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Allowance for Credit Losses and Unfunded Loan Commitments

3 Months Ended

Mar. 31, 2025

Allowance for Credit Losses and Unfunded Loan Commitments

Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb lifetime expected credit losses in the held for investment loan portfolio. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for credit losses is appropriate to cover lifetime expected losses to be incurred in the loan portfolio.

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. The allowance is recorded in “Other Liabilities” on the consolidated balance sheet. When the loan is funded, we transfer that liability to the allowance for loan losses.

The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accrued on the loan in that month. The allowance for credit losses considers the collectability of both principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses. See “— Accrued Interest Receivable” in this Note 4 for further discussion.

See Note 2, “Significant Accounting Policies — Allowance for Credit Losses” in our 2024 Form 10-K for a more detailed discussion on our allowance for credit losses accounting policies.

Allowance for Credit Losses Metrics

The following tables provide a summary of the activity in the allowance for loan losses and the allowance for unfunded loan commitments during the three months ended March 31, 2025 and 2024.


Three Months Ended March 31, 2025 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,435,920
Transfer from allowance for unfunded loan commitments	105,134
Provisions:
Provision for current period	95,289
Loan sale reduction to provision	(116,459)

Total provisions(1)	(21,170)
Net charge-offs:
Charge-offs	(86,903)
Recoveries	10,734
Net charge-offs	(76,169)


Allowance for loan losses, ending balance	$	1,443,715
Allowance for unfunded loan commitments, beginning balance(2)	84,568
Provision(1)(3)	44,456
Transfer to allowance for loan losses	(105,134)
Allowance for unfunded loan commitments, ending balance(2)	23,890
Total allowance for credit losses, ending balance	$	1,467,605








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	1.88		%
Allowance for loan losses coverage of net charge-offs (annualized)	4.74
Total Allowance Percentage of Private Education Loan Exposure(5)	5.97		%


Ending total loans, gross	$	22,432,125
Average loans in repayment(4)	$	16,240,511
Ending loans in repayment(4)	$	15,903,797
Unfunded loan commitments	$	584,140
Total accrued interest receivable	$	1,558,465

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “—Unfunded Loan Commitments” in this Note 4 for further discussion.

(3 ) Includes incremental provision for new commitments and changes to provision for existing commitments.

(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 loans in the “loans in forbearance” metric).

(5) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.


Three Months Ended March 31, 2024 (dollars in thousands)	FFELP Loans			Private Education Loans			Total
Allowance for loan losses, beginning balance	$	4,667		$	1,335,105		$	1,339,772
Transfer from allowance for unfunded loan commitments	—			131,614			131,614
Provisions:
Provision for current period	83			94,476			94,559
Loan sale reduction to provision	—			(133,204)			(133,204)

Total provisions(1)	83			(38,728)			(38,645)
Net charge-offs:
Charge-offs	(123)			(93,874)			(93,997)
Recoveries	—			11,314			11,314
Net charge-offs	(123)			(82,560)			(82,683)

Allowance for loan losses, ending balance	$	4,627		$	1,345,431		$	1,350,058
Allowance for unfunded loan commitments, beginning balance(2)	—			112,962			112,962
Provision(1)(3)	—			50,686			50,686
Transfer to allowance for loan losses	—			(131,614)			(131,614)
Allowance for unfunded loan commitments, ending balance(2)	—			32,034			32,034
Total allowance for credit losses, ending balance	$	4,627		$	1,377,465		$	1,382,092








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	0.12		%	2.14		%
Allowance for loan losses coverage of net charge-offs (annualized)	9.40			4.07
Total Allowance Percentage of Private Education Loan Exposure(5)	0.90		%	5.99		%

Ending total loans, gross	$	516,363		$	20,952,346
Average loans in repayment(4)	$	399,680		$	15,407,495
Ending loans in repayment(4)	$	393,820		$	14,961,692
Unfunded loan commitments	$	—		$	673,492
Total accrued interest receivable	$	—		$	1,357,987

(1) See “—Provisions for Credit Losses” below in this Note 4 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(3) Includes incremental provision for new commitments and changes to provision for existing commitments.

