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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2021

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 portfolios. 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 losses expected to be incurred in the loan portfolios. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses 2020 — Allowance for Private Education Loan Losses, — Allowance for FFELP Loan Losses, and — Allowance for Credit Card Loans” in our 2020 Form 10-K for a more detailed discussion.

Allowance for Credit Losses Metrics


	Allowance for Credit Losses
	Three Months Ended June 30, 2021
	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,318		$	1,173,375		$	1,328		$	1,179,021
Transfer from unfunded commitment liability(1)	—			24,556			—			24,556
Provisions:
Provision for current period	(2)			1,014			182			1,194
Loan sale reduction to provision	—			(1,477)			—			(1,477)

Total provisions(2)	(2)			(463)			182			(283)
Net charge-offs:
Charge-offs	(54)			(49,900)			(74)			(50,028)
Recoveries	—			6,972			6			6,978
Net charge-offs	(54)			(42,928)			(68)			(43,050)

Ending Balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	80,495		$	—		$	80,495
Ending balance: collectively evaluated for impairment	$	4,262		$	1,074,045		$	1,442		$	1,079,749
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,192,743		$	—		$	1,192,743
Ending balance: collectively evaluated for impairment	$	716,958		$	19,285,014		$	12,784		$	20,014,756
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.04		%	1.16		%	2.29		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.64		%	11.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.78		%	7.79		%	11.28		%
Allowance coverage of net charge-offs (annualized)	19.73			6.72			5.30
Ending total loans, gross	$	716,958		$	20,477,757		$	12,784
Average loans in repayment(3)	$	546,306		$	14,743,360		$	11,855
Ending loans in repayment(3)	$	548,488		$	14,825,375		$	12,784

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2) Below is a reconciliation of the provision for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended June 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(463)
Provisions for unfunded loan commitments	69,960
Total Private Education Loan provisions for credit losses	69,497

Other impacts to the provisions for credit losses:
FFELP Loans	(2)
Credit Cards	182
Total	180
Provisions for credit losses reported in consolidated statements of income	$	69,677

(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.


	Allowance for Credit Losses
	Three Months Ended June 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,296		$	1,515,781		$	152,673		$	574		$	1,673,324


Transfer from unfunded commitment liability(1)	—			37,010			—			—			37,010
Provisions:
Provision for current period	173			234,015			23,929			509			258,626
Loan sale reduction to provision	—			—			—			—			—

Total provisions(2)	173			234,015			23,929			509			258,626
Net charge-offs:
Charge-offs	(84)			(31,779)			(14,601)			(41)			(46,505)
Recoveries	—			5,532			1,336			—			6,868
Net charge-offs	(84)			(26,247)			(13,265)			(41)			(39,637)

Ending Balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	160,234		$	—		$	—		$	160,234
Ending balance: collectively evaluated for impairment	$	4,385		$	1,600,325		$	163,337		$	1,042		$	1,769,089
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,520,240		$	—		$	—		$	1,520,240
Ending balance: collectively evaluated for impairment	$	754,340		$	19,965,225		$	772,086		$	10,706		$	21,502,357
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.07		%	0.75		%	6.87		%	1.77		%
Allowance as a percentage of the ending total loan balance	0.58		%	8.19		%	21.16		%	9.73		%
Allowance as a percentage of the ending loans in repayment(3)	0.97		%	12.13		%	22.46		%	9.73		%
Allowance coverage of net charge-offs (annualized)	13.05			16.77			3.08			6.35
Ending total loans, gross	$	754,340		$	21,485,465		$	772,086		$	10,706
Average loans in repayment(3)	$	513,418		$	14,011,841		$	772,137		$	9,265
Ending loans in repayment(3)	$	452,617		$	14,512,723		$	727,214		$	10,706

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2)Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. 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. When the loan is funded, we transfer that liability to the allowance for credit losses.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended June 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	234,015
Provisions for unfunded loan commitments	93,261
Total Private Education Loan provisions for credit losses	327,276

Other impacts to the provisions for credit losses:
Personal Loans	23,929
FFELP Loans	173
Credit Cards	509
Total	24,611
Provisions for credit losses reported in consolidated statements of income	$	351,887


