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Loans Held for Investment
 6 Months Ended
Jun. 30, 2024
Receivables [Abstract]  
Loans Held for Investment Loans Held for Investment
Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”).
Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight Financing Rate. As of June 30, 2024 and December 31, 2023, 28 percent and 33 percent, respectively, of all of our Private Education Loans were indexed to SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school.
FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993 and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims.
In the first six months of 2024, we recognized $255 million in gains from the sale of approximately $3.69 billion of Private Education Loans, including $3.42 billion of principal and $274 million in capitalized interest, to unaffiliated third parties. In the first six months of 2023, we recognized $128 million in gains from the sale of approximately $2.10 billion of Private Education Loans, including $1.96 billion of principal and $144 million in capitalized interest, to an unaffiliated third party. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of those VIEs. Those transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of those loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings - Unconsolidated VIEs” in this Form 10-Q.
Loans held for investment are summarized as follows:
June 30,December 31,
(Dollars in thousands)20242023
Private Education Loans:
Fixed-rate$14,124,662 $13,985,791 
Variable-rate5,494,869 7,040,053 
Total Private Education Loans, gross19,619,531 21,025,844 
Deferred origination costs and unamortized premium/(discount)78,661 81,554 
Allowance for credit losses(1,265,592)(1,335,105)
Total Private Education Loans, net18,432,600 19,772,293 
FFELP Loans485,608 537,401 
Deferred origination costs and unamortized premium/(discount)1,185 1,330 
Allowance for credit losses(4,060)(4,667)
Total FFELP Loans, net482,733 534,064 
Loans held for investment, net$18,915,333 $20,306,357 
 
The estimated weighted average life of education loans in our portfolio was approximately 5.3 years and 5.0 years at June 30, 2024 and December 31, 2023, respectively.

The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:

20242023
Three Months Ended June 30,
(dollars in thousands)
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$20,480,805 10.91 %$20,704,907 10.79 %
FFELP Loans501,439 7.73 585,131 7.10 
Total portfolio$20,982,244 $21,290,038 

20242023
Six Months Ended June 30,
(dollars in thousands)		Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$20,961,775 10.96 %$21,227,153 10.72 %
FFELP Loans514,225 7.48 593,555 6.98 
Total portfolio$21,476,000 $21,820,708