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What changed in SLM Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SLM Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+587 added−693 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in SLM Corp's 2023 10-K

587 paragraphs added · 693 removed · 467 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

95 edited+18 added−25 removed98 unchanged
Biggest changeWe expect students who attend and complete programs at for-profit schools to support the same repayment performance as students who attend and graduate from public and private not-for-profit four-year degree granting institutions. 8 SLM CORPORATION — 2022 Form 10-K Our competitors 1 in the Private Education Loan market include large banks such as Discover Bank, Citizens Financial Group, Inc., and PNC Bank, as well as a number of smaller specialty finance companies and members of the Education Finance Council.
Biggest changeOur competitors 1 in the Private Education Loan market include large banks such as Citizens Financial Group, Inc. and PNC Bank, as well as a number of smaller specialty finance companies such as Sofi Technologies, Inc. and College Ave, and members of the Education Finance Council. We compete based on our products, originations capability, price, and customer service.
Some of the more significant laws and regulations applicable to our business include: • various state and federal laws governing unfair, deceptive, or abusive acts or practices; • various state laws and regulations imposing specific, mandated standards and requirements on the conduct and practices of student loan lenders and servicers; • the federal Truth-In-Lending Act and Regulation Z, which govern disclosures of credit terms to consumer borrowers; • the Fair Credit Reporting Act and Regulation V, which govern the use and provision of information to consumer reporting agencies; • the Equal Credit Opportunity Act and Regulation B, which prohibit creditor practices that discriminate on the basis of race, religion, and other prohibited factors in extending credit; • the SCRA, which applies to all debts incurred prior to commencement of active military service (including education loans) and limits the amount of interest, including fees, that may be charged; • the Truth in Savings Act and Regulation DD, which mandate certain disclosures related to consumer deposit accounts; • the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which relate to the availability of deposit funds to consumers; • the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with federal government requests for and subpoenas of financial records; • the Electronic Funds Transfer Act and Regulation E, which govern automated transfers of funds and consumers’ rights related thereto; • the Telephone Consumer Protection Act, which governs communication methods that may be used to contact customers; 2022 Form 10-K — SLM CORPORATION 13 • the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic information about consumers to non-affiliated third-parties; and • the California Consumer Privacy Act and California Privacy Rights Act, which govern transparency and disclosure obligations regarding personal information of residents of the State of California.
Some of the more significant laws and regulations applicable to our business include: • various state and federal laws governing unfair, deceptive, or abusive acts or practices; • various state laws and regulations imposing specific, mandated standards and requirements on the conduct and practices of student loan lenders and servicers; • the federal Truth-In-Lending Act and Regulation Z, which govern disclosures of credit terms to consumer borrowers; • the Fair Credit Reporting Act and Regulation V, which govern the use and provision of information to consumer reporting agencies; • the Equal Credit Opportunity Act and Regulation B, which prohibit creditor practices that discriminate on the basis of race, religion, and other prohibited factors in extending credit; • the SCRA, which applies to all debts incurred prior to commencement of active military service (including education loans) and limits the amount of interest, including fees, that may be charged; • the Truth in Savings Act and Regulation DD, which mandate certain disclosures related to consumer deposit accounts; • the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which relate to the availability of deposit funds to consumers; • the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with federal government requests for and subpoenas of financial records; • the Electronic Funds Transfer Act and Regulation E, which govern automated transfers of funds and consumers’ rights related thereto; • the Telephone Consumer Protection Act, which governs communication methods that may be used to contact customers; 12 SLM CORPORATION — 2023 Form 10-K • the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic information about consumers to non-affiliated third parties; and • the California Consumer Privacy Act and California Privacy Rights Act, which govern transparency and disclosure obligations regarding personal information of residents of the State of California.
Sallie Mae created a Graduated Repayment Period program (the “GRP”) to assist borrowers with additional payment flexibility, allowing customers to make interest-only payments instead of full principal and interest payments for a period of 12 months if they elect within a specified time frame to participate in the GRP.
Sallie Mae created a Graduated Repayment Period program (the “GRP”) to assist borrowers with additional payment flexibility, allowing eligible customers to make interest-only payments instead of full principal and interest payments for a period of 12 months if they elect within a specified time frame to participate in the GRP.
In addition, we must comply with increasingly complex and rigorous data privacy and data security laws and regulatory standards enacted to protect business and personal data. These laws impose additional obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored.
In addition, we must comply with increasingly complex and rigorous data privacy and data security laws and regulatory standards enacted to protect business and personal data. These laws impose additional obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored and shared.
Our Approach to Assisting Students and Families Borrowing and Repaying Private Education Loans Half of our Private Education Loan customers elect an in-school repayment option. By making in-school payments, customers learn to establish good repayment patterns, reduce their total loan cost, and graduate with less debt.
Our Approach to Assisting Students and Families Borrowing and Repaying Private Education Loans Approximately half of our Private Education Loan customers elect an in-school repayment option. By making in-school payments, customers learn to establish good repayment patterns, reduce their total loan cost, and graduate with less debt.
Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2030 (NCES 2022, October 2022), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing and Student Aid 2022. © 2022 The College Board, www.collegeboard.org, and Company analysis. Other sources for these data points also exist publicly and may vary from our computed estimates.
Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2030 (NCES 2023, October 2023), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing and Student Aid 2023. © 2023 The College Board, www.collegeboard.org, and Company analysis. Other sources for these data points also exist publicly and may vary from our computed estimates.
Bureau of Labor and Statistics confirms those with bachelor’s degrees earn 65 percent more than those with a high school diploma. 1 Those with advanced degrees earn an even greater percentage than those with a high school diploma. 1 This effect is multigenerational, as children of parents who are college educated are more likely to earn a bachelor’s degree than students whose parents did not go to college.
Bureau of Labor and Statistics confirms those with bachelor’s degrees earn 68 percent more than those with a high school diploma. 1 Those with advanced degrees earn an even greater percentage than those with a high school diploma. 1 This effect is multigenerational, as children of parents who are college educated are more likely to earn a bachelor’s degree than students whose parents did not go to college.
With any securitizations, including any loan sale transactions structured as securitizations, that are treated as off-balance 20 SLM CORPORATION — 2022 Form 10-K sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction; for future off-balance securitizations, we may also comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) a single interest entitling the holder to five percent of any amounts payable by the trustee in respect of each interest issued by the issuing trust.
With any securitizations that are treated as off-balance sheet, including any loan sale transactions structured as securitizations, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction; 2023 Form 10-K — SLM CORPORATION 19 for future off-balance securitizations, we may also comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) a single interest entitling the holder to five percent of any amounts payable by the trustee in respect of each interest issued by the issuing trust.
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an accelerated share repurchase agreement (“ASR”) with a third-party financial institution under which we paid $525 million for an upfront delivery of our common stock and a forward agreement. On March 11, 2020, the third-party financial institution delivered to us approximately 44.9 million shares.
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an accelerated share repurchase agreement (“ASR”) with a third-party financial institution under which we paid $525 million for an upfront delivery of our common stock and a forward agreement. On March 11, 2020, the third-party financial institution delivered to us approximately 45 million shares.
Our Private Education Loans generally feature (i) no origination fees and no prepayment penalties, (ii) interest rate reductions for those who enroll in and make monthly payments through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv) a choice of repayment options, (v) a choice of either variable or fixed interest rates at origination, and (vi) loan forgiveness in the case of death or permanent disability of the student borrower.
Our Private Education Loans generally feature (i) no origination fees and no prepayment penalties, (ii) an interest rate reduction for those who enroll in and make monthly payments through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv) a choice of repayment options, (v) a choice of either a variable or fixed interest rate, and (vi) loan forgiveness in the case of death or permanent disability of the student borrower.
Supplement college savings and income by maximizing scholarships, grants, and work-study. Explore federal student loans. Explore federal student loan options by completing the Free Application for Federal Student Aid (“FAFSA”). Consider a responsible private student loan. Fill the gap between available resources and any remaining costs of college.
Supplement savings and income by maximizing scholarships, grants, and work-study. Explore federal student loans. Explore federal student loan options by completing the Free Application for Federal Student Aid (“FAFSA”). Consider a responsible private student loan. Fill the gap between available resources and any remaining costs of higher education.
This has a minimal impact on historically-stated numbers. 12 SLM CORPORATION — 2022 Form 10-K Supervision and Regulation Overview We are subject to extensive regulation, examination, and supervision by various federal, state, and local authorities. The more significant aspects of the laws and regulations that apply to us and our subsidiaries are described below.
This has a minimal impact on historically-stated numbers. 2023 Form 10-K — SLM CORPORATION 11 Supervision and Regulation Overview We are subject to extensive regulation, examination, and supervision by various federal, state, and local authorities. The more significant aspects of the laws and regulations that apply to us and our subsidiaries are described below.
The Bank declared $700 million, $1.4 billion, and $579 million in dividends for the years ended December 31, 2022, 2021, and 2020, respectively, with the proceeds primarily used to fund the 2022, 2021, and 2020 Share Repurchase Programs and stock dividends. Regulatory Capital Requirements The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI.
The Bank declared $550 million, $700 million, and $1.4 billion in dividends for the years ended December 31, 2023, 2022, and 2021, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. Regulatory Capital Requirements The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI.
SmartyPig Our SmartyPig™ product is a free, FDIC-insured, online, goal-based savings account that helps consumers save for long- and short-term goals. Its tiered interest rates reward consumers for growing their savings. At December 31, 2022, we had $330 million in SmartyPig deposits.
SmartyPig Our SmartyPig™ product is a free, FDIC-insured, online, goal-based savings account that helps consumers save for long- and short-term goals. Its tiered interest rates reward consumers for growing their savings. At December 31, 2023, we had $329 million in SmartyPig deposits.
The timing and volume of any repurchases under the 2022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the program or at all.
The timing and volume of any repurchases will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the 2024 Share Repurchase Program or at all.
Modest growth in total spending can lead to meaningful increases in Private Education Loans in the absence of growth in other sources of funding. 5 • Over the AYs 2017-2022 period, increases in total spending have been absorbed primarily through increased family contributions.
Modest growth in total spending can lead to meaningful increases in Private Education Loans in the absence of growth in other sources of funding. 5 • Over the AYs 2018-2023 period, increases in total spending have been absorbed primarily through increased family contributions.
On January 1 of each year from 2023 to 2025, the adjusted transition amounts will continue to be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year.
On January 1 of 2024 and 2025, the adjusted transition amounts will continue to be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year.
For example, California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, and the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA and brought additional compliance obligations with respect to certain processing of personal information of California residents once it came into effect in most material respects on January 1, 2023.
For example, 18 SLM CORPORATION — 2023 Form 10-K California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, and the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA and brought additional compliance obligations with respect to certain processing of personal information of California residents once it came into effect in most material respects on January 1, 2023.
In the event of a cosigner’s death, the student borrower automatically continues as the sole individual on the loan with the same terms. 6 SLM CORPORATION — 2022 Form 10-K If a customer’s account becomes delinquent, our collections centers work with the customer and/or the cosigner to understand their ability to make ongoing payments.
In the event of a cosigner’s death, the student borrower automatically continues as the sole individual on the loan with the same terms. 6 SLM CORPORATION — 2023 Form 10-K If a customer’s account becomes delinquent, our collection teams work with the customer and/or the cosigner to understand their ability to make ongoing payments.
Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer.
Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the Tender Offer.
We maintained our diversified funding base by raising $575 million in term funding collateralized by pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market in 2022. This brought our total ABS funding outstanding at December 31, 2022 to $4.2 billion, or 22 percent of our total Private Education Loans held for investment portfolio.
We maintained our diversified funding base by raising $1.1 billion in term funding collateralized by pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market in 2023. This brought our total ABS funding outstanding at December 31, 2023 to $4.2 billion, or 21 percent of our total Private Education Loans held for investment portfolio.
For additional information, see Notes to Consolidated Financial Statements, Note 14, “Stockholders’ Equity.” 16 SLM CORPORATION — 2022 Form 10-K Under the 2020 Share Repurchase Program, we repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share Repurchase Program.
For additional information, see Notes to Consolidated Financial Statements, Note 14, “Stockholders’ Equity.” Under the 2020 Share Repurchase Program, we repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share Repurchase Program.
Due to the low cost of two-year programs, federal grant and loan programs are typically sufficient for the funding needs of these students. Approximately 15 percent or $876 million of our 2022 Private Education Loan originations were for students attending for-profit schools.
Due to the low cost of two-year programs, federal grant and loan programs are typically sufficient for the funding needs of these students. Approximately 16 percent or $997 million of our 2023 Private Education Loan originations were for students attending for-profit schools.
At December 31, 2022, 3.8 percent of Private Education Loans (held for investment) in repayment were 30 days or more delinquent, and Private Education Loans (held for investment) in forbearance were 1.8 percent of loans in repayment and forbearance. In 2022, Private Education Loan net charge-offs as a percentage of average loans in repayment were 2.55 percent.
At December 31, 2023, 3.9 percent of Private Education Loans (held for investment) in repayment were 30 days or more delinquent, and Private Education Loans (held for investment) in forbearance were 2.1 percent of loans in repayment and forbearance. In 2023, Private Education Loan net charge-offs as a percentage of average loans in repayment were 2.44 percent.
Violations can include failure to timely file required 14 SLM CORPORATION — 2022 Form 10-K reports, filing false or misleading information, or submitting inaccurate reports. Civil penalties may be as high as $1,000,000 per day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years.
Violations can include failure to timely file required reports, filing false or misleading information, or submitting inaccurate reports. Civil penalties may be as high as $1,000,000 per day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years.
On January 26, 2022, we announced a new share repurchase program (the “2022 Share Repurchase Program”), which was effective upon announcement and expires on January 25, 2024, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
On January 26, 2022, we announced another share repurchase program (the “2022 Share Repurchase Program”), which was effective upon announcement and expired on January 25, 2024, and permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
Navient retained all assets and liabilities generated prior to the Spin-Off other than those explicitly retained by us pursuant to the Separation and Distribution Agreement (as hereinafter defined) executed in connection with the Spin-Off.
Navient retained all assets and liabilities generated prior to the Spin-Off other than those explicitly retained by us pursuant to the Separation and Distribution Agreement executed in connection with the Spin-Off (the “Separation and Distribution Agreement”).
All variation margin payments on derivatives cleared through the CME and LCH are required to be accounted for as legal settlement. As of December 31, 2022, $2.6 billion notional of our derivative contracts were cleared on the CME and $0.2 billion were cleared on the LCH.
All variation margin payments on derivatives cleared through the CME and LCH are required to be accounted for as legal settlement. As of December 31, 2023, $1.8 billion notional of our derivative contracts were cleared on the CME and $0.1 billion were cleared on the LCH.
Item 1. Business Our Company Mission SLM Corporation, more commonly known as Sallie Mae, is the premier financial brand in higher education. As an education solutions company, our mission is to power confidence as students begin their unique journey to, through, and immediately after college.
Item 1. Business Our Company Mission SLM Corporation, more commonly known as Sallie Mae, is the premier financial brand in higher education. As an education solutions company, our mission is to power confidence as students begin their unique journeys. We support students and families navigating to, through, and immediately after higher education.
Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory 2022 Form 10-K — SLM CORPORATION 17 accounting practices.
Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.
An insured bank’s assessment is calculated by multiplying its assessment rate by its assessment base. A bank’s assessment base and assessment rate are determined each quarter. The Bank’s insurance assessment base currently is its average consolidated total assets minus its average tangible equity during the assessment period.
A bank’s assessment base and assessment rate are determined each quarter. The Bank’s insurance assessment base currently is its average consolidated total assets minus its average tangible equity during the assessment period.
Average published tuition and fees at public and private four-year not-for-profit institutions grew 1.7 percent and 2.1 percent, respectively, between AYs 2020-2021 and 2021-2022 and 1.8 percent and 3.5 percent, respectively, between AYs 2021-2022 and 2022-2023. 3 Published Tuition and Fees 3 (Dollars in actuals) 3 Source: The College Board-Trends in College Pricing 2022. © 2022 The College Board. www.collegeboard.org.
Average published tuition and fees at public and private four-year not-for-profit institutions grew 2.2 percent and 4.9 percent, respectively, between AYs 2021-2022 and 2022-2023 and 2.5 percent and 4.0 percent, respectively, between AYs 2022-2023 and 2023-2024. 3 Published Tuition and Fees 3 (Dollars in actuals) 3 Source: The College Board-Trends in College Pricing 2023. © 2023 The College Board. www.collegeboard.org.
For Private Education Loans originated during the year ended December 31, 2022, our average FICO scores (representing the higher credit scores of the cosigners or borrowers) at the time of original approval were 747, and approximately 86 percent of those loans were cosigned.
For Private Education Loans originated during the year ended December 31, 2023, our average FICO scores (representing the higher credit scores of the cosigners or borrowers) at the time of original approval were 748, and approximately 87.5 percent of those loans were cosigned.
Federal and state banking agencies have prescribed standards for maintaining the security and confidentiality of consumer information, and the Bank is subject to such standards, as well as certain federal and state laws or standards for notifying consumers 2022 Form 10-K — SLM CORPORATION 19 in the event of a security breach.
Federal and state banking agencies have prescribed standards for maintaining the security and confidentiality of consumer information, and the Bank is subject to such standards, as well as certain federal and state laws or standards for notifying consumers in the event of a security breach.
We rely on publicly available sources for market estimates, because we believe it provides a more appropriate basis for comparison of the performance of our business. 2022 Form 10-K — SLM CORPORATION 11 • We estimate total spending on higher education was $483 billion in AY 2021-2022, up from $447 billion in AY 2017-2018.
We rely on publicly available sources for market estimates, because we believe it provides a more appropriate basis for comparison of the performance of our business. 10 SLM CORPORATION — 2023 Form 10-K • We estimate total spending on higher education was $485 billion in AY 2022-2023, up from $457 billion in AY 2018-2019.
The derivative contracts cleared through the CME and the LCH represent 92.2 percent and 7.8 percent, respectively, of our total notional derivative contracts of $2.8 billion at December 31, 2022. Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.