	Allowance for Credit Losses
	Six Months Ended June 30, 2021
	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,378		$	1,355,844		$	1,501		$	1,361,723
Transfer from unfunded commitment liability(1)	—			151,436			—			151,436
Provisions:
Provision for current period	27			(253,928)			96			(253,805)
Loan sale reduction to provision	—			(10,335)			—			(10,335)
Loan transfer from held-for-sale	—			1,887			—			1,887
Total provisions(2)	27			(262,376)			96			(262,253)
Net charge-offs:
Charge-offs	(143)			(105,039)			(162)			(105,344)
Recoveries	—			14,675			7			14,682
Net charge-offs	(143)			(90,364)			(155)			(90,662)

Ending Balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	80,495		$	—		$	80,495
Ending balance: collectively evaluated for impairment	$	4,262		$	1,074,045		$	1,442		$	1,079,749
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,192,743		$	—		$	1,192,743
Ending balance: collectively evaluated for impairment	$	716,958		$	19,285,014		$	12,784		$	20,014,756
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.05		%	1.23		%	2.59		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.64		%	11.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.78		%	7.79		%	11.28		%
Allowance coverage of net charge-offs (annualized)	14.90			6.39			4.65
Ending total loans, gross	$	716,958		$	20,477,757		$	12,784
Average loans in repayment(3)	$	551,765		$	14,738,505		$	11,964
Ending loans in repayment(3)	$	548,488		$	14,825,375		$	12,784

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Six Months Ended June 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(262,376)
Provisions for unfunded loan commitments	106,163
Total Private Education Loan provisions for credit losses	(156,213)

Other impacts to the provisions for credit losses:
FFELP Loans	27
Credit Cards	96
Total	123
Provisions for credit losses reported in consolidated statements of income	$	(156,090)


	Allowance for Credit Losses
	Six Months Ended June 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	1,633		$	374,300		$	65,877		$	102		$	441,912
Day 1 adjustment for the adoption of CECL	2,852			1,060,830			79,183			188			1,143,053
Balance at January 1, 2020	4,485			1,435,130			145,060			290			1,584,965
Transfer from unfunded commitment liability(1)	—			179,085			—			—			179,085
Provisions:
Provision for current period	210			377,877			49,247			800			428,134
Loan sale reduction to provision	—			(161,793)			—			—			(161,793)

Total provisions(2)	210			216,084			49,247			800			266,341
Net charge-offs:
Charge-offs	(310)			(83,248)			(33,848)			(48)			(117,454)
Recoveries	—			13,508			2,878			—			16,386
Net charge-offs	(310)			(69,740)			(30,970)			(48)			(101,068)

Ending Balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	160,234		$	—		$	—		$	160,234
Ending balance: collectively evaluated for impairment	$	4,385		$	1,600,325		$	163,337		$	1,042		$	1,769,089
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,520,240		$	—		$	—		$	1,520,240
Ending balance: collectively evaluated for impairment	$	754,340		$	19,965,225		$	772,086		$	10,706		$	21,502,357
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.11		%	0.91		%	7.13		%	1.31		%
Allowance as a percentage of the ending total loan balance	0.58		%	8.19		%	21.16		%	9.73		%
Allowance as a percentage of the ending loans in repayment(3)	0.97		%	12.13		%	22.46		%	9.73		%
Allowance coverage of net charge-offs (annualized)	7.07			12.62			2.64			10.85
Ending total loans, gross	$	754,340		$	21,485,465		$	772,086		$	10,706
Average loans in repayment(3)	$	553,402		$	15,306,349		$	869,133		$	7,326
Ending loans in repayment(3)	$	452,617		$	14,512,723		$	727,214		$	10,706

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Six Months Ended June 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	216,084
Provisions for unfunded loan commitments	146,804
Total Private Education Loan provisions for credit losses	362,888

Other impacts to the provisions for credit losses:
Personal Loans	49,247
FFELP Loans	210
Credit Cards	800
Total	50,257
Provisions for credit losses reported in consolidated statements of income	$	413,145

Allowance for Credit Losses - Forecast Assumptions

In determining the adequacy of the allowance for credit losses, we include forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for these two inputs from Moody’s Analytics. Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurring. We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs. At both January 1, 2020 (the initial adoption date of the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or “CECL”), and June 30, 2021, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent and 30 percent, respectively. Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.

