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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2022

Allowance for Credit Losses 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 - 2021 and 2020 — Allowance for Private Education Loan Losses - 2021 and 2020, — Allowance for FFELP Loan Losses - 2021 and 2020, and — Allowance for Credit Card Loans - 2021 and 2020” in our 2021 Form 10-K for a more detailed discussion.

Allowance for Credit Losses Metrics


Three Months Ended June 30, 2022 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	3,999		$	1,221,053		$	2,310		$	1,227,362
Transfer from unfunded commitment liability(1)	—			40,528			—			40,528
Provisions:
Provision for current period	60			24,531			459			25,050
Loan sale reduction to provision	—			(115,852)			—			(115,852)

Total provisions(2)	60			(91,321)			459			(90,802)
Net charge-offs:
Charge-offs	(130)			(106,493)			(376)			(106,999)
Recoveries	—			10,977			—			10,977
Net charge-offs	(130)			(95,516)			(376)			(96,022)

Ending Balance	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Loans:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	665,666		$	19,519,185		$	28,900		$	20,213,751
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.10		%	2.56		%	5.33		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.51		%	8.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.73		%	7.40		%	8.28		%
Allowance coverage of net charge-offs (annualized)	7.56			2.81			1.59
Ending total loans, gross	$	665,666		$	19,519,185		$	28,900
Average loans in repayment(3)	$	537,449		$	14,901,040		$	28,243
Ending loans in repayment(3)	$	538,081		$	14,525,259		$	28,900

(1) See Note 5, “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, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(91,321)
Provisions for unfunded loan commitments	121,347
Total Private Education Loan provisions for credit losses	30,026
Other impacts to the provisions for credit losses:
FFELP Loans	60
Credit Cards	459
Total	519
Provisions for credit losses reported in consolidated statements of income	$	30,545

(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).


Three Months Ended June 30, 2021 (dollars in thousands)	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 5, “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
Three Months Ended June 30, 2021 (dollars in thousands)
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


Six Months Ended June 30, 2022 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,077		$	1,158,977		$	2,281		$	1,165,335
Transfer from unfunded commitment liability(1)	—			135,214			—			135,214
Provisions:
Provision for current period	81			72,991			596			73,668
Loan sale reduction to provision	—			(121,099)			—			(121,099)

Total provisions(2)	81			(48,108)			596			(47,431)
Net charge-offs:
Charge-offs	(229)			(190,349)			(487)			(191,065)
Recoveries	—			19,010			3			19,013
Net charge-offs	(229)			(171,339)			(484)			(172,052)

Ending Balance	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Loans:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	665,666		$	19,519,185		$	28,900		$	20,213,751
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.08		%	2.23		%	3.54		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.51		%	8.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.73		%	7.40		%	8.28		%
Allowance coverage of net charge-offs (annualized)	8.58			3.14			2.47
Ending total loans, gross	$	665,666		$	19,519,185		$	28,900
Average loans in repayment(3)	$	541,133		$	15,366,023		$	27,375
Ending loans in repayment(3)	$	538,081		$	14,525,259		$	28,900

(1) See Note 5, “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, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(48,108)
Provisions for unfunded loan commitments	176,026
Total Private Education Loan provisions for credit losses	127,918
Other impacts to the provisions for credit losses:
FFELP Loans	81
Credit Cards	596
Total	677
Provisions for credit losses reported in consolidated statements of income	$	128,595


Six Months Ended June 30, 2021 (dollars in thousands)	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)
Loans transferred 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 5, “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 (dollars in thousands)
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 - 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 the allowance for credit losses and the associated weightings for each of these inputs. At June 30, 2021, December 31, 2021, and June 30, 2022, 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 six months ended June 30, 2022 increased by $285 million compared with the year-ago period. During the six months ended June 30, 2022, the provision for credit losses was primarily affected by new loan commitments made during the period and additional management overlays, which were partially offset by negative provisions recorded related to $2.24 billion in Private Education Loans sold, improved economic forecasts, and faster prepayment rates. During the first six months of 2021, the provision for credit losses was primarily affected by improvements in the economic forecasts and faster prepayment speeds. In addition, 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 reflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model in the first quarter of 2021. 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.