The derivative contracts cleared through the CME and LCH represent 92.6 percent and 7.4 percent, respectively, of our total notional derivative contracts of $1.9 billion at December 31, 2023. Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.
Making payments while in school helps customers become accustomed to making on-time regular loan payments. We offer both variable-rate and fixed-rate loans. We also offer six loan products for specific graduate programs of study.
Approximately half of our customers elect the in-school repayment option. Making payments while in school helps customers become accustomed to making on-time regular loan payments. We offer both variable-rate and fixed-rate loans. We also offer six loan products for specific graduate programs of study.
Our on-campus efforts with approximately 2,100 higher education institutions are led by our relationship management team, the largest in the industry, which has become a trusted resource for financial aid offices. 4 SLM CORPORATION — 2022 Form 10-K Our loans are high credit quality and the overwhelming majority of our customers manage their payments with great success.
Our on-campus efforts with approximately 2,100 higher education institutions are actively managed by our relationship management team, the largest in the industry, which has become a trusted resource for financial aid offices. Our loans are high credit quality and the overwhelming majority of our customers manage their payments with great success.
Customers generally may prevent financial institutions from sharing nonpublic personal financial information with nonaffiliated third parties, with some exceptions, such as the processing of transactions requested by the consumer. Financial institutions generally may not disclose certain consumer or account information to any nonaffiliated third party for use in telemarketing, direct mail marketing, or other marketing.
Customers generally may prevent financial institutions from sharing nonpublic personal information with nonaffiliated third parties, with some exceptions. Financial institutions generally may not disclose certain consumer or account information to any nonaffiliated third party for use in telemarketing, direct mail marketing, or other marketing.
To ensure applicants borrow only what they need to cover their school’s cost of attendance, we actively engage with schools and require school certification before we disburse a Private Education Loan.
To ensure applicants borrow only what they need to cover their school’s cost of attendance, we actively engage with schools and require school certification before we disburse a Private Education Loan (except for Bar Study loans and Residency and Relocation loans).
So long as there is unexpired capacity under a given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions.
Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions.
The College Board restates its data annually, which may cause previously reported results to vary. 10 SLM CORPORATION — 2022 Form 10-K Sources of Funding Private Education Loan originations remained at an estimated $11 billion in AY 2021-2022, unchanged from the previous year. 4 _______ 4 Source: The College Board-Trends in Student Aid 2016. © 2016 The College Board. www.collegeboard.org and The College Board-Trends in Student Aid 2022. © 2022 The College Board. www.collegeboard.org.
The College Board restates its data annually, which may cause previously reported results to vary. 2023 Form 10-K — SLM CORPORATION 9 Sources of Funding Private Education Loan originations were an estimated $11 billion in AY 2022-2023, and increase of $1 billion from AY 2021 - 2022. 4 _______ 4 Source: The College Board-Trends in Student Aid 2023© 2022 The College Board. www.collegeboard.org.
Customer Success We continue to adapt our business to best serve the needs of families who see us as a trusted advisor and partner. We are strongly invested in our customers’ success. Of total customers, approximately 98 percent of loans in repayment are in good standing.
Customer Success We continue to adapt our business to best serve the needs of families who see us as a trusted advisor and partner. We are strongly invested in our customers’ success. Of total customers, approximately 96 percent of loans in repayment are in good standing, and, on average, fewer than 3 percent of loans default annually.
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank elected to use this option.
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted the current expected credit losses accounting standard (“CECL”) during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology.
If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations. These can include extended repayment schedules, temporary interest rate reductions and, if appropriate, short-term hardship forbearance. These arrangements are suited to the customer’s individual circumstances and ability to make payments.
If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations. These can include extended repayment schedules, temporary interest rate reductions, in some cases permanent interest rate reductions, and, if appropriate, short-term hardship forbearance.
On January 1, 2022, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes.
On January 1, 2022, 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes. On January 1, 2023, an additional 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes.
In 2022, our team members donated 1,928 hours through our community engagement programs. We also provide matching gifts for team members to support their interests and needs and those of their communities. 22 SLM CORPORATION — 2022 Form 10-K
In 2023, our team members donated approximately 3,700 hours through our community engagement programs. We also provide matching gifts for team members to support their interests and needs and those of their communities. 20 SLM CORPORATION — 2023 Form 10-K
To help applicants understand their loan and its terms, we provide multiple, customized disclosures explaining the applicant’s starting interest rate, the interest rate during the life of the loan, and the loan’s total cost under the available repayment options.
To help applicants understand their loan and its terms, we provide multiple, customized disclosures explaining the applicant’s interest rate, whether the interest rate is fixed or variable, and the loan’s total cost under the available repayment options.
The Bank also conducts quarterly liquidity stress tests to evaluate the adequacy of its liquidity sources under various stress scenarios and provides the results to its Board of Directors.
The Bank also conducts quarterly liquidity stress tests to evaluate the adequacy of its liquidity sources under various stress scenarios and provides the results to its Board of Directors. These results are submitted to the Bank’s prudential regulators at their request.
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.
Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent. 16 SLM CORPORATION — 2023 Form 10-K To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.
Under the 2022 Share Repurchase Program, we repurchased 38.2 million shares of common stock at an average price per share of $17.52, for $669 million in the year ended December 31, 2022. There was $581 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2022.
Under the 2022 Share Repurchase Program, we repurchased 38.2 million shares of common stock at an average price per share of $17.52, for $669 million in the year ended December 31, 2022 and repurchased 22.3 million shares of common stock at an average price per share of $15.64, for $349 million in the year ended December 31, 2023.
Over the past few years, we have implemented several improvements in our ability to interact with our loan customers, including: • an integrated platform that allows customers and servicing agents to streamline our processes and provide efficiencies, thereby creating more customer-centric capabilities for our team members; • an on-line chat function for customer service; • a mobile application accessible through smart phones and the Apple watch; and • initiation of customer surveys to gain feedback on areas for improvement within our servicing function.
Over the past few years, we have implemented several improvements in our ability to interact with our loan customers, including: • an integrated platform with customer-centric capabilities that allows self-service and empowers our servicing and collections agents, thus streamlining our processes and providing efficiencies; • an on-line chat function for application support and customer service related inquires; • a mobile application accessible through smart phones; and • expansion of customer surveys to gain feedback on areas for improvement within our originations, servicing, and collections functions.
We continue to provide 2022 Form 10-K — SLM CORPORATION 21 team members with the tools and resources necessary to support their success and drive performance of the Company. Our team members are involved in the communities in which they live and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program.
We have made significant investments in learning and talent development, and provide team members with the tools and resources necessary to support their success and drive performance of the Company. Our team members are involved in the communities in which they live and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program.
We compete based on our products, originations capability, price, and customer service. Enrollment We expect enrollment to remain relatively flat over the next several years. Enrollment at Four-Year Degree Granting Institutions 2 (in millions) • According to the U.S.
Enrollment We expect enrollment to remain relatively flat over the next several years. Enrollment at Four-Year Degree Granting Institutions 2 (in millions) • According to the U.S.
We expect the acquisition of Nitro to enhance future strategic growth opportunities for us and expand our digital marketing capabilities, reduce the cost to acquire customer accounts, and accelerate our progress to become a broader education solutions provider helping students to, through, and immediately after college.
The acquisition of Nitro enhanced future strategic growth opportunities and expanded our digital marketing capabilities, reduced the cost to acquire customer accounts, and accelerated our progress to become a broader education solutions provider helping students to, through, and immediately after higher education.
These evaluations are considered in evaluating mergers, acquisitions, and applications to open a branch or facility. Failure to adequately meet these criteria could result in additional requirements and limitations on the Bank. The Bank has received a CRA rating of Outstanding.
Failure to adequately meet these criteria could result in additional requirements and limitations on the Bank. The Bank has received a CRA rating of Outstanding.
Customers generally elect one of three Smart Option repayment types at the time of loan origination. The first two, interest only and fixed payment options, require monthly payments while the student is in school and during the grace period thereafter, and accounted for approximately half of the Private Education Loans the Bank originated during 2022.
The first two, interest only and fixed payment options, require monthly payments while the student is in school and during the grace period thereafter, and accounted for approximately half of the Private Education Loans the Bank originated during 2023.
At December 31, 2022, the Bank had total assets of $28.3 billion, including $19.0 billion of Private Education Loans (held for investment), net, and $607 million of FFELP Loans (held for investment), and total deposits of $21.6 billion.
At December 31, 2023, the Bank had total assets of $29.1 billion, including $19.8 billion of Private Education Loans (held for investment), net, and $534 million of FFELP Loans (held for investment), and total deposits of $21.9 billion.
Private Education Loans Our primary business is to originate and service high-quality Private Education Loans. “Private Education Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation (the “FDIC”).
“Private Education Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation (the “FDIC”). We serve more families than any other private student loan lender.
For this reason, we measure employee engagement through culture surveys. These culture surveys provide insights we use to create an environment in which team members thrive and bring their full selves to work. Ensuring the safety and well-being of our team members continues to be a priority during the COVID-19 pandemic.
For this reason, we measure employee engagement through culture surveys. These culture surveys provide insights we use to create an environment in which team members thrive and bring their full selves to work.
Enterval LLC. www.enterval.com. Funding sources in current dollars and include federal and private loan data. 2022 Private Education Loan market assumptions use The College Board-Trends in Student Aid 2016© 2016 trends and College Board-Trends in Student Aid 2022 © 2022 data, and Enterval report.
Enterval LLC. www.enterval.com. Funding sources in current dollars and include federal and private student loan data. 2023 Private Education Loan market trends and College Board-Trends in Student Aid 2023 © 2023 data, and Enterval report. Other sources for the size of the Private Education Loan market exist and may cite the size of the market differently.
These results are submitted to the Bank’s prudential regulators at their request. 18 SLM CORPORATION — 2022 Form 10-K Deposit Insurance and Assessments Deposits at the Bank are insured up to the applicable legal limits by the FDIC-administered Deposit Insurance Fund (the “DIF”), which is funded primarily by quarterly assessments on insured banks.
Deposit Insurance and Assessments Deposits at the Bank are insured up to the applicable legal limits by the FDIC-administered Deposit Insurance Fund (the “DIF”), which is funded primarily by quarterly assessments on insured banks. An insured bank’s 2023 Form 10-K — SLM CORPORATION 17 assessment is calculated by multiplying its assessment rate by its assessment base.
The site also provides important information on benefits available to servicemembers under the Servicemembers Civil Relief Act (the “SCRA”). After graduation, a customer may apply for the cosigner to be released from the loan. This option is available after 12 principal and interest payments are made and the student borrower adequately meets our credit requirements.
The site also provides important information on benefits available to servicemembers under the Servicemembers Civil Relief Act (the “SCRA”). After graduation, a student borrower may apply for the cosigner to be released from the loan.
Under the regulations, if a regulator determines a bank fails to meet any prescribed standards, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.
Under the regulations, if a regulator determines a bank fails to meet any prescribed standards, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans. 14 SLM CORPORATION — 2023 Form 10-K Dividends and Share Repurchase Programs The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” for additional information about our credit administration practices. COVID-19 Response We are accommodating to customers who face special circumstances or have trouble making loan payments.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” for additional information about our credit administration practices.
Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed multistate litigation and investigation matters, as well as related lawsuits in which the Bank has been named as a party.
Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed investigation matters and the now resolved multistate litigation.
At December 31, 2022, we had $29 million in Credit Card receivables in loans held-for-sale. 2022 Form 10-K — SLM CORPORATION 5 Our Lending Philosophy Sallie Mae is committed to responsible lending and encourages responsible borrowing by advising students and families to follow this three-step approach to paying for college: Start with money you won’t have to pay back.
We recorded a loss of $4 million related to the sale in the second quarter of 2023. 2023 Form 10-K — SLM CORPORATION 5 Our Lending Philosophy Sallie Mae is committed to responsible lending and encourages responsible borrowing by advising students and families to follow this three-step approach to paying for higher education: Start with money you won’t have to pay back.
When we grant forbearance, we counsel customers on the effect forbearance will have on their loan balance. See Part II, Item 7.
These arrangements are suited to the customer’s individual circumstances and ability to make payments. When we grant forbearance, we counsel customers on the effect forbearance will have on their loan balance. See Part II, Item 7.
Department of Education’s projections released in November 2021, the enrollment is projected to remain relatively flat from 2020 to 2029. 2 ______________________ 1 Source: Enterval LLC 2022 Q3 Private Student Loan Report, November 2022. www.enterval.com 2 Source: U.S.
Department of Education’s projections, the enrollment in four-year degree granting institutions is projected to remain relatively flat from 2022 to 2031. 2 ______________________ 1 Source: Enterval LLC 2023 Q3 Private Student Loan Report, November 2023. www.enterval.com 2 Source: U.S. Department of Education, National Center for Education Statistics, Enrollment in Degree-Granting Institutions Projection Model, through 2031.
Neither SLM, the Bank, nor any of their current subsidiaries are named in, or otherwise a party to, the lawsuit and are not alleged to have engaged in any wrongdoing.
The complaint alleges these Navient entities, among other things, engaged in deceptive practices with respect to their historic servicing and debt collection practices. Neither SLM, the Bank, nor any of their current subsidiaries are named in, or otherwise a party to, the lawsuit and are not alleged to have engaged in any wrongdoing.
At December 31, 2022, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows: Transition Amounts Adjustments for the Year Ended Adjustments for the Year Ended Phase-In Amounts for the Year Ended Remaining Adjusted Transition Amounts to be Phased-In (Dollars in thousands) January 1, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2022 Retained earnings $ 952,639 $ (57,859) $ (58,429) $ (209,088) $ 627,263 Allowance for credit losses 1,143,053 (55,811) (49,097) (259,536) 778,609 Liability for unfunded commitments 115,758 (2,048) (9,333) (26,094) 78,283 Deferred tax asset 306,171 — — (76,542) 229,629 Stress Testing Requirements The Bank is not currently subject to stress testing requirements under the Dodd-Frank Act.
At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows: Adjusted Transition Amounts Phase-In Amounts for the Year Ended Phase-In Amounts for the Year Ended Remaining Adjusted Transition Amounts to be Phased-In (Dollars in thousands) December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2023 Retained earnings $ 836,351 $ (209,088) $ (209,088) $ 418,175 Allowance for credit losses 1,038,145 (259,536) (259,536) 519,073 Liability for unfunded commitments 104,377 (26,094) (26,094) 52,189 Deferred tax asset 306,171 (76,542) (76,542) 153,087 Stress Testing Requirements The Bank is not currently subject to stress testing requirements under the Dodd-Frank Act.
Key Drivers of Private Education Loan Market Growth The size of the Private Education Loan market is based primarily on three factors: college enrollment levels, the costs of attending college, and the availability of funds from the federal government to pay for a college education.
The addition of Scholly assets supports our mission of providing students with the confidence needed to successfully navigate the higher education journey. 2023 Form 10-K — SLM CORPORATION 7 Key Drivers of Private Education Loan Market Growth The size of the Private Education Loan market is based primarily on three factors: college enrollment levels, the costs of attending college, and the availability of funds from the federal government to pay for a college education.
We simplify the college planning process by providing tools, resources, and information to help students and families make informed decisions and to improve access and support college completion through our scholarship programs and responsible financing options. We believe education, in all forms, is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility.
We simplify the college planning process and advance higher education access and completion by providing free tools, resources, scholarships, and responsible financing options. We believe education, in all forms, is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility. Higher education increases lifetime wages and enables economic mobility. For example, data from the U.S.
Under this authority, the Bank’s regulators can require it to enter into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements, and consent or cease and desist orders, pursuant to which the Bank would be required to take identified corrective actions to address cited concerns and refrain from taking certain actions.
Under this authority, the Bank’s regulators can require it to enter into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements, and consent or cease and desist orders, pursuant to which the Bank would be required to take identified corrective actions to address cited concerns and refrain from taking certain actions. 2023 Form 10-K — SLM CORPORATION 13 Enforcement Powers of Regulators As “institution-affiliated parties” of the Bank, we, our non-bank subsidiaries, and our management, employees, agents, independent contractors, and consultants are subject to potential civil and criminal penalties for violations of law, regulations, or written orders of a government agency.
On October 20, 2021, we announced a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.
This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.
The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement entered into by the Company and Navient in connection with the Spin-Off (the “Separation and Distribution Agreement”).
The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement.
Nitro provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.
In 2022, we acquired the assets of Epic Research Education Services, LLC, which did business as Nitro College (“Nitro”). Nitro provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.
The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue in the Multi-State Investigation and in the above-described lawsuits. 2022 Form 10-K — SLM CORPORATION 15 Standards for Safety and Soundness The Federal Deposit Insurance Act requires the federal banking regulatory agencies such as the FDIC to prescribe, by regulation or guidance, operational and managerial standards for all insured depository institutions, such as the Bank, relating to internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, and asset quality.
Standards for Safety and Soundness The Federal Deposit Insurance Act requires the federal banking regulatory agencies such as the FDIC to prescribe, by regulation or guidance, operational and managerial standards for all insured depository institutions, such as the Bank, relating to internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, and asset quality.
We regularly review and update the terms of our Private Education Loan products. As a holder of Private Education Loans, we bear the full credit risk of the customers. We manage this risk by underwriting and pricing based on customized credit scoring criteria and the addition of qualified cosigners.
We manage this risk by underwriting and pricing based on customized credit scoring criteria and the addition of qualified cosigners.
Other sources for the size of the Private Education Loan market exist and may cite the size of the market differently. The College Board restates its data annually, which may cause previously reported results to vary.
