Unfunded Loan Commitments (Tables)

6 Months Ended

Jun. 30, 2024

Credit Loss [Abstract]

Schedule of Allowance for Credit Losses and Recorded Investments in Loans

Allowance for Credit Losses Metrics

Three Months Ended June 30, 2024 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for Credit Losses
Beginning balance	$	4,627		$	1,345,431		$	1,350,058
Transfer from unfunded commitment liability(1)	—			29,715			29,715
Provisions:
Provision for current period	(441)			72,862			72,421
Loan sale reduction to provision	—			(102,751)			(102,751)
Total provisions(2)	(441)			(29,889)			(30,330)
Net charge-offs:
Charge-offs	(126)			(91,042)			(91,168)
Recoveries	—			11,377			11,377
Net charge-offs	(126)			(79,665)			(79,791)
Ending Balance	$	4,060		$	1,265,592		$	1,269,652
Allowance(3):
Ending balance: collectively evaluated for impairment	$	4,060		$	1,265,592		$	1,269,652
Loans(3):
Ending balance: collectively evaluated for impairment	$	485,608		$	19,619,531		$	20,105,139
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,231,754		$	1,231,754
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.13		%	2.19		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.84		%	6.07		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	1.10		%	8.62		%
Allowance coverage of net charge-offs (annualized)	8.06			3.97
Ending total loans, gross	$	485,608		$	19,619,531
Average loans in repayment(4)	$	378,667		$	14,543,669
Ending loans in repayment(4)	$	369,681		$	14,231,581
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	453,150

(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q 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, 2024 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(29,889)
Provisions for unfunded loan commitments	47,160
Total Private Education Loan provisions for credit losses	17,271
Other impacts to the provisions for credit losses:
FFELP Loans	(441)
Total	(441)
Provisions for credit losses reported in consolidated statements of income	$	16,830

(3) For the three months ended June 30, 2024, 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, 2023 (dollars in thousands)	FFELP  Loans			Private  Education Loans			Credit Cards(7)			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 5, “Unfunded Loan Commitments,” in this Form 10-Q 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).

(7) We use “Credit Cards” to refer to the suite of Credit Card loans that we previously held; we sold the Credit Card portfolio to a third party in May 2023.l

Six Months Ended June 30, 2024 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for Credit Losses
Beginning balance	$	4,667		$	1,335,105		$	1,339,772
Transfer from unfunded commitment liability(1)	—			161,329			161,329
Provisions:
Provision for current period	(358)			167,338			166,980
Loan sale reduction to provision	—			(235,955)			(235,955)
Total provisions(2)	(358)			(68,617)			(68,975)
Net charge-offs:
Charge-offs	(249)			(184,916)			(185,165)
Recoveries	—			22,691			22,691
Net charge-offs	(249)			(162,225)			(162,474)
Ending Balance	$	4,060		$	1,265,592		$	1,269,652
Allowance(3):
Ending balance: collectively evaluated for impairment	$	4,060		$	1,265,592		$	1,269,652
Loans(3):
Ending balance: collectively evaluated for impairment	$	485,608		$	19,619,531		$	20,105,139
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment	$	—		$	1,231,754		$	1,231,754
Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.13		%	2.17		%
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5)	0.84		%	6.07		%
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5)	1.10		%	8.62		%
Allowance coverage of net charge-offs (annualized)	8.15			3.90
Ending total loans, gross	$	485,608		$	19,619,531
Average loans in repayment(4)	$	388,510		$	14,977,567
Ending loans in repayment(4)	$	369,681		$	14,231,581
Accrued interest to be capitalized on loans in repayment(6)	$	—		$	453,150

(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q 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, 2024 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(68,617)
Provisions for unfunded loan commitments	97,846
Total Private Education Loan provisions for credit losses	29,229
Other impacts to the provisions for credit losses:
FFELP Loans	(358)
Total	(358)
Provisions for credit losses reported in consolidated statements of income	$	28,871

(3) For the six months ended June 30, 2024, 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 5, “Unfunded Loan Commitments,” in this Form 10-Q 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).

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.

	2024				2023
Three Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	32,034	$	673,492	$	32,720	$	684,353
Provision/New commitments - net(1)	47,160		1,317,770		58,068		1,529,368
Transfer - funded loans(2)	(29,715)		(690,869)		(28,188)		(650,865)
Ending Balance	$	49,479	$	1,300,393	$	62,600	$	1,562,856

	2024				2023
Six Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	112,962	$	2,221,077	$	124,924	$	1,995,808
Provision/New commitments - net(1)	97,846		2,352,228		114,377		2,654,184
Transfer - funded loans(2)	(161,329)		(3,272,912)		(176,701)		(3,087,136)
Ending Balance	$	49,479	$	1,300,393	$	62,600	$	1,562,856

(1)     Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to provision for existing commitments.

(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.