As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of these metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans and of ending loans in repayment; and delinquency and forbearance percentages.

Charge-offs increased in both the three and six months ended June 30, 2022 compared to the respective year-ago periods because of the credit administration practices changes we implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance. Also contributing to the increase were elevated losses on loans whose borrowers took a “gap year” during the pandemic and entered full principal and interest repayment status starting in late 2021, and the overall strain on our collections team arising from increased collections activity and staffing shortages driven by tight labor markets. The increased charge-offs caused the allowance coverage of net charge-offs (annualized) ratio to decline for the three and six months ended June 30, 2022 compared with the respective year-ago periods.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur.

We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and 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 (currently 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.

Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as 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.

For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Credit Losses - 2021 and 2020,” and Note 7, “Allowance for Credit Losses” in our 2021 Form 10-K.

Under our current forbearance practices, temporary forbearance of payments is generally granted in one-to-two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). See Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in our 2021 Form 10-K. In the first quarter of 2022, we adopted ASU No. 2022-02 (see Note 1, “Significant Accounting Policies” in this Form 10-Q). Under this new amendment, if the debt has been previously restructured, an entity must consider the cumulative effect of past restructurings made within the 12-month period before the current restructuring when determining whether a delay in payment resulting from the current restructuring is insignificant. Due to our current forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of forbearances will exceed the significance threshold and, therefore, we do not consider the forbearances as loan modifications.

The limitations on granting of forbearances described above apply to hardship forbearances. We offer other administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are either required by law (such as by the Servicemembers Civil Relief Act) or are considered separate from our active loss mitigation programs and therefore are not considered to be loan modifications requiring disclosure under ASU No. 2022-02. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. For purposes of this disclosure, we do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.

The following table shows the amortized cost basis at the end of the reporting period of the loans to borrowers experiencing financial difficulty that were modified during the period from January 1, 2022 (the effective date of our adoption of ASU No. 2022-02) through the end of the reporting period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended June 30, 2022 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	17,621	0.09	%	$	96,015	0.49	%
Total	$	17,621	0.09	%	$	96,015	0.49	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Six Months Ended June 30, 2022 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	23,117	0.12	%	$	162,049	0.83	%
Total	$	23,117	0.12	%	$	162,049	0.83	%

The following tables describes the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:

Three Months Ended June 30, 2022

Interest Rate Reduction

Combination - Interest Rate
Reduction and Term Extension

Loan Type

Financial Effect

Loan Type

Financial Effect

Private Education Loans

Reduced average contractual rate from 10.38% to 4.00%

Private Education Loans

Added a weighted average 10.34 years to the life of loans

Reduced average contractual rate from 10.04% to 4.00%

Six Months Ended June 30, 2022

Interest Rate Reduction

Combination - Interest Rate
Reduction and Term Extension

Loan Type

Financial Effect

Loan Type

Financial Effect

Private Education Loans

Reduced average contractual rate from 10.36% to 4.00%

Private Education Loans

Added a weighted average 10.42 years to the life of loans

Reduced average contractual rate from 9.80% to 4.00%

When a Private Education Loan reaches 120 days delinquent, the loan is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses - 2021 and 2020 — Allowance for Private Education Loan Losses - 2021 and 2020, — Allowance for FFELP Loan Losses - 2021 and 2020, and — Allowance for Credit Card Loans - 2021 and 2020” in our 2021 Form 10-K for a more detailed discussion.

The following table provides the amount of financing receivables whose borrowers were experiencing financial difficulty and had a payment default and were modified during the period from January 1, 2022 (the effective date of our adoption of ASU No. 2022-02) through the end of the reporting period. We define payment default as 60 days past due for purposes of this disclosure.



	Three Months Ended June 30, 2022				Six Months Ended June 30, 2022
(Dollars in thousands)	Modified Loans(1)(2)		Payment Default		Modified Loans(1)(2)		Payment Default
Loan Type:
Private Education Loans	$	3,512	$	3,450	$	3,963	$	3,901
Total	$	3,512	$	3,450	$	3,963	$	3,901

(1) Represents amortized cost basis of loans that have been modified.