The College Board restates its data annually, which may cause previously reported results to vary.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf those liabilities are significant, they could adversely affect our business and financial condition. • The Bank is subject to various regulatory capital requirements, and failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on our business, results of operations, and/or financial condition. 2022 Form 10-K — SLM CORPORATION 23 • Unfavorable results from the periodic stress scenarios we model under regulatory guidance may adversely affect our business and result in regulatory action that could adversely affect our cost of capital and liquidity position. • Changes in accounting standards, or incorrect estimates and assumptions by management in connection with the preparation of our consolidated financial statements, could adversely affect our capital levels, results of operation, and/or financial condition. • We operate in a highly regulated environment and the laws and regulations that govern our operations, or changes in these laws and regulations, or our failure to comply with them, may adversely affect us. • Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and requirements could subject us to civil and criminal penalties or litigation, including class actions, and have a material adverse effect on our business. • Our framework for managing risks, including model risk and data governance risk, may not be effective in mitigating our risk of loss and, if the framework is ineffective, could have a material adverse effect on us and our business. • Proposals of federal and state governments, or of various political candidates, affecting the student loan industry in particular, such as proposals for new federal education spending designed to make higher education “free” or substantially so regardless of financial need, subject us to political risk and could have a material adverse impact on us. • We are subject to reputational risk, including risk arising from environmental, social, and governance matters or other areas or events, which could damage our brand and have a material adverse impact on our business, results of operations, financial condition, and/or cash flows. • Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or damage our reputation. • We could lose market share if we are not able to keep pace with rapid changes in technology. • We depend on secure information technology and a breach of those systems or those of third-party vendors could materially adversely affect our business, financial condition, and/or results of operations and could lead to significant financial, legal, and reputational exposure. • We depend significantly on third parties for a wide array of our operations and customer services and key components of our information technology infrastructure, and a breach of security or service levels, or violation of law by one of these third parties, could disrupt our business. • We may face risks from our operations related to litigation or regulatory or supervisory actions that could result in significant legal expenses and settlement or damage awards. • Our internal controls over financial reporting and disclosure controls may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations. • Our business operations and those of our third-party vendors may be adversely impacted by unpredictable catastrophic events. • Our ability to successfully make acquisitions is subject to significant risks. • The pandemic caused by COVID-19 and resulting adverse economic conditions have adversely impacted our business and results and, in the future, could have a more material adverse impact on our business, results of operations, financial condition, and/or cash flows.
Biggest changeIf those liabilities are significant, they could adversely affect our business and financial condition. • Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial condition and results of operations. • The Bank is subject to various regulatory capital requirements, and failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on us. 2023 Form 10-K — SLM CORPORATION 21 • Unfavorable results from the periodic stress scenarios we model under regulatory guidance may adversely affect our business and result in regulatory action that could adversely affect us. • Changes in accounting standards, or incorrect estimates and assumptions by management in connection with the preparation of our consolidated financial statements, could adversely affect us. • We operate in a highly regulated environment and the laws and regulations that govern our operations, or changes in these laws and regulations, or our failure to comply with them, may adversely affect us. • Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and requirements could subject us to civil and criminal penalties or litigation, including class actions, and have a material adverse effect on our business. • Our framework for managing risks, including model risk and data governance risk, may not be effective in mitigating our risk of loss and, if the framework is ineffective, could have a material adverse effect on us. • Proposals of federal and state governments, or of various political candidates, affecting the student loan industry in particular subject us to political risk and could have a material adverse impact on us. • We are subject to reputational risk, including risk arising from environmental, social, and governance matters or other areas or events, which could damage our brand and have a material adverse impact on us. • Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or damage our reputation. • We could lose market share if we are not able to keep pace with rapid changes in technology. • We depend on secure information technology and a breach of those systems or those of third-party vendors could materially adversely affect us and lead to significant financial, legal, and reputational exposure. • We depend significantly on third parties for a wide array of our operations and customer services and key components of our information technology infrastructure, and a breach of security or service levels, or violation of law by one of these third parties, could disrupt our business. • We may face risks from our operations related to litigation or regulatory or supervisory actions that could result in significant legal expenses and settlement or damage awards. • Our internal controls over financial reporting and disclosure controls, as well as other internal controls, may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations. • Our business operations and those of our third-party vendors may be adversely impacted by unpredictable catastrophic events. • New lines of business and our ability to successfully make acquisitions are subject to significant risks. • Because of Navient’s indemnification obligations, we have significant exposures to risks related to its creditworthiness. • The holders of our preferred stock have rights that are senior to those of our common shareholders. • We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our common stock, and make payments on our corporate debt. • Our business could be negatively affected if we are unable to attract, retain, and motivate skilled employees. 22 SLM CORPORATION — 2023 Form 10-K RISK FACTORS We face many risks and uncertainties, any one or more of which could have a material adverse effect on our business, financial condition (including capital and liquidity), results of operations, cash flows, and/or stock price.
Our reputation as an originator, servicer, and securitizer of high-quality Private Education Loans and as a depository for online deposits is very dependent upon how our customers, our regulators, legislators, the education community, our employees, and the broader market perceive our business practices, financial heath, and integrity, and the business practices, financial health, and integrity of the overall student loan market, other loan markets, or the market for online deposits, as applicable.
Our reputation as an originator, servicer, seller, and securitizer of high-quality Private Education Loans and as a depository for online deposits is very dependent upon how our customers, our regulators, legislators, the education community, our employees, and the broader market perceive our business practices, financial heath, and integrity, and the business practices, financial health, and integrity of the overall student loan market, other loan markets, or the market for online deposits, as applicable.
We are required to measure our allowance for credit losses based on our estimate of all current expected credit losses (“CECL”) over the remaining contractual term of the assets. The CECL standard resulted in a significant change in how we recognize credit losses and has had a material impact on our financial condition, results of operations, and capital levels.
We are required to measure our allowance for credit losses based on our estimate of all current expected credit losses over the remaining contractual term of our assets. The CECL standard resulted in a significant change in how we recognize credit losses and has had a material impact on our financial condition, results of operations, and capital levels.
Our ability to sell loans at attractive prices, as well as the timing and volume of any sales, will be subject to market conditions, and there can be no guarantee that we will be able to effectuate planned loan sales at the prices, times, or volumes we desire, or at all.
Our ability to sell loans at attractive prices, as well as the timing and volume of any sales, will be subject to market conditions, and there can be no guarantee that we will be able to effectuate planned or unplanned loan sales at the prices, times, or volumes we desire, or at all.
Our ability to successfully make acquisitions is subject to significant risks, including the risk that governmental authorities may not provide any requisite approvals, the risk that integrating acquisitions may be more difficult, costly, or time consuming than expected, and the risk that the value of acquisitions may be less than anticipated.
Additionally, our ability to successfully make acquisitions is subject to significant risks, including the risk that governmental authorities may not provide any requisite approvals, the risk that integrating acquisitions may be more difficult, costly, or time consuming than expected, and the risk that the value of acquisitions may be less than anticipated.
Any of the unpredictable catastrophic events discussed above could affect the stability of our deposit base, impair the ability of our borrowers to repay their outstanding loans, cause significant property damage, and result in loss of revenue and/or cause us to incur additional expenses.
Any of the unpredictable catastrophic events discussed above could affect the stability of our deposit base, impair the ability of our borrowers and cosigners to repay their outstanding loans, cause significant property damage, and result in loss of revenue and/or cause us to incur additional expenses.
We are subject to the creditworthiness of third parties other than borrowers and exposure to those third parties could adversely affect our business, financial condition, results of operations, and/or cash flows. We are also subject to the creditworthiness of third parties, including various lending, investment, and derivative counterparties.
We are subject to the creditworthiness of third parties other than borrowers and exposure to those third parties could adversely affect our business, financial condition, results of operations, and/or cash flows. We are also subject to the creditworthiness of third parties, including various lending, securitization, investment, and derivative counterparties.
Our business operations and those of our third-party vendors are subject to interruption by, among other things, geopolitical events, terrorism, cyberattacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes, and other unpredictable catastrophic events, which could decrease demand for our products and services or make it difficult or impossible for us to deliver a satisfactory experience to our customers.
Our business operations and those of our third-party vendors are subject to interruption by, among other things, geopolitical events, terrorism, cyberattacks, public health issues (including pandemics), natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes, and other unpredictable catastrophic events, which could decrease demand for our products and services or make it difficult or impossible for us to deliver a satisfactory experience to our customers.
Cyberattacks targeted at our service providers or in other areas of the supply chain may result in unauthorized interception, misuse, mishandling, access, acquisition, loss, or destruction of our or our customers’ data, or other cyber incidents that may affect the availability of our services, and impose costs and other liabilities that significantly and adversely affect us in the ways discussed above.
Cyberattacks targeted at our service providers or in other areas of our business chain may result in unauthorized interception, misuse, mishandling, access, acquisition, loss, or destruction of our or our customers’ data, or other cyber incidents that may affect the availability of our services, and impose costs and other liabilities that significantly and adversely affect us in the ways discussed above.
We require liquidity to meet cash requirements for such things as day-to-day operating expenses, funding of our Private Education Loan originations, deposit withdrawals and maturities, payment of any declared dividends on our preferred stock and common stock, and payment for any shares of common stock acquired under any common stock repurchase program or otherwise.
We require liquidity to meet cash requirements for such things as day-to-day operating expenses, funding of our Private Education Loan originations, deposit withdrawals and maturities, payment of any declared dividends on our preferred stock and common stock, payment of our debt service, and payment for any shares of common stock or preferred stock acquired under any stock repurchase program or otherwise.
GENERAL RISKS The holders of our preferred stock have rights that are senior to those of our common shareholders. At December 31, 2022, we had issued and outstanding 2.5 million shares of our Series B Preferred Stock. Our Series B Preferred Stock is senior to our shares of common stock in right of payment of dividends and other distributions.
GENERAL RISKS The holders of our preferred stock have rights that are senior to those of our common shareholders. At December 31, 2023, we had issued and outstanding 2.5 million shares of our Series B Preferred Stock. Our Series B Preferred Stock is senior to our shares of common stock in right of payment of dividends and other distributions.
The enactment of any of the proposed legislation or policies described above, even if they do not apply specifically to Private Education Loans, could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
The enactment of any proposed legislation or policies like those described above, even if they do not apply specifically to Private Education Loans, could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
Our business operations and those of our third-party vendors may be adversely impacted by political events, terrorism, cyberattacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes, business interruptions, and other unpredictable catastrophic events .
Our business operations and those of our third-party vendors may be adversely impacted by political events, terrorism, cyberattacks, public health issues (including pandemics), natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes, business interruptions, and other unpredictable catastrophic events .
Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies of governmental agencies, general economic conditions, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future.
Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies of governmental agencies, general economic conditions, conditions in the capital markets, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future.
Our internal controls over financial reporting and disclosure controls may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations. Our management is responsible for maintaining, regularly assessing and, as necessary, making changes to our internal controls over financial reporting and our disclosure controls.
Our internal controls over financial reporting and disclosure controls, as well as other internal controls, may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations. Our management is responsible for maintaining, regularly assessing and, as necessary, making changes to our internal controls over financial reporting and our disclosure controls.
We may from time to time seek to acquire other financial services companies or businesses that complement our business strategy.
We also may from time to time seek to acquire other financial services companies or businesses that complement our business strategy.
However, increasing amounts of private education consolidation loans at interest rates below those of our existing portfolio - whether from private sources (including financial technology (“FinTech”) companies) or otherwise - can contribute to an increase in the prepayment rates of our existing Private Education Loans and, if prolonged and continuous, could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows.
However, increasing amounts of private education consolidation loans at interest rates below those of our existing portfolio - whether from private sources (including FinTech companies) or otherwise - can contribute to an increase in the prepayment rates of our existing Private Education Loans and, if prolonged and continuous, could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows.
In addition, our ability to maintain existing balances of all deposit types or obtain additional deposits of any type may be affected by factors, including those beyond our control, such as a rising stock market, more attractive returns on alternative investments, perceptions about our existing and future financial strength, quality of deposit servicing or online banking generally, changes in monetary or fiscal policies that influence deposit or other rates, and general economic conditions, including high unemployment and decreased savings rates.
In addition, our ability to maintain existing balances of all deposit types or obtain additional deposits of any type may be affected by factors, including those beyond our control, such as a rising stock market, more attractive returns on alternative investments, perceptions about our existing and future financial strength, quality of deposit servicing or online banking generally, changes in monetary or fiscal policies that influence deposit or other rates, general economic conditions, including high unemployment and decreased savings rates, and adverse developments in the financial services industry generally.
This patchwork of legislation and regulation may lead to conflicts or differing views of personal privacy rights. As an example, certain state laws regarding personal information may be broader in scope or more stringent than federal laws or the laws of other states regarding personal information.
This patchwork of legislation and regulation may lead to conflicts or differing views of privacy rights. As an example, certain state laws regarding personal information may be broader in scope or more stringent than federal laws or the laws of other states regarding personal information. See Item 1.
Deposits are issued with both fixed and variable rates, and the average term is typically shorter than the expected term of our combined loan portfolios. The different interest rate and maturity characteristics of our loan portfolio and the liabilities funding that portfolio result in fluctuations in our net interest income.
Deposits are issued with both fixed and variable rates, and the average term is typically shorter than the expected term of our combined loan portfolios. The different interest rate and maturity characteristics of our loan portfolios and the liabilities funding those portfolios result in fluctuations in our net interest income.
We are also subject to a dynamically changing landscape of privacy, data protection, and cybersecurity laws, regulations, and requirements. Various federal and state regulators, including governmental agencies, have adopted, or are considering adopting, laws and regulations regarding personal information and data privacy and security.
We are also subject to a dynamically changing landscape of privacy, data protection, and cybersecurity laws, regulations, and requirements. Various federal and state regulators, including governmental agencies, have adopted, or are considering adopting, laws and regulations regarding the use and disclosure of personal information and data privacy and security.
Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position. • Consumer access to alternative means of financing the costs of education and other factors may reduce demand for, or adversely affect our ability to retain, Private Education Loans, which could have a material adverse effect us. • Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows. • Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial position, results of operations, and/or cash flows. • Our allowance for credit losses may not be adequate to cover actual losses, which may adversely affect our capital, financial condition, and/or results of operations. • We are subject to the creditworthiness of third-parties other than borrowers and exposure to those third parties could adversely affect our business, financial condition, results of operations, and/or cash flows. • The levels of or changes in interest rates could adversely affect our results of operations, financial condition, regulatory capital, and/or liquidity. • The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and maturity characteristics of our funding arrangements, which may negatively impact the level of our net interest income.
Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position. • Consumer access to alternative means of financing the costs of education and other factors may reduce demand for, or adversely affect our ability to retain, Private Education Loans, which could have a material adverse effect on us. • Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows. • Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial condition, results of operations, and/or cash flows. • Our allowance for credit losses may not be adequate to cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition, and/or results of operations. • We are subject to the creditworthiness of third parties other than borrowers and exposure to those third parties could adversely affect our business, financial condition, results of operations, and/or cash flows. • The levels of or changes in interest rates could adversely affect our results of operations, financial condition, regulatory capital, and/or liquidity. • The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and maturity characteristics of our funding arrangements.
Intended to protect clients, depositors, the DIF, and the overall financial system, these laws, regulations, and supervisory actions may, among other matters: • increase minimum capital requirements; • reclassify the types of assets we hold for regulatory capital purposes, including for risk-weightings; • limit the rates of growth of our business; • impose limitations on the business activities in which we can engage; • limit the dividends or distributions the Bank can pay to us; • limit share repurchases; • restrict the payment of discretionary bonuses to executive officers; • restrict the ability of institutions to guarantee our debt; • limit proprietary trading and investments in certain private funds; • impose certain specific accounting requirements on us that may be more restrictive; • result in changes from time to time in our practices, policies, procedures, and personnel in various areas of our business (including, without limitation, practices and policies regarding the dischargeability of certain Private Education Loans in the event of a borrower’s bankruptcy); and • result in greater or earlier charges to earnings or reductions in our capital.
Intended to protect clients, depositors, the DIF, and the overall financial system, these laws, regulations, and supervisory actions may, among other matters: • increase minimum capital requirements; • reclassify the types of assets we hold for regulatory capital purposes, including for risk-weightings; • limit the rates of growth of our business; • impose limitations on the business activities in which we can engage; • limit the dividends or distributions the Bank can pay to us; • limit share repurchases; • restrict the payment of discretionary bonuses to executive officers; • restrict the ability of institutions to guarantee our debt; • limit proprietary trading and investments in certain private funds; • impose certain specific accounting requirements on us that may be more restrictive; • result in changes from time to time in our practices, policies, procedures, and personnel in various areas of our business (including, without limitation, practices and policies regarding the dischargeability of certain Private Education Loans in the event of a borrower’s bankruptcy); • enhance restrictions regarding money laundering and the financing of terrorism; • enhance requirements related to risk management and corporate governance; and • result in greater or earlier charges to earnings or reductions in our capital.
Acquisitions involve numerous risks and uncertainties, including inaccurate financial and operational assumptions, incomplete or failed due diligence, lower-than-expected performance, higher-than-expected costs, difficulties related to integration, diversion of management’s attention from other business activities, adverse market or other reactions, changes in relationships with customers or counterparties, the potential loss of key personnel, and the possibility of litigation and other disputes.
Acquisitions and/or implementation of new lines of business, products, or services involve numerous risks and uncertainties, including inaccurate financial and operational assumptions, incomplete or failed due diligence, lower-than-expected performance, higher-than-expected costs, difficulties related to integration, diversion of management’s attention from other business activities, adverse market or other reactions, changes in relationships with customers or counterparties, the potential loss of key personnel, and the possibility of litigation and other disputes.
Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position. At December 31, 2022, approximately 70 percent of our total assets, and 84 percent of our total assets excluding cash and cash equivalents, were comprised of Private Education Loans.
Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position. At December 31, 2023, approximately 72 percent of our total assets, and 84 percent of our total assets excluding cash and cash equivalents, were comprised of Private Education Loans.
As part of our underwriting process, we rely heavily upon information supplied by applicants and third parties. If any of this information is intentionally or negligently misrepresented and is not detected by us before completing the transaction, we may experience increased credit risk.
As part of our underwriting process, we rely heavily upon information supplied by applicants and third parties. If any of this information is intentionally or negligently misrepresented, or is inaccurate, and is not detected by us before completing the transaction, or changes after we collect the information, we may experience increased credit risk.
