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Allowance for Credit Losses

9 Months Ended

Sep. 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 September 30, 2022 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Transfer from unfunded commitment liability(1)	—			168,377			—			168,377
Provisions:
Provision for current period	29			95,482			2,039			97,550
Loan sale reduction to provision	—			(50,226)			—			(50,226)
Loans transferred to held-for-sale	—			—			(2,372)			(2,372)
Total provisions(2)	29			45,256			(333)			44,952
Net charge-offs:
Charge-offs	(147)			(109,350)			(2,062)			(111,559)
Recoveries	—			11,400			2			11,402
Net charge-offs	(147)			(97,950)			(2,060)			(100,157)

Ending Balance	$	3,811		$	1,190,427		$	—		$	1,194,238
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	3,811		$	1,190,427		$	—		$	1,194,238
Loans:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	643,614		$	20,104,463		$	—		$	20,748,077
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.11		%	2.67		%	—		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.92		%	—		%
Allowance as a percentage of the ending loans in repayment(3)	0.78		%	8.18		%	—		%
Allowance coverage of net charge-offs (annualized)	6.48			3.04			—
Ending total loans, gross	$	643,614		$	20,104,463		$	—
Average loans in repayment(3)	$	518,226		$	14,674,437		$	—
Ending loans in repayment(3)	$	489,920		$	14,546,556		$	—

(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 September 30, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	45,256
Provisions for unfunded loan commitments	162,646
Total Private Education Loan provisions for credit losses	207,902
Other impacts to the provisions for credit losses:
FFELP Loans	29
Credit Cards	(333)
Total	(304)
Provisions for credit losses reported in consolidated statements of income	$	207,598

(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 September 30, 2021 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Transfer from unfunded commitment liability(1)	—			110,613			—			110,613
Provisions:
Provision for current period	50			(6,995)			415			(6,530)
Loan sale reduction to provision	—			—			—			—

Total provisions(2)	50			(6,995)			415			(6,530)
Net charge-offs:
Charge-offs	(106)			(56,000)			(119)			(56,225)
Recoveries	—			7,302			3			7,305
Net charge-offs	(106)			(48,698)			(116)			(48,920)

Ending Balance	$	4,206		$	1,209,460		$	1,741		$	1,215,407
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	69,626		$	—		$	69,626
Ending balance: collectively evaluated for impairment	$	4,206		$	1,139,834		$	1,741		$	1,145,781
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,148,282		$	—		$	1,148,282
Ending balance: collectively evaluated for impairment	$	705,691		$	20,554,555		$	17,766		$	21,278,012
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.08		%	1.29		%	3.07		%
Allowance as a percentage of the ending total loan balance	0.60		%	5.57		%	9.80		%
Allowance as a percentage of the ending loans in repayment(3)	0.79		%	7.81		%	9.80		%
Allowance coverage of net charge-offs (annualized)	9.92			6.21			3.75
Ending total loans, gross	$	705,691		$	21,702,837		$	17,766
Average loans in repayment(3)	$	540,018		$	15,108,802		$	15,098
Ending loans in repayment(3)	$	530,476		$	15,490,132		$	17,766

(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
Three Months Ended September 30, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(6,995)
Provisions for unfunded loan commitments	144,972
Total Private Education Loan provisions for credit losses	137,977
Other impacts to the provisions for credit losses:
FFELP Loans	50
Credit Cards	415
Total	465
Provisions for credit losses reported in consolidated statements of income	$	138,442


Nine Months Ended September 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)	—			303,591			—			303,591
Provisions:
Provision for current period	110			168,473			2,635			171,218
Loan sale reduction to provision	—			(171,325)			—			(171,325)
Loans transferred to held-for-sale	—			—			(2,372)			(2,372)
Total provisions(2)	110			(2,852)			263			(2,479)
Net charge-offs:
Charge-offs	(376)			(299,699)			(2,549)			(302,624)
Recoveries	—			30,410			5			30,415
Net charge-offs	(376)			(269,289)			(2,544)			(272,209)

Ending Balance	$	3,811		$	1,190,427		$	—		$	1,194,238
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	3,811		$	1,190,427		$	—		$	1,194,238
Loans:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	643,614		$	20,104,463		$	—		$	20,748,077
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.09		%	2.37		%	—		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.92		%	—		%
Allowance as a percentage of the ending loans in repayment(4)	0.78		%	8.18		%	—		%
Allowance coverage of net charge-offs (annualized)	7.60			3.32			—
Ending total loans, gross	$	643,614		$	20,104,463		$	—
Average loans in repayment(3)	$	532,275		$	15,173,465		$	—
Ending loans in repayment(3)	$	489,920		$	14,546,556		$	—