Provisions for credit losses in the first six months of 2021 decreased by $569 million compared with the year-ago period. During the first six months of 2021, the provision for credit losses was primarily affected by improvements in the economic forecasts, faster prepayment speeds and a change in the economic scenarios used and their respective weightings, as compared to the year-ago period. In the second quarter of 2020, as a result of an increase in COVID-19 infections in the second half of June 2020, we switched to using Moody’s Analytics Base and S-4 downturn scenarios, weighted 50 percent each, in determining the allowance for credit losses. We estimated that the worsening economic environment caused by the COVID-19 pandemic in 2020 increased the provisions for credit losses in the first half of 2020 by $397 million. These factors were offset by additional provisions from the new loan commitments made during the first half of 2021.

During the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans. These faster estimated prepayment speeds during the two-year reasonable and supportable period reflect the significant improvement in economic forecasts, as well as the implementation of an updated prepayment speed model. To address this fundamental change, we increased our long-term expectations of prepayment speeds. We experienced higher prepayments during the COVID-19 pandemic, when unemployment rates were elevated, than we would have expected based upon our experience during past financial crises.

Troubled Debt Restructurings (“TDRs”)

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 loans. 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 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 June 30, 2021 and June 30, 2020, 9.0 percent and 8.9 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 both June 30, 2021 and December 31, 2020, approximately 47 percent of TDRs were classified as such due to their forbearance status. For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Loan Losses 2020,” and Note 7, “Allowance for Credit Losses” in our 2020 Form 10-K.

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 perspective 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 June 30, 2021 and December 31, 2020, 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

June 30, 2021
TDR Loans	$	1,230,794	$	1,192,743	$	80,495

December 31, 2020
TDR Loans	$	1,312,805	$	1,274,590	$	104,265

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


	Three Months Ended June 30,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized

TDR Loans	$	1,251,248	$	21,490	$	1,556,278	$	24,071

	Six Months Ended June 30,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized

TDR Loans	$	1,270,668	$	42,979	$	1,591,081	$	50,559

The following table provides information regarding the loan status and aging of TDR loans. For the periods presented below, we updated our delinquency bucket periods to conform with the delinquency bucket periods defined by the Federal Financial Institutions Examination Council (“FFIEC”).


	June 30,				December 31,
	2021				2020
	Balance		%		Balance		%
TDR loans in in-school/grace/deferment(1)	$	86,667			$	88,750
TDR loans in forbearance(2)	58,441				76,704
TDR loans in repayment(3) and percentage of each status:
Loans current	959,797		91.6	%	971,880		87.7	%
Loans delinquent 30-59 days(4)	38,500		3.7		59,249		5.3
Loans delinquent 60-89 days(4)	26,365		2.5		43,576		3.9
Loans 90 days or greater past due(4)	22,973		2.2		34,431		3.1
Total TDR loans in repayment(3)	1,047,635		100.0	%	1,109,136		100.0	%
Total TDR loans, gross	$	1,192,743			$	1,274,590

_____

(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 (but, for purposes of the table, do not include those loans while they are in forbearance).

(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 include 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.


	Three Months Ended June 30,
	2021						2020
	Modified Loans(1)		Charge-offs		Payment- Default		Modified Loans(1)		Charge-offs		Payment- Default

TDR Loans	$	1,917	$	15,888	$	1,560	$	36,666	$	8,623	$	17,910

	Six Months Ended June 30,
	2021						2020
	Modified Loans(1)		Charge-offs		Payment- Default		Modified Loans(1)		Charge-offs		Payment- Default

TDR Loans	$	5,634	$	33,836	$	7,746	$	169,481	$	27,998	$	49,002

_____

(1)Represents the principal balance of loans that have been modified during the period and resulted in a TDR.

Private Education Loans Held for Investment - Key Credit Quality Indicators

FFELP Loans are at least 97 percent 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 tables highlight the gross principal balance of our Private Education Loan portfolio, by year of origination, stratified by key credit quality indicators.