The CFPB is the Bank’s primary consumer compliance supervisor, with exclusive authority to conduct examinations for the purposes of assessing compliance with the requirements of federal consumer financial laws and with primary consumer compliance enforcement authority. CFPB jurisdiction could result in additional regulation and supervision, which could increase our costs and limit our ability to pursue business opportunities.
The CFPB is the Bank’s primary consumer compliance supervisor, with exclusive authority to conduct examinations for the purposes of assessing compliance with the requirements of federal consumer financial laws and with primary consumer compliance enforcement authority. CFPB jurisdiction, regulation, and supervision could increase our costs and limit our ability to pursue business opportunities.
Following announcements by the United Kingdom’s Financial Conduct Authority (the “UKFCA”), which regulates LIBOR, the London interbank offered rate, and ICE Benchmark Administration Limited, the administrator of LIBOR, publication of 1-week and 2-month USD LIBOR and all tenors for other currencies ceased after December 31, 2021.
Following announcements by the United Kingdom’s Financial Conduct Authority (the “UKFCA”), which regulates LIBOR, the London interbank offered rate, and ICE Benchmark Administration Limited, the administrator of LIBOR, publication of 1-week and 2-month USD LIBOR and all tenors for other currencies ceased after December 31, 2021. Publication of the remaining USD settings ceased after June 30, 2023.
This concentration poses the risk that any disruption, dislocation, or other negative event or trend in the Private Education Loan market or the overall economic environment, including an inflationary and rising interest rate environment or a recession in the U.S., could disproportionately and adversely affect our business, financial condition, and results of operations.
This concentration poses the risk that any disruption, dislocation, significant adverse legislative or regulatory change, or other negative event or trend in the Private Education Loan market, the overall education loan market, or the overall economic environment, including an inflationary and rising or high interest rate environment or a recession in the U.S., could disproportionately and adversely affect our business, financial condition, and results of operations.
Third-party vendors are significantly involved in aspects of our servicing for Private Education Loans, FFELP Loans, Bank deposit-taking activities, payroll software and systems development, data center and operations, including the timely and secure transmission of information across our data communication network, and for “cloud” computing services and other 38 SLM CORPORATION — 2022 Form 10-K telecommunications, email, processing, storage, remittance, and technology-related services in connection with our business.
Third-party vendors are significantly involved in aspects of our servicing for Private Education Loans, FFELP Loans, Bank deposit-taking activities, payroll software and systems development, data center and operations, including the timely and secure transmission of information across our data communication network, and for “cloud” computing services and other telecommunications, email, processing, storage, remittance, and technology-related services in connection with our business.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital 2022 Form 10-K — SLM CORPORATION 27 Resources — Counterparty Exposure.” If our counterparties are unable to perform their obligations, or the ability of our counterparties to perform their obligations becomes less certain or impaired, the obligations of our counterparties to us or our investments in any counterparties or their securities could become impaired, which could have a material adverse impact on our business, financial condition, results of operations, and/or cash flows.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Counterparty Exposure.” If our counterparties are unable to perform their obligations, or the ability of our counterparties to perform their obligations becomes impaired or less certain, the obligations of our counterparties to us or our investments in any counterparties or their securities could become impaired, which could have a material adverse impact on our business, financial condition, results of operations, and/or cash flows.
An acquisition also could be dilutive to our existing stockholders if we were to issue common stock to fully or partially pay or fund the purchase price. Moreover, we may not be successful in identifying appropriate acquisition candidates, integrating acquired businesses or companies, or realizing expected value from acquisitions.
An acquisition also could be dilutive to our existing stockholders if we were to issue common stock to fully or partially pay or fund the purchase price. Moreover, we may not be successful in identifying appropriate acquisition candidates, integrating acquired businesses or companies, or realizing expected value from acquisitions or new lines of business, products, or services.
Our Private Education Loan (held for investment) delinquencies (loans greater than 30 days past due), as a percentage of Private Education Loans (held for investment) in repayment, were 3.8 percent at December 31, 2022.
Our Private Education Loan (held for investment) delinquencies (loans greater than 30 days past due), as a percentage of Private Education Loans (held for investment) in repayment, were 3.90 percent at December 31, 2023.
While the assets, liabilities, and related hedging derivative contract re-pricing indices are typically highly correlated, there can be no assurance that the historically high correlation will not be disrupted by capital market dislocations or other factors outside our control. In these circumstances, our earnings could be materially adversely affected.
While the assets, liabilities, and related hedging derivative contract re-pricing indices are typically highly correlated, there 26 SLM CORPORATION — 2023 Form 10-K can be no assurance that the historically high correlation will not be disrupted by capital market dislocations or other factors outside our control. In these circumstances, our earnings could be materially adversely affected.
As a result of 32 SLM CORPORATION — 2022 Form 10-K changes to financial accounting or reporting standards, whether promulgated or required by the FASB or other regulators, we could be required to change certain of the assumptions or estimates we have previously used in preparing our financial statements, which could negatively impact how we record and report our financial condition, results of operations, and capital levels.
As a result of changes to financial accounting or reporting standards, whether promulgated or required by the FASB or other regulators, we could be required to change certain of the assumptions or estimates we have previously used in preparing our financial statements, which could negatively impact how we record and report our financial condition, results of operations, and capital levels.
If we are a party to material litigation or regulatory or supervisory actions and if the defenses we assert are ultimately unsuccessful, or if we are unable to achieve a favorable outcome, we could be liable for large damages, penalties, or other costs or charge-offs and that could have a material adverse effect on our business, results of operations, and/or financial condition.
If we are a party to material litigation or regulatory or supervisory actions and if the defenses we assert are ultimately unsuccessful, or if we are unable to achieve a favorable outcome, we could be liable for large damages, penalties, 36 SLM CORPORATION — 2023 Form 10-K or other costs or charge-offs and that could have a material adverse effect on our business, results of operations, and/or financial condition.
In addition, changes to search engines and deposit information aggregators’ methodologies and business practices could result in a decline in our new deposit growth or existing customer 2022 Form 10-K — SLM CORPORATION 25 retention. Increased competition for deposits could cause our cost of funds to increase, which could negatively impact our loan pricing and net interest margin.
In addition, changes to search engines and deposit information aggregators’ methodologies and business practices could result in a decline in our new deposit growth or existing customer retention. Increased competition for deposits could cause our cost of funds to increase, which could negatively impact our loan pricing and net interest margin.
We fund Private Education Loan originations through asset-backed securitizations and deposits raised by the Bank, including term and liquid brokered and retail deposits, as well as Educational 529 and Health Savings Account deposits.
We fund Private Education Loan originations through asset-backed securitizations and deposits raised by the Bank, including term and liquid brokered and retail deposits, as well as Educational 529 and Health Savings Account deposits, and with proceeds received from loan sales.
Additionally, regulatory agencies may periodically review our allowance for credit losses, including our methodology and models used in calculating the allowance, and could insist on an increase in the allowance or recognition of additional charge-offs based on judgments different than those used by our management.
Additionally, regulatory agencies may periodically review our allowance for credit losses, including our methodology and models used in calculating the allowance, and could 2023 Form 10-K — SLM CORPORATION 25 insist on an increase in the allowance or recognition of additional charge-offs based on judgments different than those used by our management.
POLITICAL/REPUTATIONAL RISK Proposals of federal and state governments, or of various political candidates, affecting the student loan industry in particular, such as proposals for new federal education spending designed to make higher education “free” or substantially so regardless of financial need, or to create new federally funded programs to refinance private student loans, subject us to political risk and could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
POLITICAL/REPUTATIONAL RISK Proposals of federal and state governments, or of various political candidates, affecting the student loan industry in particular, such as proposals for new federal education spending designed to make higher education “free” or substantially so regardless of financial need, or to create new federally funded programs to refinance private student loans, or to require private student loan lenders to reform loan agreements to provide for income-driven repayment plans and other payment plans, subject us to political risk and could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
In addition, we or our service providers may be unable to identify, or may be significantly delayed in identifying, cyberattacks and incidents due to the increasing use of techniques and tools that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic artifacts.
In addition, we or our service providers may be unable to identify, or may be significantly 2023 Form 10-K — SLM CORPORATION 35 delayed in identifying, cyberattacks and incidents due to the increasing use of techniques and tools that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic artifacts.
An inability to effectively manage our liquidity could negatively impact our ability to fund our business obligations and opportunities, which could have a material adverse effect on us. • In structuring and facilitating securitizations or sales of Private Education Loans, administering securitization trusts, or servicing loans we have securitized or sold, we may incur liabilities to transaction parties.
An inability to effectively manage our liquidity could have a material adverse effect on us. • In structuring and facilitating securitizations or sales of Private Education Loans, administering securitization trusts, or servicing loans we have securitized or sold, we may incur liabilities to transaction parties.
(This differs significantly from the “incurred loss” model, which was in effect during 2019 and delayed recognition until it was probable a loss had been incurred.) Our models take into account historical loss experience in various economic conditions to estimate expected future losses based upon future economic forecasts over a period of time (“reasonable and supportable period”), at which point we revert expected losses to our historical rates.
(This differs significantly from the “incurred loss” model, which was in effect prior to our adoption of CECL and delayed recognition until it was probable a loss had been incurred.) Our models take into account historical loss experience in various economic conditions to estimate expected future losses based upon future economic forecasts over a period of time (“reasonable and supportable period”), at which point we immediately revert our forecasted economic factors to long-term historical loss conditions.
In addition, our ability to grow Private Education Loan originations and retain assets at our planned levels could be negatively affected if: • demographic trends in the United States result in a decrease in college-age individuals; • demand for higher education decreases (which can occur, among other times, during periods of strong employment in the United States); • the cost of attendance of higher education decreases; • consumers increase their targeted savings for higher education; • prepayment rates on our Private Education Loans increase or accelerate due to greater market liquidity, availability of alternative means of financing, improved household incomes, increasing consumer confidence, and/or various other factors; • there is broader public resistance to increasing higher education costs; or • proposals for new federal and state education spending described below in “—POLITICAL/REPUTATIONAL RISK” gain broader appeal or momentum.
In addition, our ability to grow Private Education Loan originations and retain assets at our planned levels could be negatively affected if: • demographic trends in the United States result in a decrease in college-age individuals; • demand for higher education decreases (which can occur, among other times, during periods of strong employment in the United States and/or when fewer employers require college degrees for their employees); • the cost of attendance of higher education decreases; • consumers increase their targeted savings for higher education; • prepayment rates on our Private Education Loans increase or accelerate due to greater market liquidity, availability of alternative means of financing, improved household incomes, increasing consumer confidence, and/or various other factors; • macroeconomic factors (including, without limitation, high unemployment) cause loan applicants or borrowers to be unable to meet our credit standards or repay credit obligations; • there is broader public resistance to increasing higher education costs; or • proposals for new federal and state education spending described below in “—POLITICAL/REPUTATIONAL RISK” gain broader appeal or momentum.
At December 31, 2022, our brokered deposits totaled $9.9 billion, which represented 46 percent of our total deposits. Brokered deposits may be more price sensitive than other types of deposits and may become less available if alternative investments offer higher returns.
At December 31, 2023, our brokered deposits totaled $10.3 billion, which represented 47 percent of our total deposits. Brokered deposits may be more price sensitive than other types of deposits and may become less available if alternative investments offer higher returns.
To the extent our competitors compete more aggressively or effectively, we could lose market share to them or subject our existing loans to consolidation or refinancing risk. In addition to competition with banks and other consumer lending institutions, the federal government, through the Federal Direct Student Loan Program (the “DSLP”), poses significant competition to our Private Education Loan products.
To the extent our competitors compete more aggressively or effectively, we could lose market share to them and/or our existing loans could be subject to consolidation or refinancing risk. In addition to competition from private industry players, the federal government, through the Federal Direct Student Loan Program (the “DSLP”), poses significant competition to our Private Education Loan products.
Any such failure could adversely affect our ability to service our customers, result in financial loss or liability to our customers and investors, disrupt our business, result in regulatory action or litigation, or cause reputational damage.
Any such failure could adversely affect our ability to service our customers, result in financial loss or liability to our customers and investors, disrupt our business, result in regulatory action or litigation, 34 SLM CORPORATION — 2023 Form 10-K or cause reputational damage.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on our business, results of operations, and/or financial condition. Under U.S.
CAPITAL RISK The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on our business, results of operations, and/or financial condition. Under U.S.
Several factors may have a material adverse effect on both our ability to obtain such funding and the time it takes us to structure and execute these transactions, including the following: • Persistent and prolonged disruption or volatility in the capital markets (which could occur as a result of, among other things, a government debt default or a government shutdown) or in the education loan ABS sector specifically; 30 SLM CORPORATION — 2022 Form 10-K • Degradation of the credit quality or performance of the Private Education Loans we sell or finance through securitization trusts, or adverse rating agency assumptions, rating actions, or conclusions with respect to those trusts or the education loan-backed securitization trusts sponsored by other issuers; • A material breach of our obligations to purchasers of our Private Education Loans, including securitization trusts; • The timing, pricing, and size of education loan asset-backed securitizations other parties issue, or the adverse performance of, or other problems with, such securitizations; • Challenges to the enforceability of Private Education Loans based on violations of, or changes to, federal or state consumer protection or licensing laws and related regulations, or imposition of penalties or liabilities on assignees of Private Education Loans for violation of such laws and regulations; and • Our inability to structure and gain market acceptance for new product features or services to meet new demands of ABS investors, rating agencies, or credit facility providers.
Several factors may have a material adverse effect on both our ability to obtain such funding and the time it takes us to structure and execute these transactions, including the following: • Persistent and prolonged disruption or volatility in the capital markets (which could occur as a result of, among other things, general economic conditions, a government debt default, or a government shutdown) or in the education loan ABS sector specifically; • Degradation of the credit quality or performance of the Private Education Loans we sell or finance through securitization trusts, or adverse rating agency assumptions, rating actions, or conclusions with respect to those trusts or the education loan-backed securitization trusts sponsored by other issuers; • A material breach of our obligations to purchasers of our Private Education Loans, including securitization trusts; • The timing, pricing, and size of education loan asset-backed securitizations other parties issue, or the adverse performance of, or other problems with, such securitizations; • Challenges to the enforceability of Private Education Loans based on violations of, or changes to, federal or state consumer protection or licensing laws and related regulations, or imposition of penalties or liabilities on assignees of Private Education Loans for violation of such laws and regulations; and • Our inability to structure and gain market acceptance for new product features or services to meet new demands of ABS investors, rating agencies, or credit facility providers. 28 SLM CORPORATION — 2023 Form 10-K If we require funding beyond that which we may be able to obtain through deposits and proceeds from ABS transactions at attractive prices, we may need to raise additional liquidity through other forms of secured and unsecured debt financing, which, in turn, could increase our funding costs and reduce our net interest margin.
These parties also may fraudulently 2022 Form 10-K — SLM CORPORATION 37 induce employees, customers, and others who use our or our service providers’ systems or have access to our or our customers’ data, to gain access to our and our customers’ data or our assets.
These parties also may fraudulently induce employees, customers, and others who use our or our service providers’ systems or have access to our or our customers’ data, to gain access to our and our customers’ data or our assets.
These adverse impacts may materially adversely affect our operations, our regulatory capital and liquidity position, the credit performance of our Private Education Loans and other assets, the number of borrowers seeking payment relief, our results of operations and financial condition, and/or our cash flows.
Many of these adverse impacts can occur in an inflationary and rising interest rate environment. These adverse impacts may materially adversely affect our operations, our regulatory capital and liquidity position, the credit performance of our Private Education Loans and other assets, the number of borrowers seeking payment relief, our results of operations and financial condition, and/or our cash flows.
In March 2022, the FDIC published proposed principles for climate risk management by “large financial institutions.” Although the Bank currently does not meet the definition of a “large financial institution” with over $100 billion in total consolidated assets, if it were ever to become subject to final principles in the future, such measures could result in the implementation of significant operational changes and 2022 Form 10-K — SLM CORPORATION 39 increased costs.
In October 2023, the FDIC finalized principles for climate risk management by “large financial institutions.” Although the Bank currently does not meet the definition of a “large financial institution” with over $100 billion in total consolidated assets, if it were ever to become subject to those principles in the future, such measures could result in the implementation of significant operational changes and increased costs.
Rising unemployment rates and the failure of our in-school borrowers to graduate are two of the most significant macroeconomic factors that could increase loan delinquencies, defaults, and loan modifications, or otherwise negatively affect performance of our existing education loan portfolios.
Rising unemployment rates and the failure of our in-school borrowers to graduate are two of the most significant macroeconomic factors that could increase loan delinquencies, defaults, and loan modifications, or otherwise negatively affect performance of our existing education loan portfolios, as such factors may cause borrowers and cosigners to experience trouble repaying credit obligations or meeting our credit standards.
In 2022, the Biden Administration proposed to forgive up to $20,000 in federal student loan indebtedness for certain borrowers. Also, various states have proposed and/or enacted legislation providing for “free” or “substantially free” higher education to residents of the state having incomes below a certain level and who attend publicly-funded universities in the state.
Also, various states have proposed and/or enacted legislation providing for “free” or “substantially free” higher education to residents of the state having incomes below a certain level and who attend publicly-funded universities in the state.
We compete in the Private Education Loan market with banks and other consumer lending institutions, many with strong consumer brand name recognition and greater financial resources. Many of those lenders also have a greater level of diversification in their mix of assets, which can enable them to be more competitive in uncertain or challenging economic times.
We compete with banks and other consumer lending institutions, many of whom have strong consumer brand name recognition, greater financial resources, and greater diversification in their mix of assets, which can enable them to be more competitive in their products and offerings, particularly in uncertain or challenging economic times.
Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations, as well as increased intensity in supervision, often impose additional costs and could result in additional charge-offs. The scope of the laws and regulations and the intensity of the supervision to which we are subject have increased in recent years.
Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations, as well as increased intensity in supervision, often impose additional costs and could result in additional charge-offs.