(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
Nine Months Ended September 30, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(2,852)
Provisions for unfunded loan commitments	338,672
Total Private Education Loan provisions for credit losses	335,820
Other impacts to the provisions for credit losses:
FFELP Loans	110
Credit Cards	263
Total	373
Provisions for credit losses reported in consolidated statements of income	$	336,193


Nine Months Ended September 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)	—			262,049			—			262,049
Provisions:
Provision for current period	77			(260,923)			511			(260,335)
Loan sale reduction to provision	—			(10,335)			—			(10,335)
Loans transferred from held-for-sale	—			1,887			—			1,887
Total provisions(2)	77			(269,371)			511			(268,783)
Net charge-offs:
Charge-offs	(249)			(161,039)			(281)			(161,569)
Recoveries	—			21,977			10			21,987
Net charge-offs	(249)			(139,062)			(271)			(139,582)

Ending Balance	$	4,206		$	1,209,460		$	1,741		$	1,215,407
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	69,626		$	—		$	69,626
Ending balance: collectively evaluated for impairment	$	4,206		$	1,139,834		$	1,741		$	1,145,781
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,148,282		$	—		$	1,148,282
Ending balance: collectively evaluated for impairment	$	705,691		$	20,554,555		$	17,766		$	21,278,012
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.06		%	1.25		%	2.75		%
Allowance as a percentage of the ending total loan balance	0.60		%	5.57		%	9.80		%
Allowance as a percentage of the ending loans in repayment(3)	0.79		%	7.81		%	9.80		%
Allowance coverage of net charge-offs (annualized)	12.67			6.52			4.82
Ending total loans, gross	$	705,691		$	21,702,837		$	17,766
Average loans in repayment(3)	$	547,394		$	14,877,937		$	13,136
Ending loans in repayment(3)	$	530,476		$	15,490,132		$	17,766

(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
Nine Months Ended September 30, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(269,371)
Provisions for unfunded loan commitments	251,135
Total Private Education Loan provisions for credit losses	(18,236)
Other impacts to the provisions for credit losses:
FFELP Loans	77
Credit Cards	511
Total	588
Provisions for credit losses reported in consolidated statements of income	$	(17,648)

Allowance for Credit Losses - Forecast Assumptions

In determining the adequacy of the allowance for credit losses, we include forecasts of, among other macroeconomic inputs, college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for all macroeconomic 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 September 30, 2021, December 31, 2021, and September 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 nine months ended September 30, 2022 increased by $354 million compared with the year-ago period. During the nine months ended September 30, 2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by a negative provision recorded related to $3.29 billion in Private Education Loans sold in 2022. During the first nine 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 nine months ended September 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 nine months ended September 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 September 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	$	9,750	0.05	%	$	79,765	0.40	%
Total	$	9,750	0.05	%	$	79,765	0.40	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Nine Months Ended September 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	$	25,065	0.12	%	$	237,588	1.18	%
Total	$	25,065	0.12	%	$	237,588	1.18	%

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

Three Months Ended September 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 11.31% to 4.00%

Private Education Loans

Added a weighted average 10.24 years to the life of loans

Reduced average contractual rate from 10.87% to 4.00%

Nine Months Ended September 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 10.76% to 4.00%

Private Education Loans

Added a weighted average 10.38 years to the life of loans

Reduced average contractual rate from 10.17% 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 September 30, 2022				Nine Months Ended September 30, 2022
(Dollars in thousands)	Modified Loans(1)(2)		Payment Default		Modified Loans(1)(2)		Payment Default
Loan Type:
Private Education Loans	$	9,467	$	9,289	$	12,660	$	12,463
Total	$	9,467	$	9,289	$	12,660	$	12,463

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

(2) For the three months ended September 30, 2022, the modified loans include $8.5 million of interest rate reduction and term extension loan modifications and $1.0 million of interest rate reduction only loan modifications. For the nine months ended September 30, 2022, the modified loans include $11.4 million of interest rate reduction and term extension loan modifications and $1.2 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 September 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	$	5,575	$	236,477	$	10,335	$	5,835	$	4,431
Total	$	5,575	$	236,477	$	10,335	$	5,835	$	4,431

(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 September 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	$	3,047,398	$	3,994,466	$	2,273,147	$	1,903,962	$	1,443,011	$	4,871,685	$	17,533,669	87	%
Without cosigner	491,319		618,831		392,461		333,419		224,139		510,625		2,570,794		13
Total	$	3,538,717	$	4,613,297	$	2,665,608	$	2,237,381	$	1,667,150	$	5,382,310	$	20,104,463	100	%