	Private Education Loans Held for Investment - Credit Quality Indicators
	June 30, 2021
Year of Origination	2021(1)		2020(1)		2019(1)		2018(1)		2017(1)		2016 and Prior(1)		Total(1)		% of Balance

Cosigners:
With cosigner	$	970,402	$	3,931,236	$	3,237,783	$	2,340,257	$	2,043,013	$	5,496,367	$	18,019,058	88	%
Without cosigner	211,824		618,647		505,024		341,619		247,444		534,141		2,458,699		12
Total	$	1,182,226	$	4,549,883	$	3,742,807	$	2,681,876	$	2,290,457	$	6,030,508	$	20,477,757	100	%

FICO at Origination(2):
Less than 670	$	72,850	$	253,187	$	280,455	$	213,139	$	183,920	$	483,561	$	1,487,112	7	%
670-699	160,561		605,523		563,313		410,869		374,958		1,011,060		3,126,284		15
700-749	382,823		1,466,071		1,225,698		887,632		766,167		2,029,007		6,757,398		33
Greater than or equal to 750	565,992		2,225,102		1,673,341		1,170,236		965,412		2,506,880		9,106,963		45
Total	$	1,182,226	$	4,549,883	$	3,742,807	$	2,681,876	$	2,290,457	$	6,030,508	$	20,477,757	100	%


FICO Refreshed(2)(3):
Less than 670	$	85,949	$	274,820	$	285,457	$	254,743	$	253,135	$	832,185	$	1,986,289	10	%
670-699	155,903		520,662		426,727		294,368		246,577		659,428		2,303,665		11
700-749	386,736		1,431,445		1,154,717		787,467		656,960		1,652,346		6,069,671		30
Greater than or equal to 750	553,638		2,322,956		1,875,906		1,345,298		1,133,785		2,886,549		10,118,132		49
Total	$	1,182,226	$	4,549,883	$	3,742,807	$	2,681,876	$	2,290,457	$	6,030,508	$	20,477,757	100	%

Seasoning(4):
1-12 payments	$	667,707	$	2,362,092	$	438,639	$	393,882	$	377,838	$	667,673	$	4,907,831	24	%
13-24 payments	—		460,402		1,879,307		223,055		219,685		572,401		3,354,850		16
25-36 payments	—		—		260,827		1,254,251		207,771		555,597		2,278,446		11
37-48 payments	—		—		—		169,088		933,712		553,180		1,655,980		8
More than 48 payments	—		—		—		—		112,835		2,968,608		3,081,443		15
Not yet in repayment	514,519		1,727,389		1,164,034		641,600		438,616		713,049		5,199,207		26
Total	$	1,182,226	$	4,549,883	$	3,742,807	$	2,681,876	$	2,290,457	$	6,030,508	$	20,477,757	100	%

2021 Current period(5) gross charge-offs	$	(105)	$	(2,381)	$	(9,337)	$	(15,085)	$	(16,485)	$	(61,646)	$	(105,039)
2021 Current period(5) recoveries	—		124		850		1,722		2,109		9,870		14,675
2021 Current period(5) net charge-offs	$	(105)	$	(2,257)	$	(8,487)	$	(13,363)	$	(14,376)	$	(51,776)	$	(90,364)

Total accrued interest by origination vintage	$	23,950	$	200,985	$	312,566	$	258,207	$	197,977	$	311,955	$	1,305,640
______ (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 second-quarter 2021. (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, 2021 through June 30, 2021.