Provisions for Credit Losses

Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
Three Months Ended March 31,
(dollars in thousands)	2025		2024
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(21,170)	$	(38,728)
Provisions for unfunded loan commitments	44,456		50,686
Total Private Education Loan provisions for credit losses	23,286		11,958

Total FFELP Loans provisions for credit losses	—		83
Provisions for credit losses reported in consolidated statements of income	$	23,286	$	12,041

Provision for credit losses for the three months ended March 31, 2025 increased by $11 million compared with the year-ago period. During the three months ended March 31, 2025, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in economic outlook, offset by $116 million in negative provisions recorded as a result of the $2.00 billion Private Education Loan sale during the first three months of 2025, and adjustments to the weightings of our economic forecast scenarios. In the year-ago period, the provision for credit losses was primarily affected by $133 million in negative provisions recorded as a result of the $2.10 billion Private Education Loan sale during the first three months of 2024, an improved economic outlook, and changes in management overlays and recovery rates, offset by new loan commitments, net of expired commitments, and increases to the provision as a result of decreases in our estimates of the historical long-term average prepayment speeds used after the two-year reasonable and supportable period.

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made as of the date of a modification.

The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur.

As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of the metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable (which we refer to as the “Total Allowance Percentage of Private Education Loan Exposure”); and delinquency and forbearance percentages.

Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming. With respect to periods prior to the sale of our remaining FFELP Loan portfolio in the fourth quarter of 2024, FFELP Loans were at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we did not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continued to accrue interest on those loans through the date of claim.

For additional information, see Note 1, “Significant Accounting Policies — Allowance for Credit Losses” in this Form 10-Q and Note 6, “Allowance for Credit Losses and Unfunded Loan Commitments” in our 2024 Form 10-K.

Forbearance

Under our current forbearance practices, temporary forbearance of payments is generally granted in one-to-two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). During the first six months following a borrower’s grace period, the borrower may be eligible for extended grace forbearance in one six-month increment (which would also count towards the 12-month forbearance cap). Due to our current forbearance practices, including the limitations on forbearances offered to borrowers,

we do not believe the granting of forbearances will exceed the significance threshold under our accounting policy and, therefore, we do not consider the forbearances as loan modifications for the purposes of the tables below.

For additional information on our forbearance and modification programs, see Note 5, “Loans Held for Investment —Certain Collection Tools — Private Education Loans” in our 2024 Form 10-K. The tables below provide information about modifications to borrowers experiencing financial difficulty.

We offer certain administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are required by law (such as by the Servicemembers Civil Relief Act), are considered separate from our active loss mitigation programs, or do not exceed the significance threshold and therefore are not considered to be loan modifications requiring disclosure. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. We do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The following tables show the amortized cost basis at the end of the respective reporting periods of the loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended March 31, 2025 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	6,768	0.03	%	$	138,507	0.57	%
Total	$	6,768	0.03	%	$	138,507	0.57	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended March 31, 2024 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	4,991	0.02	%	$	252,761	1.13	%
Total	$	4,991	0.02	%	$	252,761	1.13	%

The following tables summarize the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:

Three Months Ended March 31,

2025

2024

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Financial Effect:

Reduced average contractual rate from 13.11% to 4.36%

Added a weighted average 9.35 years to the life of loans

Reduced average contractual rate from 12.10% to 4.01%

Reduced average contractual rate from 13.15% to 3.94%

Added a weighted average 8.59 years to the life of loans

Reduced average contractual rate from 12.57% to 3.71%

Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses” and “Significant Accounting Policies — Allowance for Credit Losses — Allowance for FFELP Loan Losses” in our 2024 Form 10-K for a more detailed discussion.