FICO at Origination(2):
Less than 670	$	271,510	$	308,184	$	161,273	$	180,403	$	146,085	$	460,074	$	1,527,529	8	%
670-699	490,170		615,019		364,369		348,359		266,501		922,131		3,006,549		15
700-749	1,106,786		1,457,396		859,924		739,722		554,847		1,813,627		6,532,302		32
Greater than or equal to 750	1,670,251		2,232,698		1,280,042		968,897		699,717		2,186,478		9,038,083		45
Total	$	3,538,717	$	4,613,297	$	2,665,608	$	2,237,381	$	1,667,150	$	5,382,310	$	20,104,463	100	%


FICO Refreshed(2)(3):
Less than 670	$	330,446	$	431,998	$	233,480	$	239,180	$	206,833	$	811,604	$	2,253,541	11	%
670-699	494,948		594,535		292,414		246,158		179,979		589,077		2,397,111		12
700-749	1,092,230		1,402,767		778,630		649,713		466,824		1,458,193		5,848,357		29
Greater than or equal to 750	1,621,093		2,183,997		1,361,084		1,102,330		813,514		2,523,436		9,605,454		48
Total	$	3,538,717	$	4,613,297	$	2,665,608	$	2,237,381	$	1,667,150	$	5,382,310	$	20,104,463	100	%

Seasoning(4):
1-12 payments	$	1,961,724	$	1,921,089	$	323,754	$	305,985	$	224,662	$	482,794	$	5,220,008	26	%
13-24 payments	—		946,963		1,028,413		169,959		156,320		489,470		2,791,125		14
25-36 payments	—		—		583,318		909,963		130,692		508,953		2,132,926		11
37-48 payments	—		—		42		362,762		639,349		483,212		1,485,365		7
More than 48 payments	—		—		—		—		231,269		2,886,910		3,118,179		16
Not yet in repayment	1,576,993		1,745,245		730,081		488,712		284,858		530,971		5,356,860		26
Total	$	3,538,717	$	4,613,297	$	2,665,608	$	2,237,381	$	1,667,150	$	5,382,310	$	20,104,463	100	%

2022 Current period(5) gross charge-offs	$	(696)	$	(13,397)	$	(33,009)	$	(44,122)	$	(42,589)	$	(165,886)	$	(299,699)
2022 Current period(5) recoveries	40		928		2,901		4,092		4,049		18,400		30,410
2022 Current period(5) net charge-offs	$	(656)	$	(12,469)	$	(30,108)	$	(40,030)	$	(38,540)	$	(147,486)	$	(269,289)

Total accrued interest by origination vintage	$	72,446	$	292,512	$	222,265	$	217,871	$	149,759	$	246,305	$	1,201,158
(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 third-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 September 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 September 30, 2022 (dollars in thousands)	2022			2021			2020			2019			2018			2017 and Prior			Total

Loans in-school/grace/deferment(1)	$	1,576,993		$	1,745,245		$	730,081		$	488,712		$	284,858		$	530,971		$	5,356,860
Loans in forbearance(2)	4,034			19,309			21,994			24,534			24,589			106,587			201,047
Loans in repayment:
Loans current	1,950,830			2,802,675			1,854,054			1,654,125			1,293,502			4,447,769			14,002,955
Loans delinquent 30-59 days(3)	4,690			25,836			28,361			32,374			28,952			135,028			255,241
Loans delinquent 60-89 days(3)	1,542			13,268			17,592			19,004			18,721			81,685			151,812
Loans 90 days or greater past due(3)	628			6,964			13,526			18,632			16,528			80,270			136,548
Total Private Education Loans in repayment	1,957,690			2,848,743			1,913,533			1,724,135			1,357,703			4,744,752			14,546,556
Total Private Education Loans, gross	3,538,717			4,613,297			2,665,608			2,237,381			1,667,150			5,382,310			20,104,463
Private Education Loans deferred origination costs and unamortized premium/(discount)	20,938			16,761			9,719			5,935			3,867			9,596			66,816
Total Private Education Loans	3,559,655			4,630,058			2,675,327			2,243,316			1,671,017			5,391,906			20,171,279
Private Education Loans allowance for losses	(260,520)			(296,638)			(153,743)			(135,939)			(91,886)			(251,701)			(1,190,427)
Private Education Loans, net	$	3,299,135		$	4,333,420		$	2,521,584		$	2,107,377		$	1,579,131		$	5,140,205		$	18,980,852

Percentage of Private Education Loans in repayment	55.3		%	61.8		%	71.8		%	77.1		%	81.4		%	88.2		%	72.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.4		%	1.6		%	3.1		%	4.1		%	4.7		%	6.3		%	3.7		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.2		%	0.7		%	1.1		%	1.4		%	1.8		%	2.2		%	1.4		%

(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

September 30, 2022	$	1,201,159	$	6,515	$	7,783
December 31, 2021	$	1,187,123	$	3,635	$	4,937