	Private Education Loans Held for Investment - Credit Quality Indicators
	December 31, 2020
Year of Origination	2020(1)		2019(1)		2018(1)		2017(1)		2016(1)		2015 and Prior(1)		Total(1)		% of Balance

Cosigners:
With cosigner	$	2,915,328	$	3,467,219	$	2,556,400	$	2,262,635	$	1,977,952	$	4,198,748	$	17,378,282	88	%
Without cosigner	527,437		559,629		384,111		277,159		211,270		391,449		2,351,055		12
Total	$	3,442,765	$	4,026,848	$	2,940,511	$	2,539,794	$	2,189,222	$	4,590,197	$	19,729,337	100	%

FICO at Origination(2):
Less than 670	$	195,214	$	290,711	$	225,276	$	197,948	$	162,413	$	369,609	$	1,441,171	7	%
670-699	464,785		594,950		441,357		407,394		351,303		771,477		3,031,266		16
700-749	1,111,373		1,310,390		967,802		846,983		740,028		1,533,517		6,510,093		33
Greater than or equal to 750	1,671,393		1,830,797		1,306,076		1,087,469		935,478		1,915,594		8,746,807		44
Total	$	3,442,765	$	4,026,848	$	2,940,511	$	2,539,794	$	2,189,222	$	4,590,197	$	19,729,337	100	%


FICO Refreshed(2)(3):
Less than 670	$	240,154	$	331,229	$	301,784	$	298,195	$	293,077	$	734,599	$	2,199,038	11	%
670-699	438,665		493,135		336,966		283,906		231,759		504,779		2,289,210		12
700-749	1,102,666		1,248,806		871,677		734,222		603,160		1,220,468		5,780,999		29
Greater than or equal to 750	1,661,280		1,953,678		1,430,084		1,223,471		1,061,226		2,130,351		9,460,090		48
Total	$	3,442,765	$	4,026,848	$	2,940,511	$	2,539,794	$	2,189,222	$	4,590,197	$	19,729,337	100	%

Seasoning(4):
1-12 payments	$	2,068,517	$	600,038	$	469,143	$	472,258	$	381,197	$	507,343	$	4,498,496	23	%
13-24 payments	163		2,096,635		383,977		223,332		217,379		425,345		3,346,831		17
25-36 payments	—		—		1,353,567		370,250		181,940		439,337		2,345,094		12
37-48 payments	—		—		—		965,476		351,433		402,552		1,719,461		9
More than 48 payments	—		—		—		—		729,510		2,310,905		3,040,415		15
Not yet in repayment	1,374,085		1,330,175		733,824		508,478		327,763		504,715		4,779,040		24
Total	$	3,442,765	$	4,026,848	$	2,940,511	$	2,539,794	$	2,189,222	$	4,590,197	$	19,729,337	100	%

2020 gross charge-offs(5)	$	(1,087)	$	(10,940)	$	(27,000)	$	(35,851)	$	(36,416)	$	(94,032)	$	(205,326)
2020 recoveries(5)	42		636		2,274		3,585		4,284		13,200		24,021
2020 net charge-offs(5)	$	(1,045)	$	(10,304)	$	(24,726)	$	(32,266)	$	(32,132)	$	(80,832)	$	(181,305)

Total accrued interest by origination vintage	$	90,438	$	265,688	$	252,251	$	209,178	$	141,094	$	210,247	$	1,168,896

______

(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 2020.

(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)For period from January 1, 2020 through December 31, 2020.

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. 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 those loans while they are in forbearance). For the periods presented below, we updated our delinquency bucket periods to conform with the delinquency bucket periods defined by the FFIEC.


	Private Education Loans Held for Investment Delinquencies by Origination Vintage
	June 30, 2021
	2021			2020			2019			2018			2017			2016 and Prior			Total

Loans in-school/grace/deferment(1)(2)	$	514,519		$	1,727,389		$	1,164,034		$	641,600		$	438,616		$	713,049		$	5,199,207
Loans in forbearance(1)(3)	1,394			21,742			68,121			71,584			78,989			211,345			453,175
Loans in repayment(1):
Loans current	664,057			2,787,235			2,478,940			1,927,727			1,724,384			4,932,316			14,514,659
Loans delinquent 30-59 days(4)	1,690			9,085			18,709			22,127			25,059			85,868			162,538
Loans delinquent 60-89 days(4)	390			3,380			8,479			10,918			13,229			49,055			85,451
Loans 90 days or greater past due(4)	176			1,052			4,524			7,920			10,180			38,875			62,727
Total Private Education Loans in repayment	666,313			2,800,752			2,510,652			1,968,692			1,772,852			5,106,114			14,825,375
Total Private Education Loans, gross	1,182,226			4,549,883			3,742,807			2,681,876			2,290,457			6,030,508			20,477,757
Private Education Loans deferred origination costs and unamortized premium/(discount)	10,603			18,946			12,100			7,405			5,693			11,125			65,872
Total Private Education Loans	1,192,829			4,568,829			3,754,907			2,689,281			2,296,150			6,041,633			20,543,629
Private Education Loans allowance for losses	(80,501)			(253,285)			(227,307)			(155,165)			(126,301)			(311,981)			(1,154,540)
Private Education Loans, net	$	1,112,328		$	4,315,544		$	3,527,600		$	2,534,116		$	2,169,849		$	5,729,652		$	19,389,089