Any internal, market, or other developments, including those relating to our competitors or our business, that result in a negative impact on our brand or reputation or the reputation of the student loan industry or other relevant industries could have an adverse effect on our ability to originate, service, securitize, and retain Private Education Loans or other loans, as applicable, result in greater regulatory, legislative, and media scrutiny, increase our risk of litigation and regulatory sanctions or other actions, and have a material adverse effect on our financial condition and/or results of operations. 36 SLM CORPORATION — 2022 Form 10-K OPERATIONAL RISKS Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or damage our reputation.
Any internal, market, or other developments, including those relating to our competitors or our business, that result in a negative impact on our brand or reputation or the reputation of the student loan industry or other relevant industries could have an adverse effect on our ability to originate, service, sell, securitize, and retain Private Education Loans or other loans, as applicable, result in greater regulatory, legislative, and media scrutiny, increase our risk of litigation and regulatory sanctions or other actions, and have a material adverse effect on our financial condition and/or results of operations.
Pursuant to regulatory guidance, the Bank conducts annual capital stress tests, modeling systemic and company-specific stress scenarios. In 2022, the Bank conducted its annual capital stress tests and the results of these tests were presented to and reviewed by the Bank’s senior management, the Bank’s Board of Directors, and the Board’s Financial Risk Committee.
In 2023, the Bank conducted its annual capital stress tests and the results of these tests were presented to and reviewed by the Bank’s senior management, the Bank’s Board of Directors, and the Board’s Financial Risk Committee.
If our business objectives require capital above and beyond what we generate through retained earnings, we may need to raise capital for our business by issuing additional equity to investors.
We currently maintain sufficient risk-based capital through adequate retention and reinvestment of earnings from operations. If our business objectives require capital above and beyond what we generate through retained earnings, we may need to raise capital for our business by issuing additional equity to investors.
The market for online deposits is highly competitive, based primarily on a combination of reputation, rate, and availability of information about our deposit products. Our new depositor acquisition marketing is partly dependent on search engines, as well as bank deposit information aggregators, to direct a significant amount of traffic to our website via organic ranking and paid search advertising.
For instance, our new depositor acquisition marketing is partly dependent on search engines, as well as bank deposit information aggregators, to direct a significant amount of traffic to our website via organic ranking and paid search advertising.
We also must comply with certain provisions that are protective of the Series B Preferred Stock in order to effectuate any repurchases under our common stock share repurchase program. In the event of our bankruptcy, dissolution, or liquidation, the holders of our Series B Preferred Stock must be satisfied before any distributions can be made to our common shareholders.
Generally, we must be current on dividends payable to holders of our Series B Preferred Stock before any dividends can be paid on our common stock. We also must comply with certain provisions that are protective of the Series B Preferred Stock in order to effectuate any repurchases under our common stock share repurchase program.
The rising cost of higher education, questions regarding the quality of education provided, particularly among for-profit institutions, and the increasing amount of student loan debt outstanding in the 2022 Form 10-K — SLM CORPORATION 35 United States have prompted this heightened and ongoing scrutiny.
We operate in an environment of heightened political and regulatory scrutiny of education loan lending, servicing, and originations. The rising cost of higher education, questions regarding the quality of education provided, particularly among for-profit institutions, and the increasing amount of student loan debt outstanding in the United States have prompted this heightened and ongoing scrutiny.
Our bank competitors’ paid search activities, such as pay per click marketing, may result in their sites receiving higher paid search results than ours and significantly increasing the cost of such depositor acquisition for us.
Our bank competitors’ paid search activities, such as pay per click marketing, may result in their sites receiving higher search results than ours, thus 2023 Form 10-K — SLM CORPORATION 23 leading to significant increases in the cost of such depositor acquisition for us.
Moreover, our competition will increase as various lending institutions and other competitors, including Navient, through its Earnest subsidiary, enter or re-enter the Private Education Loan market. We also compete with FinTech companies (as defined below), many of whom have lower return hurdles than more traditional consumer lending institutions. We compete based on our brand products, origination capability, and customer service.
Moreover, we expect that our competition will increase as various lending institutions and other competitors, including Navient, through its Earnest subsidiary, enter or re-enter the Private Education Loan market. We compete based on our brand products, origination capability, and customer service.
Also, our ability to maintain our current level of deposits or grow our deposit base could be affected by regulatory restrictions, including the possible imposition by our regulators of prior approval requirements or restrictions on our offered rates, brokered deposit growth, or other areas.
See also “— Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial condition and results of operations.” Also, our ability to maintain our current level of deposits or grow our deposit base could be affected by regulatory restrictions, including the possible imposition by our regulators of prior approval requirements or restrictions on our offered rates, brokered deposit growth, or other areas.
Many factors can have an 26 SLM CORPORATION — 2022 Form 10-K impact on borrower delinquencies, including, without limitation, economic conditions (including inflationary, rising interest rate, and recessionary environments), changes in interest rates, personal circumstances and hardships, risk characteristics such as school type, loan status, loan seasoning, underwriting criteria, presence of a cosigner, changes made in credit administration practices from time to time, changes in loan underwriting criteria made from time to time, regulatory and operational changes, servicing and collections staffing challenges, other operational challenges we may encounter, and unforeseen events or trends.
Many factors can have an impact on borrower delinquencies, including, without limitation, economic conditions (including inflationary, rising or high interest rate, and recessionary environments), changes in interest rates, personal circumstances and hardships, risk characteristics such as school type, loan status, loan seasoning, underwriting criteria, presence of a cosigner, changes made in credit administration practices from time to time, changes in loan underwriting criteria made from time to time, legislative, regulatory and operational changes, servicing and collections staffing challenges, other operational challenges we may encounter, the cessation by the federal government in 2023 of its payment suspension program (initiated during the COVID-19 pandemic) for borrowers of federal student loans, the invalidation or failure of the Biden Administration’s effort to forgive federal student loan indebtedness for certain borrowers, and unforeseen events or trends.
In 2017, the ARRC identified the Secured Overnight Financing Rate (“SOFR”), which is a rate based on overnight U.S. Treasury repurchase agreement transactions, as its recommended alternative to USD LIBOR. The interest rates on our variable-rate Private Education Loans issued before April 1, 2021 and certain other assets are indexed to LIBOR.
In 2017, the ARRC identified the Secured Overnight Financing Rate (“SOFR”), which is a rate based on overnight U.S. Treasury repurchase agreement transactions, as its recommended alternative to USD LIBOR. In 2020, we began accepting certain deposits based on SOFR. In the second quarter of 2021, we began issuing variable-rate Private Education Loans that are indexed to SOFR.
Given the lack of empirical data on the credit and other financial risks posed by climate change, it is impossible to predict how climate change may impact our financial condition and operations.
Given the lack of empirical data on the credit and other financial risks posed by climate change, it is impossible to predict how climate change may impact our financial condition and operations. 2023 Form 10-K — SLM CORPORATION 37 New lines of business or new products and services may subject us to additional risks.
The use of marketplace lending sites is growing in popularity in the student loan sector. This new market channel may erode our more traditional lending channels and increase our cost to originate Private Education Loans.
We also compete with financial technology (“FinTech”) companies, many of whom have lower return hurdles than more traditional consumer lending institutions. The use of marketplace lending sites is growing in popularity in the student loan sector. This market channel may erode our more traditional lending channels and increase our cost to originate Private Education Loans.
If we are unable to effectuate loan sales at the prices, times, and volumes we desire, we may not be able to fund share repurchase programs that are authorized from time to time or achieve other business goals. We currently maintain sufficient risk-based capital through adequate retention and reinvestment of earnings from operations.
If we are unable to effectuate loan sales at the prices, times, and volumes we desire, we may not be able to fund share repurchase programs that are authorized from time to time, originate Private Education Loans in the volumes we desire, meet other obligations, or achieve other business goals.
The Bank’s capital adequacy and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors. U.S. Basel III is subject to further revisions and such revisions could affect the Bank’s capital requirements and adversely affect its business, results of operations, and financial condition.
The Bank’s capital adequacy and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.
LIQUIDITY RISK Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain funding through asset-backed securitizations, and, for at least the next few years, sell loans at attractive prices to help fund any share repurchase programs that may be authorized from time to time.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — LIBOR Transition” for further details. 2023 Form 10-K — SLM CORPORATION 27 LIQUIDITY RISK Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain funding through asset-backed securitizations, and sell loans at attractive prices to help fund any share repurchase programs that may be authorized from time to time.
In the second quarter of 2021, we began issuing variable-rate Private Education Loans that are indexed to SOFR. In 2022, we began issuing ABS that are indexed to SOFR and renewed the Secured Borrowing Facility with an index based on SOFR.
In 2022, we began issuing ABS that are indexed to SOFR and renewed our education loan-backed multi-lender secured borrowing facility (the “Secured Borrowing Facility”) with an index based on SOFR.
As a result, any enforcement or other supervisory action could have an adverse effect on our business, financial condition, results of operations, and prospects. Restrictions or limitations on our operations, or other directives, imposed by our regulators may be confidential and thus, in some instances, we may not be permitted to publicly disclose the actions.
Restrictions or limitations on our operations, or other directives, imposed by our regulators may be confidential and thus, in some instances, we may not be permitted to publicly disclose the actions.
The current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased.
The occurrence of any such event could have a material adverse impact on our business, financial condition, results of operations, and/or cash flows. The current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased.
In addition, increases in employment levels, wages, family income, alternative sources of financing, and government support for student loan borrowers during times of crisis or otherwise, such as during the COVID-19 pandemic or the forgiveness for certain borrowers of federal student loan indebtedness, may also contribute to higher-than-expected prepayment rates, which can adversely affect our interest rate and repricing risk and our financial condition and results of operations. 28 SLM CORPORATION — 2022 Form 10-K Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings.
In addition, increases in employment levels, wages, family income, alternative sources of financing, and government support for student loan borrowers or the forgiveness for certain borrowers of federal student loan indebtedness, may also contribute to higher-than-expected prepayment rates, which can adversely affect our interest rate and repricing risk and our financial condition and results of operations.
We are also subject to repayment and prepayment risks, which can increase uncertainty and adversely affect our business. • Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings. • The transition from LIBOR to alternative reference “benchmark” interest rates has no precedent, its impact is uncertain, and it could adversely affect the value of or the interest rates on our assets and obligations indexed to LIBOR, as well as the revenue and expenses associated with those assets and obligations. • Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain funding through asset-backed securitizations, and, for at least the next few years, sell loans at attractive prices to help fund any share repurchase programs that may be authorized from time to time.
These can increase uncertainty and adversely affect our business, financial condition, results of operations, and/or cash flows. • Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings. • The discontinuance of LIBOR could adversely affect our business and financial results. • Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain funding through asset-backed securitizations, and sell loans at attractive prices to help fund any share repurchase programs that may be authorized from time to time.
We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our common stock, and make payments on our corporate debt. The declaration and payment of future common stock dividends, as well as the amount thereof, are subject to determination by, and the discretion of, our Board of Directors.
The declaration and payment of future common stock dividends, as well as the amount thereof, are subject to determination by, and the discretion of, our Board of Directors.
If they were to default at rates much higher than anticipated or at speeds faster than anticipated, our business, financial position, results of operations, and/or cash flows could be adversely affected. Delinquencies are an important indicator of the potential future credit performance of our loan portfolios.
We bear the full credit exposure on our Private Education Loans, which are unsecured loans. If those loans were to default at rates much higher than anticipated or at speeds faster than anticipated, our business, financial condition, results of operations, and/or cash flows could be adversely affected.
Moreover, since 2010, a number of bills have been introduced in the United States Congress to promote federal financing for consolidation or refinancing of existing student loans. The regulatory environment at the state level has shifted such that many states recently have enacted new legislation specifically restricting the conduct and practices of student loan servicers.
The regulatory environment at the state level has shifted such that many states recently have enacted new legislation specifically restricting the conduct and practices of student loan servicers.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table lists the principal facility owned by us as of December 31, 2022: Location Function Approximate Square Feet Newark, DE Headquarters 160,000 42 SLM CORPORATION — 2022 Form 10-K The following table lists the principal facilities leased by us as of December 31, 2022: Location Function Approximate Square Feet Indianapolis, IN Administrative Offices 115,000 New Castle, DE Loan Servicing Center 125,000 Sterling, VA Administrative Offices 27,000 Newton, MA Administrative Offices 14,000 Salt Lake City, UT Sallie Mae Bank 17,000 The facility that we own is not encumbered by a mortgage.
Biggest changeProperties The following table lists the principal facility owned by us as of December 31, 2023: Location Function Approximate Square Feet Newark, DE Headquarters 160,000 The following table lists the principal facilities leased by us as of December 31, 2023: Location Function Approximate Square Feet Indianapolis, IN Administrative Offices 115,000 New Castle, DE Loan Servicing Center 125,000 Sterling, VA Administrative Offices 27,000 Newton, MA Administrative Offices 14,000 Salt Lake City, UT Sallie Mae Bank 17,000 The facility that we own is not encumbered by a mortgage.
We believe that our headquarters, loan servicing centers, data center, back-up facility, and data management and collection centers are generally adequate to meet our long-term lending and business goals. Our headquarters are currently located in owned space at 300 Continental Drive, Newark, Delaware, 19713. 2022 Form 10-K — SLM CORPORATION 43
We believe that our headquarters, loan servicing centers, data center, back-up facility, and data management and collection centers are generally adequate to meet our long-term lending and business goals. Our headquarters are currently located in owned space at 300 Continental Drive, Newark, Delaware, 19713. 2023 Form 10-K — SLM CORPORATION 41

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeGiven the timeframe covered by the CIDs, the CFPB Investigation, and the Multi-State Investigation, and the focus on practices and procedures previously conducted by Navient and its servicing subsidiaries prior to the Spin-Off, Navient is leading the response to these investigations.
Biggest changeTo the extent requested, the Bank has been cooperating fully with the CFPB. Given the timeframe covered by the CID and the CFPB Investigation, and the focus on practices and procedures previously conducted by Navient and its servicing subsidiaries prior to the Spin-Off, Navient is leading the response to these investigations.
Consequently, we have no basis from which to estimate either the duration or ultimate outcome of these investigations. 44 SLM CORPORATION — 2022 Form 10-K With regard to the CFPB Investigation, we note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against Navient, along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc.
Consequently, we have no basis from which to estimate either the duration or ultimate outcome of this investigation. We note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against Navient, along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc.
The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue in the Multi-State Investigation and in the above-described lawsuits.
The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue. Regulatory Update In May 2014, the Bank received a CID from the CFPB as part of the CFPB Investigation.
Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed multistate litigation and investigation matters, as well as related lawsuits in which the Bank had been named as a party.
Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed investigation matters and the now resolved multistate litigation.
The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement. Item 4. Mine Safety Disclosures N/A 2022 Form 10-K — SLM CORPORATION 45
The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement.
Removed
Pursuant to the terms of the Spin-Off and applicable law, Navient is responsible for all liabilities (whether accrued, contingent, or otherwise and whether known or unknown) arising out of or resulting from the conduct of pre-Spin-Off SLM and its subsidiaries’ businesses prior to the Spin-Off, other than certain specifically identified liabilities relating to the conduct of our consumer banking business for which the Bank is responsible.
Removed
Nonetheless, given the prior usage of the Sallie Mae and SLM names by entities now owned by Navient, we and our subsidiaries may from time to time be improperly named as defendants in legal proceedings where the allegations at issue are the legal responsibility of Navient.
Removed
Most of these legal proceedings involve matters that arose in whole or in part in the ordinary course of business of pre-Spin-Off SLM.
Removed
Likewise, as the period of time since the Spin-Off increases, so does the likelihood any allegations that may be made may be in part for our own actions in a post-Spin-Off time period and in part for Navient’s conduct in a pre-Spin-Off time period.
Removed
We will not be providing information on these proceedings unless there are material issues of fact or disagreement with Navient as to the bases of the proceedings or responsibility therefor that we believe could have a material, adverse impact on our business, assets, financial condition, liquidity, or outlook if not resolved in our favor.
Removed
On January 13, 2022, Navient announced agreements with a total of forty state attorneys general to resolve their previously disclosed multistate litigation and investigation matters, including but not limited to four lawsuits (brought by the attorneys general for the states of California, Washington, Pennsylvania, and New Jersey) arising out of the Multi-State Investigation.
Removed
Neither SLM, the Bank, nor any of their current subsidiaries were named in, or otherwise a party to, the California, Washington, Pennsylvania, or New Jersey lawsuits, and no claims were asserted against them. The Company and the Bank were not parties to the Navient settlement and have not contributed any of the relief sought in the settlement.
Removed
Further, the consent judgments between Navient and the various states contained releases of claims as to pre-Spin-Off SLM (including the Bank and other consolidated subsidiaries) for conduct occurring on or before the date of the Spin-Off.
Removed
Regulatory Update In May 2014, the Bank received a CID from the CFPB as part of the CFPB Investigation. Two state attorneys general also provided the Bank identical CIDs and other state attorneys general have become involved in the Multi-State Investigation.
Removed
To the extent requested, the Bank has been cooperating fully with the CFPB and the attorneys general conducting the Multi-State Investigation.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe transactions were accounted for as equity transactions and were included in treasury stock when the shares were received, at 2022 Form 10-K — SLM CORPORATION 47 which time there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share.
Biggest changeThe transactions were accounted for as equity transactions and were included in treasury stock when the shares were received, at which time there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share. 2023 Form 10-K — SLM CORPORATION 43 On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an additional 13 million shares.
We paid quarterly cash dividends on our common stock of $0.11 per share for each quarter of 2022. We paid quarterly cash dividends on our common stock of $0.03 per share for the first, second, and third quarters of 2021, respectively, and $0.11 per share for the fourth quarter of 2021.
We paid quarterly cash dividends on our common stock of $0.11 per share for each quarter of 2023 and 2022. We paid quarterly cash dividends on our common stock of $0.03 per share for the first, second, and third quarters of 2021, respectively, and $0.11 per share for the fourth quarter of 2021.
In addition to any repurchases that we may make under the share repurchase programs, we expect to repurchase common stock acquired as a result of taxes withheld in connection with award exercises and vesting under our employee stock-based compensation plans. 48 SLM CORPORATION — 2022 Form 10-K Stock Performance The following graph compares the five-year cumulative total returns of SLM Corporation, the S&P Supercomposite Consumer Finance Sub-Industry Index, and the S&P 400 Regional Bank Sub-Industry Index.
In addition to any repurchases that we may make under the share repurchase programs, we expect to repurchase common stock acquired as a result of taxes withheld in connection with award exercises and vesting under our employee stock-based compensation plans. 44 SLM CORPORATION — 2023 Form 10-K Stock Performance The following graph compares the five-year cumulative total returns of SLM Corporation, the S&P Supercomposite Consumer Finance Sub-Industry Index, and the S&P 400 Regional Bank Sub-Industry Index.
Share Repurchases under our Rule 10b5-1 Trading Plans During the years ended December 31, 2022 and 2021, we repurchased 40 million and 57 million shares, respectively, of our common stock at a total cost of $708 million and $1.1 billion, respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs.
Share Repurchases under our Rule 10b5-1 Trading Plans During the years ended December 31, 2023, 2022, and 2021, we repurchased 22 million, 40 million, and 57 million shares, respectively, of our common stock at a total cost of $349 million, $708 million, and $1.1 billion, respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs.
The final total actual number of shares of common stock delivered to us pursuant to the forward agreement was based generally upon a volume-weighted average price at which the shares of our common stock traded during the regular trading sessions on the NASDAQ Global Select Market during the term of the ASR.
The final total actual number of shares of common stock delivered to us pursuant to the forward agreement was based generally upon a volume-weighted average price at which the shares of our common stock traded during the regular trading sessions on Nasdaq during the term of the ASR.
The timing and volume of any repurchases under the 2022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the program or at all.
The timing and volume of any repurchases will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the 2024 Share Repurchase Program or at all.
On January 26, 2022, we announced the 2022 Share Repurchase Program, which was effective upon announcement and expires on January 25, 2024, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
On January 26, 2022, we announced the 2022 Share Repurchase Program, which was effective upon announcement and expired on January 25, 2024, and permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
This graph assumes $100 was invested in the stock or the relevant index on December 31, 2017, and also assumes the reinvestment of dividends through December 31, 2022.
This graph assumes $100 was invested in the stock or the relevant index on December 31, 2018, and also assumes the reinvestment of dividends through December 31, 2023.
(2) In the first quarter of 2022, we utilized all capacity then remaining under the 2021 Share Repurchase Program. As of December 31, 2022, we had $581 million of capacity remaining under the 2022 Share Repurchase Program. (3) In the fourth quarter of 2022, we repurchased 9.5 million common shares under our 10b5-1 trading plans.
(2)In the first quarter of 2022, we utilized all capacity then remaining under the 2021 Share Repurchase Program. As of December 31, 2023, we had $236 million of capacity remaining under the 2022 Share Repurchase Program. (3)In the fourth quarter of 2023, we repurchased 6.0 million common shares under our 10b5-1 trading plans.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed and has traded on the NASDAQ Global Select Market (“Nasdaq”) under the symbol SLM since December 12, 2011. As of January 31, 2023, there were 241,188,972 shares of our common stock outstanding and 250 holders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed and has traded on the NASDAQ Global Select Market (“Nasdaq”) under the symbol SLM since December 12, 2011. As of January 31, 2024, there were 220,349,715 shares of our common stock outstanding and 246 holders of record.
We utilized all capacity under the 2019 Share Repurchase Program, having repurchased 17 million and 3 million shares of common stock for $167 million and $33 million in the years ended December 31, 2019 and 2020, respectively.
We utilized all capacity under the 2019 Share Repurchase Program, having repurchased 3 million shares of common stock for $33 million in the year ended December 31, 2020.
So long as there is unexpired capacity under a given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions.
Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions.
See Note 14, “Stockholders’ Equity” to our consolidated financial statements in this Form 10-K for further discussion. The closing price of our common stock on Nasdaq on December 30, 2022 was $16.60.
See Note 14, “Stockholders’ Equity” to our consolidated financial statements in this Form 10-K for further discussion. The closing price of our common stock on Nasdaq on December 29, 2023 was $19.12.
Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share Repurchase Program.
In total, we repurchased 58 million shares under the ASR at an average price per share of $9.01. Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share Repurchase Program.
Under the 2022 Share Repurchase Program, we repurchased 38.2 million shares of common stock at an average price per share of $17.52, for $669 million in the year ended December 31, 2022. There was $581 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2022.
Under the 2022 Share Repurchase Program, we repurchased 22.3 million shares of common stock at an average price per share of $15.64, for $349 million in the year ended December 31, 2023, and we repurchased 38.2 million shares of common stock at an average price per share of $17.52, for $669 million in the year ended December 31, 2022.
(In thousands, except per share data) Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)(3) Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs (2) Period: October 1 - October 31, 2022 4,519 $ 15.66 4,519 $665,000 November 1 - November 30, 2022 2,488 $ 16.90 2,488 $623,000 December 1 - December 31, 2022 2,529 $ 16.65 2,525 $581,000 Total fourth-quarter 2022 9,536 $ 16.25 9,532 (1) The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding obligations in connection with exercises of stock options and vesting of restricted stock, restricted stock units, and performance stock units.
(In thousands, except per share data) Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)(3) Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs at December 31, 2023 (2) Period: October 1 - October 31, 2023 3 $ 12.86 — $326,000 November 1 - November 30, 2023 4,230 $ 14.95 4,229 $264,000 December 1 - December 31, 2023 1,730 $ 16.63 1,723 $236,000 Total fourth-quarter 2023 5,963 $ 15.43 5,952 (1)The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding obligations in connection with exercises of stock options and vesting of restricted stock, restricted stock units, and performance stock units.
On October 20, 2021, we announced a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.
This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.
Issuer Purchases of Equity Securities The following table provides information relating to our purchase of shares of our common stock in the three months ended December 31, 2022.
Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors. We may change our common stock dividend policy at any time. Issuer Purchases of Equity Securities The following table provides information relating to our purchase of shares of our common stock in the three months ended December 31, 2023.
Five-Year Cumulative Total Stockholder Return Company/Index 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 SLM Corporation $100.0 $73.5 $79.9 $112.5 $180.6 $156.3 S&P Supercomposite Consumer Finance Sub-Industry Index 100.0 83.9 113.2 114.1 155.8 125.5 S&P 400 Regional Bank Sub-Industry Index 100.0 78.6 97.9 89.5 126.8 121.5 Source: Bloomberg Total Return Analysis 2022 Form 10-K — SLM CORPORATION 49
Five-Year Cumulative Total Stockholder Return Company/Index 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 SLM Corporation $100.0 $108.6 $153.0 $245.6 $212.5 $252.2 S&P Supercomposite Consumer Finance Sub-Industry Index 100.0 135.0 136.1 185.9 149.7 192.4 S&P 400 Regional Bank Sub-Industry Index 100.0 124.6 113.9 161.3 154.6 153.2 Source: Bloomberg Total Return Analysis 2023 Form 10-K — SLM CORPORATION 45
Removed
We paid quarterly cash dividends on our common stock of $0.03 per share for each quarter of 2020. Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors. We may change our common stock dividend policy at any time.
Added
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that could be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023.
Removed
On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share of $9.01.
Added
There was $236 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2023. Any capacity remaining unused under the 2022 Share Repurchase Program on January 25, 2024 expired on that date pursuant to the terms of the 2022 Share Repurchase Program.
Removed
For additional information, see Notes to Consolidated Financial Statements, Note 14, “Stockholders’ Equity.” In October 2020, we initiated a cash tender offer to purchase up to 2,000,000 shares of our Series B Preferred Stock.
Added
On January 24, 2024, we announced the 2024 Share Repurchase Program, which became effective on January 26, 2024 and expires on February 6, 2026, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $650 million.
Removed
On November 30, 2020, we accepted for purchase 1,489,304 shares of the Series B Preferred Stock at a purchase price of $45 per share plus an amount equal to accrued and unpaid dividends, for an aggregate purchase price of approximately $68 million.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest change“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Years Ended December 31, (dollars in millions, except per share amounts) 2022 2021 2020 2019 2018 Operating Data: Net interest income $ 1,489 $ 1,395 $ 1,480 $ 1,623 $ 1,413 Non-interest income (loss) 335 632 331 49 (52) Total revenue 1,824 2,027 1,811 1,672 1,361 Net income $ 469 $ 1,161 $ 881 $ 578 $ 487 Basic earnings per common share $ 1.78 $ 3.67 $ 2.27 $ 1.31 $ 1.08 Diluted earnings per common share $ 1.76 $ 3.61 $ 2.25 $ 1.30 $ 1.07 Dividends per common share (1) $ 0.44 $ 0.20 $ 0.12 $ 0.12 $ — Return on common stockholders’ equity 25 % 54 % 45 % 21 % 20 % Net interest margin 5.31 4.81 4.81 5.76 6.10 Return on assets 1.64 3.92 2.84 1.96 2.01 Dividend payout ratio 25 6 5 9 — Average equity/average assets 7.19 8.09 7.23 10.56 11.22 Balance Sheet Data: Total education loans held for investment portfolio, net $ 19,627 $ 20,318 $ 19,172 $ 23,680 $ 21,143 Total assets 28,811 29,222 30,770 32,686 26,638 Total deposits 21,448 20,828 22,666 24,284 18,943 Total borrowings 5,235 5,931 5,189 4,643 4,284 Total SLM Corporation stockholders’ equity 1,727 2,150 2,563 3,312 2,973 Book value per common share 6.13 6.81 6.16 6.91 5.90 (1) Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors.
Biggest change“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Years Ended December 31, (dollars in millions, except per share amounts) 2023 2022 2021 2020 2019 Operating Data: Net interest income $ 1,562 $ 1,489 $ 1,395 $ 1,480 $ 1,623 Non-interest income 247 335 632 331 49 Total revenue 1,809 1,824 2,027 1,811 1,672 Net income $ 581 $ 469 $ 1,161 $ 881 $ 578 Basic earnings per common share $ 2.44 $ 1.78 $ 3.67 $ 2.27 $ 1.31 Diluted earnings per common share $ 2.41 $ 1.76 $ 3.61 $ 2.25 $ 1.30 Dividends per common share (1) $ 0.44 $ 0.44 $ 0.20 $ 0.12 $ 0.12 Return on common stockholders’ equity 36 % 25 % 54 % 45 % 21 % Net interest margin 5.50 5.31 4.81 4.81 5.76 Return on assets 2.03 1.64 3.92 2.84 1.96 Dividend payout ratio 18 25 6 5 9 Average equity/average assets 6.37 7.19 8.09 7.23 10.56 Balance Sheet Data: Total education loans held for investment portfolio, net $ 20,306 $ 19,627 $ 20,318 $ 19,172 $ 23,680 Total assets 29,169 28,811 29,222 30,770 32,686 Total deposits 21,653 21,448 20,828 22,666 24,284 Total borrowings 5,228 5,235 5,931 5,189 4,643 Total SLM Corporation stockholders’ equity 1,881 1,727 2,150 2,563 3,312 Book value per common share 7.40 6.13 6.81 6.16 6.91 (1) Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors.
We may change our common stock dividend policy at any time. We did not pay common stock dividends in fiscal year 2018. 50 SLM CORPORATION — 2022 Form 10-K
We may change our common stock dividend policy at any time. 46 SLM CORPORATION — 2023 Form 10-K

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeLoans 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. 68 SLM CORPORATION — 2022 Form 10-K Average Loans Held for Investment Balances (net of unamortized premium/discount) Years Ended December 31, (dollars in thousands) 2022 2021 2020 Private Education Loans $ 20,576,737 97 % $ 20,968,061 97 % $ 22,426,216 94 % FFELP Loans 662,194 3 718,186 3 757,953 3 Personal Loans — — — — 582,552 3 Credit Cards — — 14,982 — 9,390 — Total portfolio $ 21,238,931 100 % $ 21,701,229 100 % $ 23,776,111 100 % Loans Held for Investment, Net — Activity Year Ended December 31, 2022 (dollars in thousands) Private Education Loans FFELP Loans Credit Cards Total Loans Held for Investment, net Beginning balance $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283 Acquisitions and originations: Fixed-rate 4,189,269 — — 4,189,269 Variable-rate 1,809,301 — 82,819 1,892,120 Total acquisitions and originations 5,998,570 — 82,819 6,081,389 Capitalized interest and deferred origination cost premium amortization 550,474 24,642 (195) 574,921 Sales (3,136,302) — — (3,136,302) Loan consolidations to third parties (1,384,950) (61,529) — (1,446,479) Allowance (194,654) 633 2,281 (191,740) Transfer to loans held-for-sale — — (28,905) (28,905) Repayments and other (2,438,799) (49,545) (78,955) (2,567,299) Ending balance $ 19,019,713 $ 607,155 $ — $ 19,626,868 Year Ended December 31, 2021 (dollars in thousands) Private Education Loans FFELP Loans Credit Cards Total Loans Held for Investment, net Beginning balance $ 18,436,968 $ 735,208 $ 10,967 $ 19,183,143 Acquisitions and originations: Fixed-rate 3,027,440 — — 3,027,440 Variable-rate 2,421,082 — 63,323 2,484,405 Total acquisitions and originations 5,448,522 — 63,323 5,511,845 Capitalized interest and deferred origination cost premium amortization 597,416 27,252 (323) 624,345 Sales (1,138,726) — — (1,138,726) Loan consolidations to third parties (1,583,691) (27,031) — (1,610,722) Allowance 196,868 300 (780) 196,388 Transfer from loans held-for-sale 25,040 — — 25,040 Repayments and other (2,357,023) (42,775) (50,232) (2,450,030) Ending balance $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283 2022 Form 10-K — SLM CORPORATION 69 Year Ended December 31, 2020 (dollars in thousands) Private Education Loans FFELP Loans Personal Loans Credit Cards Total Loans Held for Investment, net Beginning balance $ 22,896,515 $ 783,816 $ 983,643 $ 3,818 $ 24,667,792 Day 1 CECL adjustment to allowance (1,060,830) (2,852) (79,183) (188) (1,143,053) Balance at January 1, 2020 21,835,685 780,964 904,460 3,630 23,524,739 Acquisitions and originations: Fixed-rate 2,903,258 — 41 — 2,903,299 Variable-rate 2,439,029 — — 35,955 2,474,984 Total acquisitions and originations 5,342,287 — 41 35,955 5,378,283 Capitalized interest and deferred origination cost premium amortization 616,115 27,558 (253) (819) 642,601 Sales (2,925,478) — (588,285) — (3,513,763) Loan consolidations to third parties (1,332,802) (21,243) — — (1,354,045) Allowance 79,285 107 36,526 (1,211) 114,707 Transfer to loans held-for-sale (2,885,640) — — — (2,885,640) Repayments and other (2,292,484) (52,178) (352,489) (26,588) (2,723,739) Ending balance $ 18,436,968 $ 735,208 $ — $ 10,967 $ 19,183,143 “Loan consolidations to third parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in full principal and interest repayment status.
Biggest changeLoans Held for Investment, Net — Activity Year Ended December 31, 2023 (dollars in thousands) Private Education Loans FFELP Loans Total Loans Held for Investment, net Beginning balance $ 19,019,713 $ 607,155 $ 19,626,868 Acquisitions and originations: Fixed-rate 5,760,434 — 5,760,434 Variable-rate 665,987 — 665,987 Total acquisitions and originations 6,426,421 — 6,426,421 Capitalized interest and deferred origination cost premium amortization 597,480 22,584 620,064 Sales (2,938,616) — (2,938,616) Loan consolidations to third parties (975,889) (32,855) (1,008,744) Allowance 18,526 (1,223) 17,303 Repayments and other (2,375,342) (61,597) (2,436,939) Ending balance $ 19,772,293 $ 534,064 $ 20,306,357 Year Ended December 31, 2022 (dollars in thousands) Private Education Loans FFELP Loans Credit Cards Total Loans Held for Investment, net Beginning balance $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283 Acquisitions and originations: Fixed-rate 4,189,269 — — 4,189,269 Variable-rate 1,809,301 — 82,819 1,892,120 Total acquisitions and originations 5,998,570 — 82,819 6,081,389 Capitalized interest and deferred origination cost premium amortization 550,474 24,642 (195) 574,921 Sales (3,136,302) — — (3,136,302) Loan consolidations to third parties (1,384,950) (61,529) — (1,446,479) Allowance (194,654) 633 2,281 (191,740) Transfer to loans held-for-sale — — (28,905) (28,905) Repayments and other (2,438,799) (49,545) (78,955) (2,567,299) Ending balance $ 19,019,713 $ 607,155 $ — $ 19,626,868 60 SLM CORPORATION — 2023 Form 10-K Year Ended December 31, 2021 (dollars in thousands) Private Education Loans FFELP Loans Credit Cards Total Loans Held for Investment, net Beginning balance $ 18,436,968 $ 735,208 $ 10,967 $ 19,183,143 Acquisitions and originations: Fixed-rate 3,027,440 — — 3,027,440 Variable-rate 2,421,082 — 63,323 2,484,405 Total acquisitions and originations 5,448,522 — 63,323 5,511,845 Capitalized interest and deferred origination cost premium amortization 597,416 27,252 (323) 624,345 Sales (1,138,726) — — (1,138,726) Loan consolidations to third parties (1,583,691) (27,031) — (1,610,722) Allowance 196,868 300 (780) 196,388 Transfer from loans held-for-sale 25,040 — — 25,040 Repayments and other (2,357,023) (42,775) (50,232) (2,450,030) Ending balance $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283 “Loan consolidations to third parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in full principal and interest repayment status.
When the loan is funded, we transfer that liability to the allowance for credit losses.
When the loan is funded, we transfer that liability to the allowance for credit losses.
Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loan.
Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans.
To achieve these objectives, we analyze and monitor our liquidity needs, maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt primarily through asset-backed securitizations, other financing facilities, and loan sales.
To achieve these objectives, we analyze and monitor our liquidity needs, and maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt primarily through asset-backed securitizations, other financing facilities, and loan sales.