As part of the additional modification programs that were launched in the fourth quarter of 2023, we also offered for a short period of time a permanent term extension with no interest rate reduction program. This program ended in the fourth quarter of 2023. The amortized cost of this program totaled $6.6 million as of March 31, 2025, representing 0.03 percent of the total Private Education Loan portfolio. This program added a weighted average of 6.8 years to the life of loans participating in the program. As of March 31, 2025, both the defaulted amount and amortized cost basis of loans that participated in this program that defaulted during the three months ended March 31, 2025 and were modified for borrowers experiencing financial difficulty during the twelve months prior to default were immaterial. Additionally, the amortized cost of loans that participated in this program that were modified during the twelve months ended March 31, 2025 and subsequently charged-off during the three months ended March 31, 2025 was also immaterial.

For the periods presented, the following table presents the defaulted amount and period-end amortized cost basis, by modification category, of loans that defaulted during the period and were modified for borrowers experiencing financial difficulty during the 12 months preceding default. Solely for the purpose of the below table, starting in the quarter ended December 31, 2024, we changed our definition of payment default to be two missed consecutive post-modification payment obligations. As such, as reflected for the three months ended March 31, 2025 below, defaulted amount represents the principal amount of modified loans at the time the borrower missed two consecutive post-modification payment obligations during the period. Previously, as reflected for the three months ended March 31, 2024 in the table below, defaulted amount represented the principal amount of modified loans at the time they became 60 days or more past due in the relevant period. Loans that were modified during the twelve months ended March 31, 2025 and subsequently charged-off during the three months ended March 31, 2025 are not included in the period-end amortized cost basis and had an amortized cost basis of $18.5 million at the time of charge-off. The following table does not include loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023, which are described earlier in this Note 4.



	Three Months Ended March 31,
	2025				2024
(Dollars in thousands)	Defaulted Amount		Period-end Amortized Cost Basis		Defaulted Amount		Period-end Amortized Cost Basis
Loan Type:
Private Education Loans
Interest Rate Reduction	$	1,922	$	1,803	$	1,005	$	1,018
Combination - Interest Rate Reduction and Term Extension	39,064		37,091		13,491		13,765
Total	$	40,986	$	38,894	$	14,496	$	14,783

We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that have been modified within the three months prior to March 31, 2025, the 12 months prior to March 31, 2025, and the 12 months prior to December 31, 2024, respectively. Loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023 are not included in the below table, but are discussed above.


	Three Months Ended March 31, 2025				Twelve Months Ended March 31, 2025				Twelve Months Ended December 31, 2024
(Dollars in thousands)	Balance		%		Balance		%		Balance		%
Payment Status (Amortized Cost Basis)(1):
Loan modifications in deferment(2)	$	1,612			$	33,618			$	33,645
Loan modifications in repayment:
Loans current(3)(4)	48,710		34	%	692,649		79	%	826,007		83	%
Loans delinquent 30-59 days(3)(4)	43,323		30	%	76,207		9	%	77,446		8	%
Loans delinquent 60-89 days(3)(4)	26,691		19	%	48,976		6	%	43,484		4	%
Loans 90 days or greater past due(3)(4)	24,939		17	%	49,463		6	%	54,473		5	%
Total loan modifications in repayment	143,663		100	%	867,295		100	%	1,001,410		100	%
Total Private Education Loan modifications	$	145,275			$	900,913			$	1,035,055

(1) Loans that were modified during the twelve months ended March 31, 2025 and subsequently charged-off during the three months ended March 31, 2025 are excluded from the table and had an amortized cost basis of $18.5 million. Loans that were both modified and subsequently charged-off during the twelve months ended March 31, 2025 are excluded from the table and had an amortized cost basis of $50.0 million. Loans that were both modified and subsequently charged-off during the twelve months ended December 31, 2024 are excluded from the table and had an amortized cost basis of $40.4 million. Additionally, loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023 are excluded from the table.

(2) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted.

(3) Represents loans in repayment, which include loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

(4) The period of delinquency is based on the number of days scheduled payments are contractually past due.

Private Education Loans Held for Investment - Key Credit Quality Indicators

For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination approval/first disbursement, stratified by key credit quality indicators.


