758

 
85
%
13-24 payments
 
505,318

 
48

 
181,333

 
15

25-36 payments
 
73,749

 
7

 
—

 
—

37-48 payments
 
—

 
—

 
—

 
—

More than 48 payments
 
—

 
—

 
—

 
—

Total
 
$
1,049,007

 
100
%
 
$
1,190,091

 
100
%
  ___________ 
(1) 
Balance represents gross Personal Loans.
(2) 
Number of months in active repayment for which a scheduled payment was due.



Private Education Loan Delinquencies


The following table provides information regarding the loan status of our Private Education Loans. 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.

 
 
Private Education Loans
 
 
December 31,
 
 
2019
 
2018
 
2017
 
 
Balance
 
%
 
Balance
 
%
 
Balance
 
%
Loans in-school/grace/deferment(1)
 
$
5,687,405

 
 
 
$
5,260,445

 
 
 
$
4,757,732

 
 
Loans in forbearance(2)
 
714,516

 
 
 
577,164

 
 
 
468,402

 
 
Loans in repayment and percentage of each status:
 
 
 
 
 
 
 
 
 
 
 
 
Loans current
 
16,315,651

 
97.2
%
 
14,289,705

 
97.4
%
 
11,911,128

 
97.6
%
Loans delinquent 31-60 days(3)
 
288,051

 
1.7

 
231,216

 
1.6

 
179,002

 
1.5

Loans delinquent 61-90 days(3)
 
121,302

 
0.7

 
95,105

 
0.7

 
78,292

 
0.6

Loans delinquent greater than 90 days(3)
 
62,666

 
0.4

 
50,830

 
0.3

 
37,611

 
0.3

Total Private Education Loans in repayment
 
16,787,670

 
100.0
%
 
14,666,856

 
100.0
%
 
12,206,033

 
100.0
%
Total Private Education Loans, gross
 
23,189,591

 
 
 
20,504,465

 
 
 
17,432,167

 
 
Private Education Loans deferred origination costs and unamortized premium/(discount)
 
81,224

 
 
 
68,321

 
 
 
56,378

 
 
Total Private Education Loans
 
23,270,815

 
 
 
20,572,786

 
 
 
17,488,545

 
 
Private Education Loans allowance for losses
 
(374,300
)
 
 
 
(277,943
)
 
 
 
(243,715
)
 
 
Private Education Loans, net
 
$
22,896,515

 
 
 
$
20,294,843

 
 
 
$
17,244,830

 
 
Percentage of Private Education Loans in repayment
 
 
 
72.4
%
 
 
 
71.5
%
 
 
 
70.0
%
Delinquencies as a percentage of Private Education Loans in repayment
 
 
 
2.8
%
 
 
 
2.6
%
 
 
 
2.4
%
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance
 
 
 
4.1
%
 
 
 
3.8
%
 
 
 
3.7
%
  ___________ 
(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, 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.


Personal Loan Delinquencies

The following table provides information regarding the loan status of our Personal Loans.


 
 
Personal Loans
 
 
December 31,
 
 
2019
 
2018
 
 
Balance
 
%
 
Balance
 
%
Loans in repayment and percentage of each status:
 
 
 
 
 
 
 
 
Loans current
 
$
1,023,517

 
97.6
%
 
$
1,172,776

 
98.5
%
Loans delinquent 31-60 days(1)
 
9,435

 
0.9

 
6,722

 
0.6

Loans delinquent 61-90 days(1)
 
7,172

 
0.7

 
5,416

 
0.5

Loans delinquent greater than 90 days(1)
 
8,883

 
0.8

 
5,177

 
0.4

Total Personal Loans in repayment
 
1,049,007

 
100.0
%
 
1,190,091

 
100.0
%
Total Personal Loans, gross
 
1,049,007

 
 
 
1,190,091

 
 
Personal Loans deferred origination costs and unamortized premium/(discount)
 
513

 
 
 
297

 
 
Total Personal Loans
 
1,049,520

 
 
 
1,190,388

 
 
Personal Loans allowance for losses
 
(65,877
)
 
 
 
(62,201
)
 
 
Personal Loans, net
 
$
983,643

 
 
 
$
1,128,187

 
 
Delinquencies as a percentage of Personal Loans in repayment
 
 
 
2.4
%
 
 
 
1.5
%
_______
(1) 
The period of delinquency is based on the number of days scheduled payments are contractually past due.
 

 
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 greater than 90 days 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 upon separation from school. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due portfolio for all periods presented.
 
 
Private Education Loans
 
 
Accrued Interest Receivable
 
 
Total Interest
Receivable
 
Greater Than
90 Days
Past Due
 
Allowance for
Uncollectible
Interest
 
 
 
 
 
 
 
December 31, 2019
 
$
1,366,158

 
$
2,390

 
$
5,309

December 31, 2018
 
$
1,168,823

 
$
1,920

 
$
6,322