Our TDR portfolio was comprised mostly of loans with interest rate reductions and loans with forbearance usage greater than three months, as further described below. We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations, achieve better student outcomes, and increase the collectability of the loans.
Our TDR portfolio was comprised mostly of loans with interest rate reductions and loans with forbearance usage greater than three months, as further described below. We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans.
These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
The Nominations and Governance Committee recommends to the Board appropriate standards of corporate governance, and assists the Board of Directors in fulfilling its obligations with regard to oversight of the operations of the Board, the qualifications and independence of directors, nominations to the Board of Directors, and compliance with the corporate governance standards.
The Nominations and Governance Committee recommends to the Board of Directors appropriate standards of corporate governance, and assists the Board of Directors in fulfilling its obligations with regard to oversight of the operations of the Board of Directors, the qualifications and independence of directors, nominations to the Board of Directors, and compliance with the corporate governance standards.
For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method. We have elected to early adopt all aspects of ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption was immaterial to our consolidated financial statements.
For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method. We elected to early adopt all aspects of ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption was immaterial to our consolidated financial statements.
For entities that have adopted the amendments in CECL, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments in ASU No. 2022-02 is permitted if an entity has adopted CECL. The amendments should be applied prospectively.
For entities that have adopted the amendments in CECL, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments in ASU No. 2022-02 was permitted if an entity has adopted CECL. The amendments should be applied prospectively.
Internal Audit regularly monitors and performs selected reviews of our risk management and compliance functions, to assess the effectiveness of the overall risk management framework, identifies areas that may require increased focus and resources, and reports significant control issues and recommendations to executive management and the Audit Committee of the Board of Directors.
Internal Audit regularly performs selected reviews of our risk management and compliance functions to assess the effectiveness of the overall risk management framework, identifies areas that may require increased focus and resources, and reports significant control issues and recommendations to executive management and the Audit Committee of the Board of Directors.
The allowance for credit losses and provision expense rise in periods of high loan origination, when future charge-offs are expected to increase, and fall when future charge-offs are expected to decline. We bear the full credit exposure on our Private Education Loans and Credit Cards.
The allowance for credit losses and provision expense rise in periods of high loan origination, when future charge-offs are expected to increase, and fall when future charge-offs are expected to decline. We bear the full credit exposure on our Private Education Loans.
In light of these considerations, we previously announced certain planned changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted.
In light of these considerations, we previously announced certain changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted.
Risk Management Policy and Risk Appetite Framework The Risk Management Policy and Risk Appetite Framework are designed to establish a stable risk and control environment across the enterprise. The policy, which is approved by the Board of Directors, outlines the framework used to ensure that risk and control issues across the enterprise are identified, assessed, measured, monitored, and reported.
Risk Management Policy and Risk Appetite Standard The Risk Management Policy and Risk Appetite Standard are designed to establish a stable risk and control environment across the enterprise. The policy, which is approved by the Board of Directors, outlines the framework used to ensure that risk and control issues across the enterprise are identified, assessed, measured, monitored, and reported.
The Financial Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer. • Operational and Compliance Risk Committee. The Operational and Compliance Risk Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the major non-financial risks, including compliance risks, operational risks, information security risk, and model risk.
The Financial Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer. • Operational and Compliance Risk Committee. The Operational and Compliance Risk Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the major non-financial risks, including compliance risks, operational risks, information and cyber security risk, and model risk.
For December 31, 2022 and 2021, we used both an estimate of recovery rates from in-house collections as well as expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off loans.
For December 31, 2022, we used both an estimate of recovery rates from in-house collections as well as expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off loans.
Additionally, the Compensation Committee provides oversight of human capital management, including in the areas of diversity, equity, and inclusion. • Preferred Stock Committee. The Preferred Stock Committee monitors and evaluates proposed actions that may impact the rights of holders of our preferred stock. Management-Level Committee Structure Executive Committee (“EC”) .
Additionally, the Compensation Committee provides oversight of human capital management, including in the areas of diversity, equity, and inclusion. • Preferred Stock Committee. The Preferred Stock Committee monitors and evaluates proposed actions that may impact the rights of holders of our preferred stock. Management-Level Committee Structure Executive Committee .
The Audit Committee is responsible for oversight of the quality and integrity of our financial statements, accounting and reporting processes, the performance of the internal audit function, and the qualifications, hiring, performance, and independence of our independent registered accounting firm. • Nominations and Governance Committee.
The Audit Committee is responsible for oversight of the quality and integrity of our financial statements, accounting and reporting processes, the performance of the Internal Audit function, and the qualifications, hiring, performance, and independence of our independent registered public accounting firm. • Nominations and Governance Committee.
The ERC is jointly accountable to the Financial Risk Committee and the Operational and Compliance Risk Committee of the Board of Directors and provides for escalation accordingly. • Credit Committee . The Credit Committee is responsible for credit and counterparty risk, product pricing, and credit and collections operations. • Operational Risk Committee (“ORC”) .
The ERC is jointly accountable to the Financial Risk Committee and the Operational and Compliance Risk Committee of the Board of Directors and provides for escalation accordingly. • Credit Committee . The Credit Committee is responsible for credit and counterparty risk, product pricing, and credit and collections operations. • Operational and Compliance Risk Committee .
At December 31, 2020, the loans in the “in-school” category include $254 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were then not required to make any payments.
At December 31, 2020, the loans in the “in-school” category include $254 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the COVID-19 pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were then not required to make any payments.
(3) 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, consistent with established loan program servicing policies and procedures. (4) The period of delinquency is based on the number of days scheduled payments are contractually past due.
(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, 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.
The Company is a source of strength for the Bank and will provide additional capital if necessary. We believe that current and projected capital levels are appropriate for 2023. As of December 31, 2022, the Bank’s risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully phased-in U.S.
The Company is a source of strength for the Bank and will provide additional capital if necessary. We believe that current and projected capital levels are appropriate for 2024. As of December 31, 2023, the Bank’s risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully phased-in U.S.
The decrease in consolidations is attributable to higher interest rates in 2022 that made it less competitive for consolidators. Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.
The decrease in consolidations is attributable to higher interest rates in 2023 that made it less competitive for consolidators. Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.
Movements in the value of the derivatives, which are primarily affected by changes in interest rates, may require us to return cash collateral held or may require us to access primary liquidity to post collateral to counterparties. The table below highlights exposure related to our derivative counterparties as of December 31, 2022.
Movements in the value of the derivatives, which are primarily affected by changes in interest rates, may require us to return cash collateral held or may require us to access primary liquidity to post collateral to counterparties. The table below highlights exposure related to our derivative counterparties as of December 31, 2023.
(2) For the years ended December 31, 2022 and 2021, below is a reconciliation of the provision 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 commitments by recording a provision for credit losses.
(2) For the years ended December 31, 2023 and 2022, below is a reconciliation of the provision 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 commitments by recording a provision for credit losses.
At December 31, 2022 and 2021, we had a net positive exposure (derivative gain positions to us, less collateral held by us, and plus collateral posted with counterparties) related to derivatives of $12 million and $9 million, respectively. We have liquidity exposure related to collateral movements between us and our derivative counterparties.
At December 31, 2023 and 2022, we had a net positive exposure (derivative gain positions to us, less collateral held by us, and plus collateral posted with counterparties) related to derivatives of $9 million and $12 million, respectively. We have liquidity exposure related to collateral movements between us and our derivative counterparties.
For 2021, we increased our allowance for credit losses as a result of the new credit administration practices. In the fourth quarter of 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term.
For 2021, we increased our allowance for credit losses as a result of the new credit administration practices. In 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term.
The Risk Management Policy, the Risk Appetite Framework, and the related policies and procedures constitute the core of the risk management program. Sallie Mae leverages risk appetite to outline the level of risk we are willing to accept within each risk category, as described below, in pursuit of our business objectives.
The Risk Management Policy, the Risk Appetite Standard, and the related policies and procedures constitute the core of the risk management program. Sallie Mae leverages risk appetite to outline the level of risk we are willing to accept within each risk category, as described below, in pursuit of our business objectives.
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 years ended December 31, 2022 and 2021.
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 years ended December 31, 2023 and 2022.
Operational risk exposures are managed through a combination of first line of defense and control activities and second line of defense oversight. The ORC is the management committee responsible for operational risk, and it supports the EC in its oversight duties. The ORC is responsible for escalation to the EC, as appropriate.
Operational risk exposures are managed through a combination of first line of defense and control activities and second line of defense oversight. The OCRC is the management committee responsible for operational risk, and it supports the EC in its oversight duties. The OCRC is responsible for escalation to the EC, as appropriate.
The increase in delinquencies and the reduction in forbearance at December 31, 2022, compared with the prior year, were due to a combination of factors, including our new credit administration practices changes that imposed additional requirements for those borrowers requesting forbearance, operational challenges in 2022, including a shortage and lack of tenured collections staff, and the cessation of the use of disaster forbearance related to COVID-19.
The increase in delinquencies and reduction in forbearance at December 31, 2022, compared with 2021, were due to a combination of factors, including our new credit administration practices changes that imposed additional requirements for those borrowers requesting forbearance, operational challenges in 2022, including a shortage and lack of tenured collections staff, and the cessation of the use of disaster forbearance related to COVID-19.
We expect to learn more about how our borrowers are reacting to these changes to credit administration practices and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.
We expect to learn more about how our borrowers are reacting to changes in our credit administration practices and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.
By early 2020 and continuing through 2022, we held a significant liquidity buffer of cash and securities, which we expect to maintain through 2023. Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.
By early 2020 and continuing through 2023, we held a significant liquidity buffer of cash and securities, which we expect to maintain through 2024. Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.
At December 31, 2020, December 31, 2021, and December 31, 2022, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively.
At December 31, 2021, December 31, 2022, and December 31, 2023, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively.
Also contributing to the increase in the full-year 2022 charge-offs compared with the prior year were $59 million in losses on loans whose borrowers took a “gap year” during the pandemic.
Also contributing to the increase in the full-year 2022 charge-offs compared with 2021 were $59 million in losses on loans whose borrowers took a “gap year” during the pandemic.
Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses. During 2022, we experienced slower prepayment rates due to the rising interest rate environment. Historically, when rates rise loan prepayments and consolidation activity by third parties decline, and when rates decline loan prepayments and consolidation activity increase.
Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses. In 2023, we experienced slower prepayment rates due to the rising interest rate environment. Historically, when rates rise loan prepayments and consolidation activity by third parties decline, and when rates decline loan prepayments and consolidation activity increase.
For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “—Allowance for Credit Losses,” “— Critical Accounting Policies and Estimates — Allowance for Credit Losses,” and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-K. 74 SLM CORPORATION — 2022 Form 10-K The table below presents our Private Education Loans held for investment portfolio delinquency trends.
For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “—Allowance for Credit Losses,” “— Critical Accounting Policies and Estimates — Allowance for Credit Losses,” and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-K. 2023 Form 10-K — SLM CORPORATION 65 The table below presents our Private Education Loans held for investment portfolio delinquency trends.
In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, the home price index, and median family income in determining the adequacy of the allowance for credit losses. Prior to this change, we included forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models.
In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, retail sales, and median family income in determining the adequacy of the allowance for credit losses. Prior to this change, we included forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models.
The agreement also addresses the allocation of tax liabilities that are incurred as a result of the Spin-Off and related transactions. 2022 Form 10-K — SLM CORPORATION 91 Critical Accounting Policies and Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with GAAP.
The agreement also addresses the allocation of tax liabilities that are incurred as a result of the Spin-Off and related transactions. 2023 Form 10-K — SLM CORPORATION 81 Critical Accounting Policies and Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with GAAP.
In the fourth quarter of 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term. This change reflects our estimate that the elevated default rates experienced in the latter half of 2022 will continue into 2023 and then decline over time.
In the fourth quarter of 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term. This change reflected our estimate that the elevated default rates experienced in the latter half of 2022 would continue into 2023 and then decline over time.
The faster estimated prepayment speeds reflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model in the first quarter of 2021. • Gains on sales of loans, net, were $328 million in 2022, compared with $548 million in the year-ago period.
The faster estimated prepayment speeds reflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model in the first quarter of 2021. • Gains on sales of loans, net, were $328 million in 2022, compared with $548 million in 2021.
The Class A and Class B notes had a weighted average life of 4.69 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.76 percent.
The Class A and Class B notes had a weighted average life of 4.93 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.69 percent.
(2) Represents fair value adjustments on loans sold. (3) For the year ended December 31, 2020, below is a reconciliation of the provision 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 commitments by recording a provision for credit losses.
(2) Represents fair value adjustments on loans sold. (3) For the years ended December 31, 2021 and 2020, below is a reconciliation of the provision 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 commitments by recording a provision for credit losses.
The balance of loans held for investment in full principal and interest repayment status was affected in 2022 and 2021 by loan sales.
The balance of loans held for investment in full principal and interest repayment status was affected in 2023 and 2022 by loan sales.
Once the quantitative calculation is performed, we review the adequacy of the allowance for credit losses and determine if qualitative adjustments need to be considered. 2022 Form 10-K — SLM CORPORATION 97 Risk Management Our Approach Risk is inherent in our business activities and the specialized lending industry we serve.
Once the quantitative calculation is performed, we review the adequacy of the allowance for credit losses and determine if qualitative adjustments need to be considered. 86 SLM CORPORATION — 2023 Form 10-K Risk Management Our Approach Risk is inherent in our business activities and the specialized lending industry we serve.
At December 31, 2022, for Private Education Loans (held for investment) that have been in active repayment status for fewer than 25 months, loans in forbearance status as a percentage of loans in repayment and forbearance were 1 percent.
At December 31, 2023, for Private Education Loans (held for investment) that have been in active repayment status for fewer than 25 months, loans in forbearance status as a percentage of loans in repayment and forbearance were 1.6 percent.
(5) 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 payment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(4) 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 payment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance).
(3) For December 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022. 86 SLM CORPORATION — 2022 Form 10-K Dividends The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC.
(3) For December 31, 2023 and 2022, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed above that were phased in at the beginning of 2023 and 2022. 2023 Form 10-K — SLM CORPORATION 77 Dividends The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC.
Interest bearing deposits as of December 31, 2022 and 2021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposit accounts (“MMDAs”), and retail and brokered CDs. Interest bearing deposits include deposits from Educational 529 and Health Savings plans that diversify our funding sources and add deposits we consider to be core.
Interest-bearing deposits as of December 31, 2023 and December 31, 2022 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposit accounts (“MMDAs”), and retail and brokered CDs. Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core.
Accrued interest on deposits was $59 million and $35 million at December 31, 2022 and 2021, respectively. Counterparty Exposure Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative counterparty will not be able to meet its obligations to us.
Accrued interest on deposits was $91 million and $59 million at December 31, 2023 and 2022, respectively. Counterparty Exposure Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative counterparty will not be able to meet its obligations to us.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $8.0 billion of our deposit total as of December 31, 2022, compared with $7.3 billion at December 31, 2021. Some of our deposit products are serviced by third-party providers.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.6 billion of our deposit total as of December 31, 2023, compared with $8.0 billion at December 31, 2022. Some of our deposit products are serviced by third-party providers.
Business — Human Capital Resources and Talent Development” for a discussion regarding our mission-led culture. 2022 Form 10-K — SLM CORPORATION 59 Results of Operations We present the results of operations below on a consolidated basis in accordance with GAAP.
Business — Human Capital Resources and Talent Development” for a discussion regarding our mission-led culture. 50 SLM CORPORATION — 2023 Form 10-K Results of Operations We present the results of operations below on a consolidated basis in accordance with GAAP.
The Bank declared $700 million, $1.4 billion, and $579 million in dividends to the Company for the years ended December 31, 2022, 2021, and 2020, respectively, with the proceeds primarily used to fund the 2022, 2021, and 2020 Share Repurchase Programs and stock dividends. See Part I, Item 1.
The Bank declared $550 million, $700 million, and $1.4 billion in dividends to the Company for the years ended December 31, 2023, 2022, and 2021, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. See Part I, Item 1.
The primary contributors to each of the identified drivers of change in net income for the current year period compared with the year-ago period are as follows: • Net interest income in 2022 increased by $94 million compared with the year-ago period primarily due to a 50-basis point increase in our net interest margin, which more than offset a $922 million reduction in average interest-earning assets.
The primary contributors to each of the identified drivers of change in net income for 2022 compared with 2021 are as follows: • Net interest income in 2022 increased by $94 million compared with 2021 primarily due to a 50-basis point increase in our net interest margin, which more than offset a $922 million reduction in average interest-earning assets.
At December 31, 2022, we had $2.0 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2022/2023 academic year. At December 31, 2022, we had a $125 million reserve recorded in “Other Liabilities” to cover expected losses that may occur during the one-year loss emergence period on these unfunded commitments.
At December 31, 2023, we had $2.2 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2023/2024 academic year. At December 31, 2023, we had a $113 million reserve recorded in “Other Liabilities” to cover expected losses that may occur during the one-year loss emergence period on these unfunded commitments.
The gain recorded in 2021 was primarily the result of a $35 million increase in the valuation of the same non-marketable securities. • Other income was $67 million in 2022, compared with $45 million in the year-ago period.
The gain recorded in 2021 was primarily the result of a $35 million increase in the valuation of the same non-marketable securities. • Other income was $67 million in 2022, compared with $45 million in 2021.
Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $13 million, $16 million, and $19 million in the years ended December 31, 2022, 2021, and 2020, respectively.
Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $12 million, $13 million, and $16 million in the years ended December 31, 2023, 2022, and 2021, respectively.
On November 1, 2021, we issued an unsecured debt offering of $500 million, 3.125 percent Senior Notes due November 2, 2026, at a price of 99.43 percent. At December 31, 2022, the outstanding balance was $493 million.
On November 1, 2021, we issued an unsecured debt offering of $500 million, 3.125 percent Senior Notes due November 2, 2026, at a price of 99.43 percent. At December 31, 2023, the outstanding balance was $495 million.
Long-term Borrowings Unsecured Debt On October 29, 2020, we issued at par an unsecured debt offering of $500 million of 4.20 percent Senior Notes due October 29, 2025. At December 31, 2022, the outstanding balance was $496 million.