As of March 31, 2025 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2025(1)		2024(1)		2023(1)		2022(1)		2021(1)		2020 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	859,190	$	5,895,269	$	3,629,844	$	2,386,878	$	1,604,095	$	5,421,272	$	19,796,548	88	%
Without cosigner	83,188		566,097		511,306		397,767		286,663		790,556		2,635,577		12
Total	$	942,378	$	6,461,366	$	4,141,150	$	2,784,645	$	1,890,758	$	6,211,828	$	22,432,125	100	%

FICO at Origination Approval(2):
Less than 670	$	51,495	$	379,320	$	310,698	$	231,818	$	144,364	$	537,354	$	1,655,049	7	%
670-699	124,044		783,165		590,368		394,851		260,696		1,029,177		3,182,301		14
700-749	294,174		1,955,019		1,278,201		872,195		603,290		2,093,039		7,095,918		32
Greater than or equal to 750	472,665		3,343,862		1,961,883		1,285,781		882,408		2,552,258		10,498,857		47
Total	$	942,378	$	6,461,366	$	4,141,150	$	2,784,645	$	1,890,758	$	6,211,828	$	22,432,125	100	%


FICO Refreshed(2)(3):
Less than 670	$	78,272	$	616,695	$	578,313	$	449,560	$	302,294	$	1,037,950	$	3,063,084	14	%
670-699	126,040		800,321		530,393		344,692		222,205		664,969		2,688,620		12
700-749	286,159		1,863,056		1,148,737		742,163		494,666		1,590,227		6,125,008		27
Greater than or equal to 750	451,907		3,181,294		1,883,707		1,248,230		871,593		2,918,682		10,555,413		47
Total	$	942,378	$	6,461,366	$	4,141,150	$	2,784,645	$	1,890,758	$	6,211,828	$	22,432,125	100	%

Seasoning(4):
1-12 payments	$	506,319	$	3,438,840	$	544,214	$	398,355	$	227,135	$	389,019	$	5,503,882	25	%
13-24 payments	—		295,985		2,093,179		263,144		169,556		406,222		3,228,086		14
25-36 payments	—		—		161,894		1,384,100		172,968		483,553		2,202,515		10
37-48 payments	—		—		—		103,094		947,463		547,483		1,598,040		7
More than 48 payments	—		—		—		—		53,621		3,782,254		3,835,875		17
Not yet in repayment	436,059		2,726,541		1,341,863		635,952		320,015		603,297		6,063,727		27
Total	$	942,378	$	6,461,366	$	4,141,150	$	2,784,645	$	1,890,758	$	6,211,828	$	22,432,125	100	%

2025 Current period(5) gross charge-offs	$	(30)	$	(2,204)	$	(11,879)	$	(14,517)	$	(11,192)	$	(47,081)	$	(86,903)
2025 Current period(5) recoveries	—		167		1,045		1,515		1,135		6,872		10,734
2025 Current period(5) net charge-offs	$	(30)	$	(2,037)	$	(10,834)	$	(13,002)	$	(10,057)	$	(40,209)	$	(76,169)

Total accrued interest by origination approval vintage	$	14,681	$	304,006	$	427,589	$	300,194	$	186,056	$	325,939	$	1,558,465
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the first-quarter 2025. (4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5)Current period refers to period from January 1, 2025 through March 31, 2025.


As of December 31, 2024 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2024(1)		2023(1)		2022(1)		2021(1)		2020(1)		2019 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	4,519,952	$	4,707,685	$	2,741,871	$	1,759,261	$	1,151,751	$	4,642,019	$	19,522,539	88	%
Without cosigner	504,640		613,825		443,376		310,175		222,245		618,208		2,712,469		12
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

FICO at Origination Approval(2):
Less than 670	$	293,025	$	394,962	$	261,589	$	155,661	$	94,355	$	475,186	$	1,674,778	8	%
670-699	615,617		753,548		449,214		285,181		197,205		898,535		3,199,300		14
700-749	1,525,547		1,641,641		998,834		660,373		451,695		1,782,121		7,060,211		32
Greater than or equal to 750	2,590,403		2,531,359		1,475,610		968,221		630,741		2,104,385		10,300,719		46
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%


