Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2017

Segment Revenue Include Healthcare Services

	Years Ended December 31,
(Dollars in billions)	2017		2016		2015
Revenue from government services	$	134	$	106	$	86
Revenue from healthcare services		78		68		13
Total fee revenue	$	212	$	174	$	99
Contingent collection receivables inventory (in billions)	$	11.4	$	10.1	$	9.9

Segment Results and Reconciliations to GAAP

	Year Ended December 31, 2017
										Total			Adjustments
(Dollars in millions)	Federal Education Loans		Consumer Lending		Business Processing		Other			“Core Earnings”			Reclassifications			Additions/ (Subtractions)			Total Adjustments⁽¹⁾			Total GAAP
Interest income:
Education loans	$	2,679	$	1,634	$	—	$	—		$	4,313		$	69		$	(55	)	$	14		$	4,327
Other loans		13		—		—		—			13			—			—			—			13
Cash and investments		29		5		—		9			43			—			—			—			43
Total interest income		2,721		1,639		—		9			4,369			69			(55	)		14			4,383
Total interest expense		2,022		825		—		143			2,990			(8	)		(11	)		(19	)		2,971
Net interest income (loss)		699		814		—		(134	)		1,379			77			(44	)		33			1,412
Less: provisions for loan losses		44		382		—		—			426			—			—			—			426
Net interest income (loss) after provisions for loan losses		655		432		—		(134	)		953			77			(44	)		33			986
Other income (loss):
Servicing revenue		280		10		—		—			290			—			—			—			290
Asset recovery and business processing revenue		263		—		212		—			475			—			—			—			475
Other income		3		—		—		16			19			(77	)		89			12			31
Gains on sales of loans and investments		3		—		—		—			3			—			—			—			3
Losses on debt repurchases		—		—		—		(3	)		(3	)		—			—			—			(3	)
Total other income (loss)		549		10		212		13			784			(77	)		89			12			796
Expenses:
Direct operating expenses		316		156		187		—			659			—			—			—			659
Overhead expenses		—		—		—		307			307			—			—			—			307
Operating expenses		316		156		187		307			966			—			—			—			966
Goodwill and acquired intangible asset impairment and amortization		—		—		—		—			—			—			23			23			23
Restructuring/other reorganization expenses		—		—		—		29			29			—			—			—			29
Total expenses		316		156		187		336			995			—			23			23			1,018
Income (loss) before income tax expense (benefit)		888		286		25		(457	)		742			—			22			22			764
Income tax expense (benefit)⁽²⁾		321		103		9		58			491			—			(19	)		(19	)		472
Net income (loss)	$	567	$	183	$	16	$	(515	)	$	251		$	—		$	41		$	41		$	292

⁽¹⁾	“Core Earnings” adjustments to GAAP:

	Year Ended December 31, 2017
(Dollars in millions)	Net Impact of Derivative Accounting		Net Impact of Acquired Intangibles			Total
Net interest income after provisions for loan losses	$	33	$	—		$	33
Total other income (loss)		12		—			12
Goodwill and acquired intangible asset impairment and amortization		—		23			23
Total “Core Earnings” adjustments to GAAP	$	45	$	(23	)		22
Income tax expense (benefit)							(19	)
Net income (loss)						$	41

⁽²⁾	Income taxes are based on a percentage of net income before tax for the individual reportable segment with the impact of the DTA Remeasurement Loss included in the Other segment.

	Year Ended December 31, 2016
										Total		Adjustments
(Dollars in millions)	Federal Education Loans		Consumer Lending		Business Processing		Other			“Core Earnings”		Reclassifications			Additions/ (Subtractions)			Total Adjustments⁽¹⁾		Total GAAP
Interest income:
Education loans	$	2,395	$	1,587	$	—	$	—		$	3,982	$	247		$	(114	)	$	133	$	4,115
Other loans		9		—		—		—			9		—			—			—		9
Cash and investments		16		2		—		4			22		—			—			—		22
Total interest income		2,420		1,589		—		4			4,013		247			(114	)		133		4,146
Total interest expense		1,597		704		—		109			2,410		31			—			31		2,441
Net interest income (loss)		823		885		—		(105	)		1,603		216			(114	)		102		1,705
Less: provisions for loan losses		46		383		—		—			429		—			—			—		429
Net interest income (loss) after provisions for loan losses		777		502		—		(105	)		1,174		216			(114	)		102		1,276
Other income (loss):
Servicing revenue		289		15		—		—			304		—			—			—		304
Asset recovery and business processing revenue		216		—		174		—			390		—			—			—		390
Other income		—		—		—		14			14		(216	)		326			110		124
Gains on debt repurchases		—		—		—		1			1		—			—			—		1
Total other income (loss)		505		15		174		15			709		(216	)		326			110		819
Expenses:
Direct operating expenses		366		149		149		—			664		—			—			—		664
Overhead expenses		—		—		—		287			287		—			—			—		287
Operating expenses		366		149		149		287			951		—			—			—		951
Goodwill and acquired intangible asset impairment and amortization		—		—		—		—			—		—			36			36		36
Restructuring/other reorganization expenses		—		—		—		—			—		—			—			—		—
Total expenses		366		149		149		287			951		—			36			36		987
Income (loss) before income tax expense (benefit)		916		368		25		(377	)		932		—			176			176		1,108
Income tax expense (benefit)⁽²⁾		338		137		9		(139	)		345		—			82			82		427
Net income (loss)	$	578	$	231	$	16	$	(238	)	$	587	$	—		$	94		$	94	$	681

⁽¹⁾	“Core Earnings” adjustments to GAAP:

	Year Ended December 31, 2016
(Dollars in millions)	Net Impact of Derivative Accounting		Net Impact of Acquired Intangibles			Total
Net interest income after provisions for loan losses	$	102	$	—		$	102
Total other income (loss)		110		—			110
Goodwill and acquired intangible asset impairment and amortization		—		36			36
Total “Core Earnings” adjustments to GAAP	$	212	$	(36	)		176
Income tax expense (benefit)							82
Net income (loss)						$	94

⁽²⁾	Income taxes are based on a percentage of net income before tax for the individual reportable segment.

	Year Ended December 31, 2015
											Total			Adjustments
(Dollars in millions)	Federal Education Loans		Consumer Lending			Business Processing		Other			“Core Earnings”			Reclassi- fications			Additions/ (Subtractions)			Total Adjustments⁽¹⁾		Total GAAP
Interest income:
Education loans	$	2,112	$	1,756		$	—	$	—		$	3,868		$	650		$	(238	)	$	412	$	4,280
Other loans		7		—			—		—			7			—			—			—		7
Cash and investments		6		—			—		2			8			—			—			—		8
Total interest income		2,125		1,756			—		2			3,883			650			(238	)		412		4,295
Total interest expense		1,247		680			—		110			2,037			37			—			37		2,074
Net interest income (loss)		878		1,076			—		(108	)		1,846			613			(238	)		375		2,221
Less: provisions for loan losses		43		538			—		—			581			—			—			—		581
Net interest income (loss) after provisions for loan losses		835		538			—		(108	)		1,265			613			(238	)		375		1,640
Other income (loss):
Servicing revenue		319		21			—		—			340			—			—			—		340
Asset recovery and business processing revenue		268		—			99		—			367			—			—			—		367
Other income		3		—			—		12			15			(613	)		781			168		183
Gains (losses) on sales of loans and investments		11		(21	)		—		1			(9	)		—			—			—		(9	)
Gains on debt repurchases		—		—			—		21			21			—			—			—		21
Total other income (loss)		601		—			99		34			734			(613	)		781			168		902
Expenses:
Direct operating expenses		401		151			83		—			635			—			—			—		635
Overhead expenses		—		—			—		283			283			—			—			—		283
Operating expenses		401		151			83		283			918			—			—			—		918
Goodwill and acquired intangible asset impairment and amortization		—		—			—		—			—			—			12			12		12
Restructuring/other reorganization expenses		—		—			—		—			—			—			32			32		32
Total expenses		401		151			83		283			918			—			44			44		962
Income (loss) from continuing operations, before income tax expense (benefit)		1,035		387			16		(357	)		1,081			—			499			499		1,580
Income tax expense (benefit)⁽²⁾		384		143			6		(132	)		401			—			196			196		597
Net income (loss) from continuing operations		651		244			10		(225	)		680			—			303			303		983
Income from discontinued operations, net of tax expense		—		—			—		1			1			—			—			—		1
Net income (loss)	$	651	$	244		$	10	$	(224	)	$	681		$	—		$	303		$	303	$	984

