Unfunded Loan Commitments (Tables)

6 Months Ended

Jun. 30, 2023

Credit Loss [Abstract]

Schedule of Allowance for Credit Losses and Recorded Investments in Loans

Allowance for Credit Losses Metrics

Three Months Ended June 30, 2023 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	3,927		$	1,475,379		$	—		$	1,479,306
Transfer from unfunded commitment liability(1)	—			28,188			—			28,188
Provisions:
Provision for current period	820			96,102			(730)			96,192
Loan sale reduction to provision	—			(136,531)			—			(136,531)
Total provisions(2)	820			(40,429)			(730)			(40,339)
Net charge-offs:
Charge-offs	(325)			(114,550)			741			(114,134)
Recoveries	—			11,706			(11)			11,695
Net charge-offs	(325)			(102,844)			730			(102,439)
Ending Balance	$	4,422		$	1,360,294		$	—		$	1,364,716
Allowance(3):
Ending balance: collectively evaluated for impairment	$	4,422		$	1,360,294		$	—		$	1,364,716
Loans(3):
Ending balance: collectively evaluated for impairment	$	573,597		$	19,938,363		$	—		$	20,511,960
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,136,973		$	—		$	1,136,973
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.29		%	2.69		%	—		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.77		%	6.45		%	—		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	1.02		%	9.03		%	—		%
Allowance coverage of net charge-offs (annualized)	3.40			3.31			—
Ending total loans, gross	$	573,597		$	19,938,363		$	—
Average loans in repayment(4)	$	441,749		$	15,269,101		$	—
Ending loans in repayment(4)	$	431,543		$	14,652,527		$	—
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	408,923		$	—

(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, 2023 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(40,429)
Provisions for unfunded loan commitments	58,068
Total Private Education Loan provisions for credit losses	17,639
Other impacts to the provisions for credit losses:
FFELP Loans	820
Credit Cards	(730)
Total	90
Provisions for credit losses reported in consolidated statements of income	$	17,729

(3) For the three months ended June 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment.

(4) 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).

(5) Accrued interest to be capitalized on Private Education Loans only.

(6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).

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(3):
Ending balance: collectively evaluated for impairment	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Loans(3):
Ending balance: collectively evaluated for impairment	$	665,666		$	19,519,185		$	28,900		$	20,213,751
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,029,381		$	—		$	1,029,381
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.10		%	2.56		%	5.33		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.59		%	5.23		%	8.28		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	0.73		%	7.22		%	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(4)	$	537,449		$	14,901,040		$	28,243
Ending loans in repayment(4)	$	538,081		$	14,525,259		$	28,900
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	359,343		$	—

(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, 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) For the three months ended June 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment.

(4) 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).

(5) Accrued interest to be capitalized on Private Education Loans only.

(6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).

Six Months Ended June 30, 2023 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for Credit Losses
Beginning balance	$	3,444		$	1,353,631		$	1,357,075
Transfer from unfunded commitment liability(1)	—			176,701			176,701
Provisions:
Provision for current period	1,559			152,436			153,995
Loan sale reduction to provision	—			(136,531)			(136,531)
Total provisions(2)	1,559			15,905			17,464
Net charge-offs:
Charge-offs	(581)			(209,635)			(210,216)
Recoveries	—			23,692			23,692
Net charge-offs	(581)			(185,943)			(186,524)
Ending Balance	$	4,422		$	1,360,294		$	1,364,716
Allowance(3):
Ending balance: collectively evaluated for impairment	$	4,422		$	1,360,294		$	1,364,716
Loans(3):
Ending balance: collectively evaluated for impairment	$	573,597		$	19,938,363		$	20,511,960
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,136,973		$	1,136,973
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.26		%	2.41		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.77		%	6.45		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	1.02		%	9.03		%
Allowance coverage of net charge-offs (annualized)	3.81			3.66
Ending total loans, gross	$	573,597		$	19,938,363
Average loans in repayment(4)	$	446,655		$	15,448,931
Ending loans in repayment(4)	$	431,543		$	14,652,527
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	408,923

(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
Six Months Ended June 30, 2023 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	15,905
Provisions for unfunded loan commitments	114,377
Total Private Education Loan provisions for credit losses	130,282
Other impacts to the provisions for credit losses:
FFELP Loans	1,559
Total	1,559
Provisions for credit losses reported in consolidated statements of income	$	131,841

(3) For the six months ended June 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment.

(4) 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).

(5) Accrued interest to be capitalized on Private Education Loans only.

(6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).

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(3):
Ending balance: collectively evaluated for impairment	$	3,929		$	1,074,744		$	2,393		$	1,081,066
Loans(3):
Ending balance: collectively evaluated for impairment	$	665,666		$	19,519,185		$	28,900		$	20,213,751
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,029,381		$	—		$	1,029,381
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.08		%	2.23		%	3.54		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.59		%	5.23		%	8.28		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	0.73		%	7.22		%	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(4)	$	541,133		$	15,366,023		$	27,375
Ending loans in repayment(4)	$	538,081		$	14,525,259		$	28,900
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	359,343		$	—

(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
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

(3) For the six months ended June 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment.

(4) 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).

(5) Accrued interest to be capitalized on Private Education Loans only.

(6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).

The tables below summarize the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance.

	2023				2022
Three Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	32,720	$	684,353	$	32,707	$	561,748
Provision/New commitments - net(1)	52,446		1,529,368		99,692		1,466,865
Other provision items	5,622		—		21,654		—
Transfer - funded loans(2)	(28,188)		(650,865)		(40,528)		(614,773)
Ending Balance	$	62,600	$	1,562,856	$	113,525	$	1,413,840
	2023				2022
Six Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	124,924	$	1,995,808	$	72,713	$	1,776,976
Provision/New commitments - net(1)	104,698		2,654,184		147,146		2,435,695
Other provision items	9,679		—		28,880		—
Transfer - funded loans(2)	(176,701)		(3,087,136)		(135,214)		(2,798,831)
Ending Balance	$	62,600	$	1,562,856	$	113,525	$	1,413,840

(1)     Net of expirations of commitments unused.

(2)     When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses.