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Loans Held for Investment
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans Held for Investment Loans Held for Investment
Loans held for investment consist solely of Private Education Loans as of March 31, 2025. 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”). During the third quarter of 2024, we transferred our then-remaining FFELP Loan portfolio to loans held for sale and subsequently sold the FFELP Loan portfolio to an unaffiliated third party during the fourth quarter of 2024.
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. As of March 31, 2025 and December 31, 2024, 22 percent and 23 percent, respectively, of all 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, owners receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993 and before July 1, 2006, owners receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, owners receive 100 percent reimbursement on all qualifying claims.
The following table summarizes our Private Education Loan sales to unaffiliated third parties for the periods presented.
Three Months Ended March 31,
(dollars in millions)		20252024
Loan principal$1,840 $1,952 
Capitalized interest
163 151 
Total Private Education Loans sold$2,003 $2,103 
Gain on sale of loans, net
$188 $143 
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. These 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 these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Note 7, “Borrowings - Unconsolidated Funding Vehicles” in this Form 10-Q.
Loans held for investment are summarized as follows:
March 31,December 31,
(Dollars in thousands)20252024
Loans Held for Investment, net:
Fixed-rate$17,463,708 $17,093,382 
Variable-rate4,968,417 5,141,626 
Total Private Education Loans, gross22,432,125 22,235,008 
Deferred origination costs and unamortized premium/(discount)102,794 103,070 
Allowance for credit losses(1,443,715)(1,435,920)
Loans held for investment, net$21,091,204 $20,902,158 
The estimated weighted average life of education loans in our portfolio was approximately 5.6 years and 5.6 years at March 31, 2025 and December 31, 2024, 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:

20252024
Three Months Ended March 31,
(dollars in thousands)
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$22,916,916 10.59 %$21,442,744 11.01 %
FFELP Loans(1)
— — 527,012 7.24 
Total portfolio$22,916,916 $21,969,756 

(1) FFELP Loans were transferred to loans held for sale during the third quarter of 2024 and subsequently sold to a third-party in the fourth quarter of 2024.
See Note 5, “Loans Held for Investment — Certain Collection Tools — Private Education Loans” in our 2024 Form 10-K for additional information.