⁽¹⁾	“Core Earnings” adjustments to GAAP:

	Year Ended December 31, 2015
(Dollars in millions)	Net Impact from Spin-Off of SLM BankCo			Net Impact of Derivative Accounting		Net Impact of Acquired Intangibles			Total
Net interest income after provisions for loan losses	$	—		$	375	$	—		$	375
Total other income (loss)		—			168		—			168
Goodwill and acquired intangible asset impairment and amortization		—			—		12			12
Restructuring/other reorganization expenses		32			—		—			32
Total “Core Earnings” adjustments to GAAP	$	(32	)	$	543	$	(12	)		499
Income tax expense (benefit)										196
Net income (loss)									$	303

⁽²⁾	Income taxes are based on a percentage of net income before tax for the individual reportable segment.

Core Earnings Adjustments to GAAP

Summary of “Core Earnings” Adjustments to GAAP

	Years Ended December 31,
(Dollars in millions)	2017			2016			2015
“Core Earnings” adjustments to GAAP:
Net impact of the removal of SLM BankCo’s operations and restructuring and reorganization expense in connection with the Spin-Off⁽¹⁾	$	—		$	—		$	(32	)
Net impact of derivative accounting⁽²⁾		45			212			543
Net impact of goodwill and acquired intangible assets⁽³⁾		(23	)		(36	)		(12	)
Net tax effect⁽⁴⁾		19			(82	)		(196	)
Total “Core Earnings” adjustments to GAAP	$	41		$	94		$	303

⁽¹⁾

SLM BankCo’s operations and restructuring and other reorganization expense in connection with the Spin-Off: For “Core Earnings,” we have assumed the consumer banking business (SLM BankCo) was never a part of Navient’s historical results prior to the deemed distribution of SLM BankCo on April 30, 2014 and we have removed the restructuring and other reorganization expense incurred in connection with the Spin-Off, including the restructuring expenses related to the restructuring initiative launched in second-quarter 2015 to simplify and streamline the Company’s management structure post-Spin-Off. Excluding these items provides management with a useful basis from which to better evaluate results from ongoing operations against results from prior periods.

⁽²⁾

Derivative accounting: “Core Earnings” exclude periodic unrealized gains and losses that are caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP as well as the periodic unrealized gains and losses that are a result of ineffectiveness recognized related to effective hedges under GAAP. These unrealized gains and losses occur in our Federal Education Loans, Consumer Lending and Other reportable segments. Under GAAP, for our derivatives that are held to maturity, the cumulative net unrealized gain or loss over the life of the contract will equal $0 except for Floor Income Contracts where the cumulative unrealized gain will equal the amount for which we sold the contract. In our “Core Earnings” presentation, we recognize the economic effect of these hedges, which generally results in any net settlement cash paid or received being recognized ratably as an interest expense or revenue over the hedged item’s life.

⁽³⁾

Goodwill and acquired intangible assets: Our “Core Earnings” exclude goodwill and intangible asset impairment and amortization of acquired intangible assets.

⁽⁴⁾

Net Tax Effect: Such tax effect is based upon our “Core Earnings” effective tax rate for the year.

FFELP Loans Segment [Member]

Asset Information for Loans Segment

The following table includes GAAP basis asset information for our Federal Education Loans segment.

	December 31,
(Dollars in millions)	2017		2016
FFELP Loans, net	$	81,703	$	87,730
Cash and investments⁽¹⁾		2,821		3,299
Other		2,601		2,226
Total assets	$	87,125	$	93,255

⁽¹⁾

Includes restricted cash and investments.

Private Education Loans Segment [Member]

Asset Information for Loans Segment

The following table includes GAAP basis asset information for our Consumer Lending segment.

	December 31,
(Dollars in millions)	2017		2016
Private Education Loans, net	$	23,419	$	23,340
Cash and investments⁽¹⁾		706		667
Other		1,143		1,562
Total assets	$	25,268	$	25,569

⁽¹⁾

Includes restricted cash and investments.