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Borrowings
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Borrowings Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securitization (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in our 2023 Form 10-K. The following table summarizes our borrowings at June 30, 2024 and December 31, 2023.

June 30, 2024December 31, 2023
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $993,810 $993,810 $— $992,200 $992,200 
Total unsecured borrowings— 993,810 993,810 — 992,200 992,200 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,691,111 3,691,111 — 3,585,254 3,585,254 
Variable-rate— 718,091 718,091 — 650,058 650,058 
Total Private Education Loan term securitizations— 4,409,202 4,409,202 — 4,235,312 4,235,312 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,409,202 4,409,202 — 4,235,312 4,235,312 
Total$— $5,403,012 $5,403,012 $— $5,227,512 $5,227,512 

Short-term Borrowings
On May 7, 2024 and June 14, 2024, we amended our Secured Borrowing Facility to extend the maturity of the facility. The amount that can be borrowed under the facility is $2 billion. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until June 13, 2025. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on June 13, 2026 (or earlier, if certain material adverse events occur). At both June 30, 2024, and December 31, 2023, there were no secured borrowings outstanding under the Secured Borrowing Facility.

Long-term Borrowings
Secured Financings
2024 Transactions
On May 15, 2024, we executed our $668 million SMB Private Education Loan Trust 2024-C term ABS transaction, which was accounted for as a secured financing. We sold $668 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $668 million of gross proceeds. The Class A and Class B notes had a weighted average life of 5.36 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.19 percent. On June 30, 2024, $727 million of our Private Education Loans, including $670 million of principal and $57 million in capitalized interest, were encumbered because of this transaction.
Secured Financings at Issuance
The following table summarizes our secured financings issued in the year ended December 31, 2023 and in the six months ended June 30, 2024.

IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
(Dollars in thousands)
Private Education Loans:
2023-AMarch 2023$579,000 
SOFR plus 1.53%
5.06
2023-CAugust 2023568,000 
SOFR plus 1.69%
4.93
Total notes issued in 2023$1,147,000 
Total loan and accrued interest amount securitized at inception in 2023(2)
$1,292,507 
2024-CMay 2024$668,000 
SOFR plus 1.19%
5.36
Total notes issued in 2024$668,000 
Total loan and accrued interest amount securitized at inception in 2024(3)
$733,644 

(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.
(2) At June 30, 2024, $1.14 billion of our Private Education Loans, including $1.06 billion of principal and $84 million in capitalized interest, were encumbered related to these transactions.
(3) At June 30, 2024, $727 million of our Private Education Loans, including $670 million of principal and $57 million in capitalized interest, were encumbered related to this transaction.


Consolidated Funding Vehicles

We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.
As of June 30, 2024
(dollars in thousands)
Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,409,202 $4,409,202 $5,724,958 $142,228 $347,389 $6,214,575 
Secured Borrowing Facility— — — — — 2,225 2,225 
Total$— $4,409,202 $4,409,202 $5,724,958 $142,228 $349,614 $6,216,800 

As of December 31, 2023
Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,235,312 $4,235,312 $5,539,964 $149,412 $311,697 $6,001,073 
Secured Borrowing Facility— — — — — 1,066 1,066 
Total$— $4,235,312 $4,235,312 $5,539,964 $149,412 $312,763 $6,002,139 

(1) Other assets primarily represent accrued interest receivable.
Unconsolidated VIEs
Private Education Loan Securitizations
Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own five percent of the securities issued by the trusts to meet risk retention requirements. We were not required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an insignificant amount of the VIE’s expected residual returns.
2024-A Transaction
On March 13, 2024, we closed an SMB Private Education Loan Trust 2024-A term ABS transaction (the “2024-A Transaction”), in which an unaffiliated third party sold to the trust approximately $2.0 billion of Private Education Loans that the third-party seller previously purchased from us on February 1, 2024. Sallie Mae Bank sponsored the 2024-A Transaction, is the servicer and administrator, and was the seller of an additional $105 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2024-A Transaction and we recorded a $7 million gain on sale associated with this transaction. In connection with the 2024-A Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2024-A Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings.
2024-R1 Transaction
On April 9, 2024, we closed an SMB Private Education Loan Trust 2024-R1 term ABS transaction (the “2024-R1 Transaction”), in which an unaffiliated third party sold to the trust approximately $69 million of Private Education Loans residual flows from our 2020-PTA and 2020-PTB transactions through a re-securitization. Sallie Mae Bank sponsored the 2024-R1 Transaction and is the administrator of the trust. In connection with the 2024-R1 Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2024-R1 Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings.
2024-B Transaction
On April 11, 2024, we closed an SMB Private Education Loan Trust 2024-B term ABS transaction (the “2024-B Transaction”), in which unaffiliated third parties sold to the trust approximately $191 million of Private Education Loans that the third-party sellers previously purchased from us in 2020 and 2021. Sallie Mae Bank sponsored the 2024-B Transaction, is the servicer and administrator, and was the seller of an additional $10 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2024-B Transaction and we recorded a less than $1 million gain on sale associated with this transaction. In connection with the 2024-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2024-B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings.
2024-D Transaction
On June 28, 2024, we closed an SMB Private Education Loan Trust 2024-D term ABS transaction (the “2024-D Transaction”), in which an unaffiliated third party sold to the trust approximately $1.5 billion of Private Education Loans that the third-party seller previously purchased from us on May 23, 2024. Sallie Mae Bank sponsored the 2024-D Transaction, is the servicer and administrator, and was the seller of an additional $79 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2024-D Transaction and we recorded a $6 million gain on sale associated with this transaction. In connection with the 2024-D Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to
the 2024-D Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings.
The table below provides a summary of our exposure related to our unconsolidated VIEs.

June 30, 2024
December 31, 2023
(Dollars in thousands)
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$602,539 $60,473 $663,012 $423,327 $54,481 $477,808 

(1) Vertical risk retention interest classified as available-for-sale investment.
(2) Vertical risk retention interest classified as trading investment.


Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks which totaled $125 million at June 30, 2024. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing and is payable daily. We did not utilize these lines of credit in the six months ended June 30, 2024 nor in the year ended December 31, 2023.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At June 30, 2024 and December 31, 2023, the value of our pledged collateral at the FRB totaled $1.2 billion and $1.6 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the six months ended June 30, 2024 nor in the year ended December 31, 2023.