FICO Refreshed(2)(3):
Less than 670	$	453,705	$	666,049	$	467,562	$	301,367	$	194,124	$	831,053	$	2,913,860	13	%
670-699	633,749		710,546		409,808		248,325		138,730		578,639		2,719,797		12
700-749	1,485,771		1,512,643		879,450		563,941		362,715		1,398,737		6,203,257		28
Greater than or equal to 750	2,451,367		2,432,272		1,428,427		955,803		678,427		2,451,798		10,398,094		47
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

Seasoning(4):
1-12 payments	$	2,860,113	$	774,471	$	499,812	$	280,154	$	159,762	$	324,506	$	4,898,818	22	%
13-24 payments	—		2,729,334		372,496		191,989		122,938		340,556		3,757,313		17
25-36 payments	—		—		1,564,157		254,068		110,952		429,127		2,358,304		11
37-48 payments	—		—		—		987,977		170,051		451,494		1,609,522		7
More than 48 payments	—		—		—		—		625,916		3,262,308		3,888,224		17
Not yet in repayment	2,164,479		1,817,705		748,782		355,248		184,377		452,236		5,722,827		26
Total	$	5,024,592	$	5,321,510	$	3,185,247	$	2,069,436	$	1,373,996	$	5,260,227	$	22,235,008	100	%

2024 Current period(5) gross charge-offs	$	(1,826)	$	(29,094)	$	(68,454)	$	(53,697)	$	(37,318)	$	(186,451)	$	(376,840)
2024 Current period(5) recoveries	117		2,191		6,487		5,771		3,840		26,350		44,756
2024 Current period(5) net charge-offs	$	(1,709)	$	(26,903)	$	(61,967)	$	(47,926)	$	(33,478)	$	(160,101)	$	(332,084)

Total accrued interest by origination approval vintage	$	195,291	$	484,531	$	325,962	$	197,504	$	106,565	$	239,562	$	1,549,415

(1)Balance represents gross Private Education Loans held for investment.

(2)Represents the higher credit score of the cosigner or the borrower.

(3)Represents the FICO score updated as of the fourth-quarter 2024.

(4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due.

(5)Current period refers to January 1, 2024 through December 31, 2024.

Delinquencies - Private Education Loans Held for Investment

The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval/first disbursement. 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 following tables, do not include loans in the “loans in forbearance” metric).


	Private Education Loans Held for Investment - Delinquencies by Origination Approval Vintage
As of March 31, 2025 (dollars in thousands)	2025			2024			2023			2022			2021			2020 and Prior			Total

Loans in-school/grace/deferment(1)	$	436,059		$	2,726,541		$	1,341,863		$	635,952		$	320,015		$	603,297		$	6,063,727
Loans in forbearance(2)	1,040			37,981			139,850			96,559			62,922			126,249			464,601
Loans in repayment:
Loans current	504,171			3,673,471			2,578,666			1,965,257			1,439,732			5,172,375			15,333,672
Loans delinquent 30-59 days(3)	1,108			13,654			35,819			39,736			31,663			154,299			276,279
Loans delinquent 60-89 days(3)	—			5,932			23,863			24,895			19,818			78,104			152,612
Loans 90 days or greater past due(3)	—			3,787			21,089			22,246			16,608			77,504			141,234
Total Private Education Loans in repayment	505,279			3,696,844			2,659,437			2,052,134			1,507,821			5,482,282			15,903,797
Total Private Education Loans, gross	942,378			6,461,366			4,141,150			2,784,645			1,890,758			6,211,828			22,432,125
Private Education Loans deferred origination costs and unamortized premium/(discount)	13,142			42,843			20,119			9,329			5,521			11,840			102,794
Total Private Education Loans	955,520			6,504,209			4,161,269			2,793,974			1,896,279			6,223,668			22,534,919
Private Education Loans allowance for losses	(36,944)			(332,859)			(283,874)			(217,640)			(141,990)			(430,408)			(1,443,715)
Private Education Loans, net	$	918,576		$	6,171,350		$	3,877,395		$	2,576,334		$	1,754,289		$	5,793,260		$	21,091,204