(2) For the three months ended June 30, 2022, the modified loans include $3.3 million of interest rate reduction and term extension loan modifications and $0.2 million of interest rate reduction only loan modifications. For the six months ended June 30, 2022, the modified loans include $3.7 million of interest rate reduction and term extension loan modifications and $0.3 million of interest rate reduction only loan modifications.

We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that have been modified during the period from January 1, 2022 (the effective date of our adoption of ASU No. 2022-02) through the end of the reporting period.


	Payment Status (Amortized Cost Basis)
At June 30, 2022 (dollars in thousands)	Deferment(1)		Current(2)(3)		30-59 Days Past Due(2)(3)		60-89 Days Past Due(2)(3)		90 Days or Greater Past Due(2)(3)
Loan Type:
Private Education Loans	$	1,694	$	173,288	$	5,542	$	3,138	$	1,504
Total	$	1,694	$	173,288	$	5,542	$	3,138	$	1,504

(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).

(2) Loans in repayment include loans on which borrowers are making full principal and interest payments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).

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

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 (held for investment), by year of origination, stratified by key credit quality indicators.


As of June 30, 2022 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination	2022(1)		2021(1)		2020(1)		2019(1)		2018(1)		2017 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	1,036,651	$	4,200,604	$	2,677,507	$	2,150,355	$	1,603,266	$	5,343,522	$	17,011,905	87	%
Without cosigner	243,101		654,257		443,183		363,135		245,089		558,515		2,507,280		13
Total	$	1,279,752	$	4,854,861	$	3,120,690	$	2,513,490	$	1,848,355	$	5,902,037	$	19,519,185	100	%

FICO at Origination(2):
Less than 670	$	94,943	$	321,567	$	186,085	$	201,734	$	160,071	$	499,905	$	1,464,305	8	%
670-699	182,941		644,166		426,415		389,318		295,350		1,008,825		2,947,015		15
700-749	412,341		1,533,720		1,007,488		830,148		614,831		1,985,185		6,383,713		33
Greater than or equal to 750	589,527		2,355,408		1,500,702		1,092,290		778,103		2,408,122		8,724,152		44
Total	$	1,279,752	$	4,854,861	$	3,120,690	$	2,513,490	$	1,848,355	$	5,902,037	$	19,519,185	100	%


FICO Refreshed(2)(3):
Less than 670	$	122,222	$	459,158	$	261,366	$	257,888	$	219,132	$	858,301	$	2,178,067	11	%
670-699	183,128		620,098		340,183		276,534		198,033		646,324		2,264,300		12
700-749	403,721		1,483,958		923,047		736,502		527,323		1,615,314		5,689,865		29
Greater than or equal to 750	570,681		2,291,647		1,596,094		1,242,566		903,867		2,782,098		9,386,953		48
Total	$	1,279,752	$	4,854,861	$	3,120,690	$	2,513,490	$	1,848,355	$	5,902,037	$	19,519,185	100	%

Seasoning(4):
1-12 payments	$	685,445	$	2,532,502	$	391,306	$	378,038	$	284,209	$	617,732	$	4,889,232	25	%
13-24 payments	—		434,578		1,564,224		179,111		163,997		550,106		2,892,016		15
25-36 payments	—		—		286,503		1,234,821		144,585		555,690		2,221,599		11
37-48 payments	—		—		—		163,552		836,832		533,301		1,533,685		8
More than 48 payments	—		—		—		—		102,734		3,069,896		3,172,630		16
Not yet in repayment	594,307		1,887,781		878,657		557,968		315,998		575,312		4,810,023		25
Total	$	1,279,752	$	4,854,861	$	3,120,690	$	2,513,490	$	1,848,355	$	5,902,037	$	19,519,185	100	%

2022 Current period(5) gross charge-offs	$	(79)	$	(6,193)	$	(20,703)	$	(28,869)	$	(27,542)	$	(106,963)	$	(190,349)
2022 Current period(5) recoveries	—		448		1,765		2,630		2,501		11,666		19,010
2022 Current period(5) net charge-offs	$	(79)	$	(5,745)	$	(18,938)	$	(26,239)	$	(25,041)	$	(95,297)	$	(171,339)

Total accrued interest by origination vintage	$	28,511	$	238,678	$	235,273	$	234,761	$	163,681	$	271,006	$	1,171,910
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the second-quarter 2022. (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, 2022 through June 30, 2022.