Percentage of Private Education Loans in repayment	56.4		%	61.6		%	67.1		%	73.4		%	77.4		%	84.7		%	72.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.3		%	0.5		%	1.3		%	2.1		%	2.7		%	3.4		%	2.1		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.2		%	0.8		%	2.6		%	3.5		%	4.3		%	4.0		%	3.0		%

_______

(1)For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At June 30, 2021, the loans in the “in-school/grace/deferment” category above include $249 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At June 30, 2021, the loans in the “in forbearance” category above include $23 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At June 30, 2021, the loans in the “in repayment” category above include $479 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period.

(2)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).

(3)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.

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


	Private Education Loans Held for Investment Delinquencies by Origination Vintage
	December 31, 2020
	2020			2019			2018			2017			2016			2015 and Prior			Total

Loans in-school/grace/deferment(1)(2)	$	1,374,085		$	1,330,175		$	733,824		$	508,478		$	327,763		$	504,715		$	4,779,040
Loans in forbearance(1)(3)	16,159			92,677			110,319			118,946			109,073			198,302			645,476
Loans in repayment(1):
Loans current	2,043,033			2,573,228			2,045,012			1,850,539			1,685,572			3,701,564			13,898,948
Loans delinquent 30-59 days(4)	6,400			16,983			26,934			30,771			33,040			91,400			205,528
Loans delinquent 60-89 days(4)	2,628			9,143			15,026			18,121			19,064			55,661			119,643
Loans 90 days or greater past due(4)	460			4,642			9,396			12,939			14,710			38,555			80,702
Total Private Education Loans in repayment	2,052,521			2,603,996			2,096,368			1,912,370			1,752,386			3,887,180			14,304,821
Total Private Education Loans, gross	3,442,765			4,026,848			2,940,511			2,539,794			2,189,222			4,590,197			19,729,337
Private Education Loans deferred origination costs and unamortized premium/(discount)	21,129			13,933			8,671			6,708			5,721			7,313			63,475
Total Private Education Loans	3,463,894			4,040,781			2,949,182			2,546,502			2,194,943			4,597,510			19,792,812
Private Education Loans allowance for losses	(210,875)			(298,776)			(218,136)			(184,265)			(150,150)			(293,642)			(1,355,844)
Private Education Loans, net	$	3,253,019		$	3,742,005		$	2,731,046		$	2,362,237		$	2,044,793		$	4,303,868		$	18,436,968

Percentage of Private Education Loans in repayment	59.6		%	64.7		%	71.3		%	75.3		%	80.0		%	84.7		%	72.5		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.5		%	1.2		%	2.4 %			3.2 %			3.8		%	4.8		%	2.8		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.8		%	3.4		%	5.0		%	5.9		%	5.9		%	4.9		%	4.3		%

_______

(1)For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At December 31, 2020, the loans in the “in-school/grace/deferment” category above include $401 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At December 31, 2020, the loans in the “in forbearance” category above include $30 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At December 31, 2020, the loans in the “in repayment” category above include $609 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period.

(4)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 on loans making full interest payments. 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 this portion of interest is included in our loan loss reserve. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due Private Education Loan portfolio for all periods presented.


	Private Education Loans
	Accrued Interest Receivable
	Total Interest Receivable		90 Days and Greater Past Due		Allowance for Uncollectible Interest

June 30, 2021	$	1,305,640	$	3,469	$	4,104
December 31, 2020	$	1,168,895	$	4,354	$	4,467