Percentage of Private Education Loans in repayment	53.6		%	57.2		%	64.2		%	73.7		%	79.7		%	88.3		%	70.9		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.2		%	0.6		%	3.0		%	4.2		%	4.5		%	5.7		%	3.6		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.2		%	1.0		%	5.0		%	4.5		%	4.0		%	2.3		%	2.8		%

(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).

(2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors (other than delinquent loans in disaster forbearance), consistent with established loan program servicing policies and procedures.

(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2024 (dollars in thousands)	2024			2023			2022			2021			2020			2019 and Prior			Total

Loans in-school/grace/deferment(1)	$	2,164,479		$	1,817,705		$	748,782		$	355,248		$	184,377		$	452,236		$	5,722,827
Loans in forbearance(2)	19,984			124,728			87,961			52,686			31,575			88,496			405,430
Loans in repayment:
Loans current	2,820,940			3,312,916			2,259,455			1,590,812			1,107,189			4,422,021			15,513,333
Loans delinquent 30-59 days(3)	13,533			36,441			45,543			35,245			27,302			152,684			310,748
Loans delinquent 60-89 days(3)	3,973			15,239			23,359			18,365			10,921			68,878			140,735
Loans 90 days or greater past due(3)	1,683			14,481			20,147			17,080			12,632			75,912			141,935
Total Private Education Loans in repayment	2,840,129			3,379,077			2,348,504			1,661,502			1,158,044			4,719,495			16,106,751
Total Private Education Loans, gross	5,024,592			5,321,510			3,185,247			2,069,436			1,373,996			5,260,227			22,235,008
Private Education Loans deferred origination costs and unamortized premium/(discount)	47,659			25,599			10,788			6,142			4,057			8,825			103,070
Total Private Education Loans	5,072,251			5,347,109			3,196,035			2,075,578			1,378,053			5,269,052			22,338,078
Private Education Loans allowance for losses	(258,235)			(326,207)			(234,532)			(150,324)			(90,600)			(376,022)			(1,435,920)
Private Education Loans, net	$	4,814,016		$	5,020,902		$	2,961,503		$	1,925,254		$	1,287,453		$	4,893,030		$	20,902,158

Percentage of Private Education Loans in repayment	56.5		%	63.5		%	73.7		%	80.3		%	84.3		%	89.7		%	72.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.7		%	2.0		%	3.8		%	4.3		%	4.4		%	6.3		%	3.7		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.7		%	3.6		%	3.6		%	3.1		%	2.7		%	1.8		%	2.5		%

(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school. The allowance for credit losses considers the collectibility of both principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses.


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest(1)

March 31, 2025	$	1,558,465	$	6,539	$	14,192
December 31, 2024	$	1,549,415	$	6,420	$	12,366

(1)At March 31, 2025 and December 31, 2024, $156 million and $164 million, respectively, of accrued interest receivable was not expected to be capitalized and $1.4 billion and $1.4 billion of accrued interest receivable was expected to be capitalized.

Unfunded Loan Commitments

When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. See Note 2, “Significant Accounting Policies - Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2024 Form 10-K for additional information.

At March 31, 2025, we had $584 million of outstanding contractual loan commitments that we expect to fund during the remainder of the 2024/2025 academic year. The table below summarizes 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.


	2025				2024
Three Months Ended March 31, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	84,568	$	2,311,660	$	112,962	$	2,221,077
Provision/New commitments - net(1)	44,456		1,043,958		50,686		1,034,458
Transfer - funded loans(2)	(105,134)		(2,771,478)		(131,614)		(2,582,043)
Ending Balance	$	23,890	$	584,140	$	32,034	$	673,492

(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.

The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments. We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments. The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to period based upon the loan characteristics of the underlying commitments.