As of December 31, 2021 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination	2021(1)		2020(1)		2019(1)		2018(1)		2017(1)		2016 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	3,263,892	$	3,604,553	$	2,778,262	$	2,025,463	$	1,765,719	$	4,753,775	$	18,191,664	88	%
Without cosigner	558,469		561,730		438,263		294,597		212,514		459,626		2,525,199		12
Total	$	3,822,361	$	4,166,283	$	3,216,525	$	2,320,060	$	1,978,233	$	5,213,401	$	20,716,863	100	%

FICO at Origination(2):
Less than 670	$	248,368	$	238,005	$	251,157	$	193,123	$	166,048	$	428,416	$	1,525,117	7	%
670-699	508,264		564,497		493,237		363,313		329,807		884,981		3,144,099		15
700-749	1,210,833		1,348,269		1,057,001		770,452		660,270		1,753,709		6,800,534		33
Greater than or equal to 750	1,854,896		2,015,512		1,415,130		993,172		822,108		2,146,295		9,247,113		45
Total	$	3,822,361	$	4,166,283	$	3,216,525	$	2,320,060	$	1,978,233	$	5,213,401	$	20,716,863	100	%


FICO Refreshed(2)(3):
Less than 670	$	326,613	$	279,578	$	273,652	$	235,684	$	233,022	$	739,268	$	2,087,817	10	%
670-699	506,021		475,674		365,133		256,400		209,536		570,605		2,383,369		12
700-749	1,209,493		1,285,015		978,763		682,024		568,766		1,448,692		6,172,753		30
Greater than or equal to 750	1,780,234		2,126,016		1,598,977		1,145,952		966,909		2,454,836		10,072,924		48
Total	$	3,822,361	$	4,166,283	$	3,216,525	$	2,320,060	$	1,978,233	$	5,213,401	$	20,716,863	100	%

Seasoning(4):
1-12 payments	$	2,265,811	$	594,850	$	515,328	$	385,246	$	340,242	$	501,269	$	4,602,746	22	%
13-24 payments	—		2,287,737		362,674		203,674		211,064		479,540		3,544,689		17
25-36 payments	—		173		1,565,203		312,049		164,575		482,369		2,524,369		12
37-48 payments	—		—		—		983,434		295,206		464,563		1,743,203		8
More than 48 payments	—		—		—		—		671,138		2,726,304		3,397,442		16
Not yet in repayment	1,556,550		1,283,523		773,320		435,657		296,008		559,356		4,904,414		25
Total	$	3,822,361	$	4,166,283	$	3,216,525	$	2,320,060	$	1,978,233	$	5,213,401	$	20,716,863	100	%

2021 Current period(5) gross charge-offs	$	(1,183)	$	(8,604)	$	(23,866)	$	(32,741)	$	(37,186)	$	(126,011)	$	(229,591)
2021 Current period(5) recoveries	35		540		2,092		3,693		4,450		18,684		29,494
2021 Current period(5) net charge-offs	$	(1,148)	$	(8,064)	$	(21,774)	$	(29,048)	$	(32,736)	$	(107,327)	$	(200,097)

Total accrued interest by origination vintage	$	109,233	$	247,418	$	270,242	$	198,816	$	131,685	$	229,729	$	1,187,123

(1)Balance represents gross Private Education Loans held for investment.

(2)Represents the higher credit score of the cosigner or the borrower.

(3)Represents the FICO score updated as of the fourth-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 January 1, 2021 through December 31, 2021.

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).


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of June 30, 2022 (dollars in thousands)	2022			2021			2020			2019			2018			2017 and Prior			Total

Loans in-school/grace/deferment(1)	$	594,307		$	1,887,781		$	878,657		$	557,968		$	315,998		$	575,312		$	4,810,023
Loans in forbearance(2)	1,512			15,624			20,945			22,188			23,314			100,320			183,903
Loans in repayment:
Loans current	679,111			2,917,375			2,167,862			1,864,069			1,440,757			4,911,636			13,980,810
Loans delinquent 30-59 days(3)	3,513			21,115			25,780			31,433			30,911			142,525			255,277
Loans delinquent 60-89 days(3)	761			8,512			15,626			21,292			22,816			100,649			169,656
Loans 90 days or greater past due(3)	548			4,454			11,820			16,540			14,559			71,595			119,516
Total Private Education Loans in repayment	683,933			2,951,456			2,221,088			1,933,334			1,509,043			5,226,405			14,525,259
Total Private Education Loans, gross	1,279,752			4,854,861			3,120,690			2,513,490			1,848,355			5,902,037			19,519,185
Private Education Loans deferred origination costs and unamortized premium/(discount)	14,647			18,565			11,502			6,923			4,421			10,751			66,809
Total Private Education Loans	1,294,399			4,873,426			3,132,192			2,520,413			1,852,776			5,912,788			19,585,994
Private Education Loans allowance for losses	(118,056)			(287,653)			(168,698)			(144,986)			(95,567)			(259,784)			(1,074,744)
Private Education Loans, net	$	1,176,343		$	4,585,773		$	2,963,494		$	2,375,427		$	1,757,209		$	5,653,004		$	18,511,250

Percentage of Private Education Loans in repayment	53.4		%	60.8		%	71.2		%	76.9		%	81.6		%	88.6		%	74.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.7		%	1.2		%	2.4		%	3.6		%	4.5		%	6.0		%	3.7		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.2		%	0.5		%	0.9		%	1.1		%	1.5		%	1.9		%	1.3		%

(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.


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2021 (dollars in thousands)	2021			2020			2019			2018			2017			2016 and Prior			Total

Loans in-school/grace/deferment(1)	$	1,556,550		$	1,283,523		$	773,320		$	435,657		$	296,008		$	559,356		$	4,904,414
Loans in forbearance(2)	11,951			55,844			52,364			43,613			41,355			96,110			301,237
Loans in repayment:
Loans current	2,234,876			2,786,646			2,321,728			1,772,651			1,570,815			4,319,057			15,005,773
Loans delinquent 30-59 days(3)	15,148			29,146			46,616			43,197			41,695			132,757			308,559
Loans delinquent 60-89 days(3)	3,194			7,441			14,044			14,310			16,425			61,533			116,947
Loans 90 days or greater past due(3)	642			3,683			8,453			10,632			11,935			44,588			79,933
Total Private Education Loans in repayment	2,253,860			2,826,916			2,390,841			1,840,790			1,640,870			4,557,935			15,511,212
Total Private Education Loans, gross	3,822,361			4,166,283			3,216,525			2,320,060			1,978,233			5,213,401			20,716,863
Private Education Loans deferred origination costs and unamortized premium/(discount)	22,169			16,067			9,575			5,918			4,588			9,171			67,488
Total Private Education Loans	3,844,530			4,182,350			3,226,100			2,325,978			1,982,821			5,222,572			20,784,351
Private Education Loans allowance for losses	(248,102)			(239,507)			(195,223)			(129,678)			(99,982)			(246,485)			(1,158,977)
Private Education Loans, net	$	3,596,428		$	3,942,843		$	3,030,877		$	2,196,300		$	1,882,839		$	4,976,087		$	19,625,374

Percentage of Private Education Loans in repayment	59.0		%	67.9		%	74.3		%	79.3		%	82.9		%	87.4		%	74.9		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.8		%	1.4		%	2.9		%	3.7		%	4.3		%	5.2		%	3.3		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.5		%	1.9		%	2.1		%	2.3		%	2.5		%	2.1		%	1.9		%

(3)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 90 days or greater 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.


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest

June 30, 2022	$	1,171,910	$	5,433	$	7,344
December 31, 2021	$	1,187,123	$	3,635	$	4,937