Long-term Borrowings Unsecured Debt On October 29, 2020, we issued at par an unsecured debt offering of $500 million of 4.20 percent Senior Notes due October 29, 2025. At December 31, 2023, the outstanding balance was $497 million.
In 2020, we launched a formal cross-functional replacement project with the goal of ensuring a smooth transition to a replacement index for our LIBOR-based assets and obligations with minimal negative impact on our customers, investors, and the Company’s business, financial condition, and results of operations.
In 2020, we launched a formal cross-functional replacement project with the goal of ensuring a smooth transition to a replacement index for our LIBOR-based assets and obligations with minimal negative impact on our customers, investors, and the Company’s business, financial condition, and results of operations. In 2020, we began accepting certain deposits based on SOFR.
The decrease in gains on sales of loans, net, also was the result of $90 million less in Private Education Loan sales in 2022 when compared with the year-ago period. • Gains (losses) on securities, net was a loss of $60 million in 2022, compared with a gain of $39 million in the year ago period.
The decrease in gains on sales of loans, net, also was the result of $90 million less in Private Education Loan sales in 2022 when compared with 2021. • Gains (losses) on securities, net, was a loss of $60 million in 2022, compared with a gain of $39 million in 2021.
Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 3.8 percent at December 31, 2022 from 3.3 percent at December 31, 2021, and the forbearance rate decreased to 1.8 percent at December 31, 2022 from 1.9 percent at December 31, 2021.
Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 3.9 percent at December 31, 2023 from 3.8 percent at December 31, 2022, and the forbearance rate increased to 2.1 percent at December 31, 2023 from 1.8 percent at December 31, 2022.
A 100-basis point increase or decrease in the home price index or median family income does not result in material changes to our allowance for credit losses. Increases in the weighting of economic forecasts resulting in greater weight given to more severe economic forecasts would result in an increase in the allowance for credit losses.
A 100-basis point increase or decrease in the retail sales or median family income does not result in material changes to our allowance for credit losses. Increases in the weighting of economic forecasts resulting in greater weight given to more severe economic forecasts would result in an increase in the allowance for credit losses.
At both December 31, 2022 and 2021, 24 percent of the principal balance of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or other deferment status and not required to make payments.
At December 31, 2023 and 2022, 25 percent and 24 percent, respectively, of the principal balance of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or other deferment status and not required to make payments.
We also continue to strengthen our risk and compliance function, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk. During 2022, we made the following progress on the above corporate strategic imperatives.
We also continue to strengthen our risk and compliance functions, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk. During 2023, we made the following progress on the above corporate strategic imperatives.
Our net interest margin increased in the current period from the year-ago period because of a combination of factors, including an $855 million reduction in low-yielding average cash and other short-term investments, and a $367 million increase in average taxable securities. Historically, the yields on interest-earnings assets reprice more quickly than our cost of funds.
Our net interest margin increased in 2022 from 2021 because of a combination of factors, including an $855 million reduction in low-yielding average cash and other short-term investments, and a $367 million increase in average taxable securities. Historically, the yields on interest-earnings assets reprice more quickly than our cost of funds.
The higher level of cash and other short-term investments in 2021 was primarily the result of the $4.2 billion Private Education Loan sale that occurred in 2021. • Provision for credit losses in 2022 was $633 million, compared with a negative provision of $33 million in the year-ago period.
The higher level of cash and other short-term investments in 2021 was primarily the result of $4.2 billion in Private Education Loan sales that occurred in 2021. • Provision for credit losses in 2022 was $633 million, compared with a negative provision of $33 million in 2021.
The estimated impacts of changes in the above table were calculated for the two-year reasonable and supportable period, but were not calculated for the remaining periods since long-term assumptions used to calculate the allowance for 94 SLM CORPORATION — 2022 Form 10-K the remaining periods are based on longer term averages and only change when we determine there is a fundamental change that will affect long-term rates.
The estimated impacts of changes in the above table were calculated for the two-year reasonable and supportable period, but were not calculated for the remaining periods since long-term assumptions used to calculate the allowance for the remaining periods are based on longer term averages and only change when we determine there is a fundamental change that will affect long-term rates.
Higher interest rates in 2022 compared with 2021 resulted in the amount the buyers were willing to pay on our loans in 2022 to decrease compared with the year-ago period.
Higher interest rates in 2022 compared with 2021 resulted in the amount the buyers were willing to pay on our loans in 2022 to decrease compared with 2021.
“Risk Factors” in this Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR. Strategic Imperatives To further focus our business and increase shareholder value, we continue to advance our strategic imperatives.
“Risk Factors - INTEREST RATE RISK” in this Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR. Strategic Imperatives To further focus our business and increase shareholder value, we continue to advance our strategic imperatives.
Operational risk is the risk of adverse impacts to earnings, capital, or reputation resulting from inadequate or failed internal processes, people, and systems, or from external events that are not directly attributable to other risk categories. Operational risk is pervasive in that it exists in all business lines, functional units, legal entities, and geographic locations.
Operational risk is the risk of adverse impacts to earnings, capital, or reputation resulting from inadequate or failed internal processes, people, and systems, or from external events. Operational risk is pervasive in that it exists in all business lines, functional units, legal entities, and geographic locations.
As of December 31, 2022 (dollars in thousands) SLM Corporation and Sallie Mae Bank Contracts Total exposure, net of collateral $ 11,566 Exposure to counterparties with credit ratings, net of collateral $ 11,566 Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3 — % Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3 — % 84 SLM CORPORATION — 2022 Form 10-K Regulatory Capital The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities.
As of December 31, 2023 (dollars in thousands) SLM Corporation and Sallie Mae Bank Contracts Total exposure, net of collateral $ 8,858 Exposure to counterparties with credit ratings, net of collateral $ 8,858 Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3 — % Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3 — % 2023 Form 10-K — SLM CORPORATION 75 Regulatory Capital The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities.
The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million.
The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our 76 SLM CORPORATION — 2023 Form 10-K deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million.
The following table summarizes our secured borrowings at December 31, 2022 and 2021.
The following table summarizes our secured borrowings at December 31, 2023 and 2022.
Long-Term Arrangements The loan servicing and administration agreement governs the terms by which Navient provides servicing, administration, and collection services for the Bank’s portfolio of FFELP Loans, as well as servicing history information 90 SLM CORPORATION — 2022 Form 10-K with respect to Private Education Loans previously serviced by Navient and access to certain promissory notes in Navient’s possession.
Long-Term Arrangements The loan servicing and administration agreement governs the terms by which Navient provides servicing, administration, and collection services for the Bank’s portfolio of FFELP Loans, as well as servicing history information with respect to Private Education Loans previously serviced by Navient and access to certain promissory notes in Navient’s possession.
At December 31, 2022, our contractual cash obligations due in the next year for secured borrowings and lease obligations were $729 million and $7 million, respectively, and our contractual cash obligations due thereafter for our secured borrowings, unsecured debt, and lease obligations were $3.5 billion, $1.0 billion, and $38 million, respectively.
At December 31, 2023, our contractual cash obligations due in the next year for secured borrowings and lease obligations were $724 million and $7 million, respectively, and our contractual cash obligations due thereafter for our secured borrowings, unsecured debt, and lease obligations were $3.5 billion, $1.0 billion, and $31 million, respectively.
The reasonable and supportable forecast period is meant to represent the period in which we believe we can estimate the impact of forecasted economic factors in our expected losses. At the end of the reasonable and supportable forecast period, we immediately revert our forecast of expected losses to our historical averages.
The reasonable and supportable forecast period is meant to represent the period in which we believe we can estimate the impact of forecasted economic factors in our expected losses. At the end of the reasonable and supportable forecast period, we immediately revert our forecasted economic factors to long-term historical loss conditions.
Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk type. The Enterprise Risk Committee (the “ERC”) provides oversight of the risk appetite framework with escalation to the Board of Directors, as appropriate.
Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk category. The Enterprise Risk Committee provides oversight of the risk appetite standard with escalation to the Board of Directors, as appropriate.
Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies” includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.
Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies” in this Form 10-K includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.
In addition, we currently limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years. We also now count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.
In addition, we currently limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years. We also now count the 68 SLM CORPORATION — 2023 Form 10-K number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.
See Item 1. “Business - Our Business - Private Education Loans” for a further discussion. (2) For the year ended December 31, 2022, the Graduate Loan originations include $1.8 million of Parent Loans and $29.1 million of Smart Option Loans where the student was in a graduate status.
See Item 1. “Business - Our Business - Private Education Loans” for a further discussion. (2) For the year ended December 31, 2023, the Graduate Loan originations include $29.4 million of Smart Option Loans where the student was in a graduate status.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+2 added−2 removed9 unchanged
Biggest changeTherefore, 1-month LIBOR is considered a core rate in our interest rate risk analysis. 1-month LIBOR and other rates are shocked in parallel for shock scenarios unless otherwise indicated. In addition, key rates are modeled with a floor, which indicates how low each specific rate is likely to move in practice.
Biggest changeIn addition, key rates are modeled with a floor, which indicates how low each specific rate is likely to move in practice. Rates are adjusted up or down via a set of scenarios that includes both rate shocks and ramps.
The following table summarizes the potential effect on earnings over the next 24 months and the potential effect on market values of balance sheet assets and liabilities at December 31, 2022 and 2021, based upon a sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and 300 basis points and a decrease of 100 and 300 basis points while credit and funding spreads remain constant.
The following table summarizes the potential effect on earnings over the next 24 months and the potential effect on market values of balance sheet assets and liabilities at December 31, 2023 and 2022, based upon a sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and 300 basis points and a decrease of 100 and 300 basis points while credit and funding spreads remain constant.
Further, such simulations do not represent our current view of expected future interest rate movements. Asset and Liability Funding Gap The table below presents our assets and liabilities (funding) arranged by underlying indices as of December 31, 2022.
Further, such simulations do not represent our current view of expected future interest rate movements. Asset and Liability Funding Gap The table below presents our assets and liabilities (funding) arranged by underlying indices as of December 31, 2023.
Rate shocks represent an immediate and sustained change in key rates, including both 1-month LIBOR and 30-day average SOFR, with the resulting changes in other indices correlated accordingly. Interest rate ramps represent a linear increase in those key rates over the course of 12 months, with the resulting changes in other indices correlated accordingly.
Rate shocks represent an immediate and sustained change in key rates, including 30-day average SOFR, with the resulting changes in other indices correlated accordingly. Interest rate ramps represent a linear increase in those key rates over the course of 12 months, with the resulting changes in other indices correlated accordingly.
The “Funding Gap” in the above table shows primarily mismatches in the 1-month LIBOR (monthly), fixed-rate, and Fed Funds Effective Rate categories. Changes in the Non-Discrete reset, 1-month LIBOR, 3-month LIBOR, and SOFR Rate categories are generally quite highly correlated, and should offset each other effectively.
The “Funding Gap” in the above table shows primarily mismatches in the Fed Funds Effective Rate, SOFR rate, 3-month SOFR, non-discrete reset, and fixed-rate categories. Changes in the Fed Funds Effective Rate and the daily, weekly, and monthly SOFR categories are generally quite highly correlated, and should offset each other effectively.
A number of potential interest rate scenarios are simulated using our asset liability management system. The Bank is the primary source of interest rate risk within the Company. At present, a significant portion of the Bank’s earning assets and a large balance of deposits are indexed to 1-month LIBOR.
A number of potential interest rate scenarios are simulated using our asset liability management system. The Bank is the primary source of interest rate risk within the Company. At December 31, 2022, a significant portion of the Bank’s earning assets and a large balance of deposits were indexed to 1-month LIBOR.
We use interest rate swaps and other derivatives to achieve our risk management objectives. Our asset liability management strategy is to match assets with debt (in combination with derivatives) that have the same underlying index and reset frequency or have interest rate characteristics that we believe are highly correlated.
Our asset liability management strategy is to match assets with debt (in combination with derivatives) that have the same underlying index and reset frequency or have interest rate characteristics that we believe are highly correlated.
As of December 31, 2022 2021 +300 Basis Points +100 Basis Points -100 Basis Points -300 Basis Points +300 Basis Points +100 Basis Points -100 Basis Points -300 Basis Points EAR - Shock +3.0 % +1.0 % -1.1 % -3.7 % +5.3 % +1.9 % N/A N/A EAR - Ramp +2.5 % +0.9 % -0.9 % -2.9 % +3.5 % +1.2 % N/A N/A EVE -9.5 % -3.2 % +3.1 % +6.2 % -5.9 % -1.9 % N/A N/A In the preceding tables, the interest rate sensitivity analysis reflects the balance sheet mix of fully variable LIBOR, SOFR, and Prime-based loans, and fully variable funding, including brokered CDs that have been converted to LIBOR or SOFR through derivative transactions.
As of December 31, 2023 2022 +300 Basis Points +100 Basis Points -100 Basis Points -300 Basis Points +300 Basis Points +100 Basis Points -100 Basis Points -300 Basis Points EAR - Shock -2.9 % -0.9 % +0.7 % +1.9 % +3.0 % +1.0 % -1.1 % -3.7 % EAR - Ramp -1.9 % -0.6 % +0.4 % +1.3 % +2.5 % +0.9 % -0.9 % -2.9 % EVE -26.0 % -8.9 % +8.8 % +25.9 % -9.5 % -3.2 % +3.1 % +6.2 % In the preceding tables, the interest rate sensitivity analysis reflects the balance sheet mix of fully variable SOFR and Prime-based loans, and fully variable funding, including brokered CDs that have been converted to SOFR through derivative transactions.
The EAR results for December 31, 2022 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. The EVE metrics demonstrate higher sensitivity than results from one year ago, but remain well within established trigger and threshold limits.
The EAR results for December 31, 2023 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. The EVE metrics demonstrate higher sensitivity than historic results, including results from one year ago.
While we believe this risk is low, as all of these indices are short-term with rate movements that are highly correlated over a long period of time, market disruptions (which have 2022 Form 10-K — SLM CORPORATION 103 occurred in recent years) can lead to a temporary divergence between indices, resulting in a negative impact to our earnings.
While we believe this risk is low, as all of these indices are short-term with rate movements that are highly correlated over a long period of time, market disruptions (which have occurred in recent years) can lead to a temporary divergence between indices, resulting in a negative impact to our earnings. 92 SLM CORPORATION — 2023 Form 10-K Weighted Average Life The following table reflects the weighted average lives of our earning assets and liabilities at December 31, 2023.
The funding in 3-month LIBOR bucket includes $0.3 billion of equity and the funding in the fixed-rate bucket includes $1.5 billion of equity and $0.4 billion of non-interest bearing liabilities. We consider our overall risk to be low and our strategies are designed to maintain low to moderate levels of market exposure.
The funding in the fixed-rate bucket includes $1.6 billion and $0.4 billion of non-interest bearing liabilities. We consider our overall risk to be low and our strategies are designed to maintain low to moderate levels of market exposure. We use interest rate swaps and other derivatives to achieve our risk management objectives.
As of December 31, 2022 (averages in years) Weighted Average Life Earning assets Education loans 4.95 Cash and investments 1.32 Total earning assets 4.00 Deposits Short-term deposits 0.92 Long-term deposits 2.43 Total deposits 1.29 Borrowings Long-term borrowings 3.38 Total borrowings 3.38 104 SLM CORPORATION — 2022 Form 10-K
As of December 31, 2023 (averages in years) Weighted Average Life Earning assets Education loans 5.03 Cash and investments 1.29 Total earning assets 4.12 Deposits Short-term deposits 0.68 Long-term deposits 2.05 Total deposits 0.99 Borrowings Long-term borrowings 3.24 Total borrowings 3.24 2023 Form 10-K — SLM CORPORATION 93
The EVE sensitivity is applied only to financial assets and liabilities, including hedging instruments, that existed at the balance sheet date, and does not reflect any impact of new assets, liabilities, commitments, or hedging instruments that may arise in the future. The 300-basis point downward rate shock was added to the model run for the first time in several years.
The EVE sensitivity is applied only to financial assets and liabilities, including hedging instruments, that existed at the balance sheet date, and does not reflect any impact of loan sales, new assets, liabilities, commitments, or hedging instruments that may arise in the future.
(Note that all fixed-rate assets and liabilities are aggregated into one line item, which does not capture the differences in time due to maturity.) As of December 31, 2022 (dollars in millions) Index Frequency of Variable Resets Assets Funding (1) Funding Gap Fed Funds Effective Rate daily/weekly/monthly $ — $ 1,494.9 $ (1,494.9) SOFR Rate daily/weekly/monthly 2,753.3 2,830.1 (76.8) 3-month Treasury bill weekly 95.2 — 95.2 Prime monthly 30.0 — 30.0 3-month LIBOR quarterly — 251.1 (251.1) 1-month LIBOR monthly 6,550.3 2,802.7 3,747.6 1-month LIBOR daily 513.8 — 513.8 Non-Discrete reset (2) daily/weekly 4,823.6 4,177.5 646.1 Fixed-Rate (3) 14,044.8 17,254.7 (3,209.9) Total $ 28,811.0 $ 28,811.0 $ — (1) Funding (by index) includes all derivatives that qualify as effective hedges.
(Note that all fixed-rate assets and liabilities are aggregated into one line item, which does not capture the differences in time due to maturity.) As of December 31, 2023 (dollars in millions) Index Frequency of Variable Resets Assets Funding (1) Funding Gap Fed Funds Effective Rate daily/weekly/monthly $ — $ 950.7 $ (950.7) SOFR Rate daily/weekly/monthly 7,639.0 5,020.5 2,618.5 3-month SOFR quarterly — 251.1 (251.1) 3-month Treasury bill weekly 86.0 — 86.0 Prime monthly 0.5 — 0.5 Non-Discrete reset (2) daily/weekly 4,354.0 3,741.9 612.1 Fixed-Rate (3) 17,090.0 19,205.3 (2,115.3) Total $ 29,169.5 $ 29,169.5 $ — (1) Funding (by index) includes all derivatives that qualify as effective hedges.
Also considered is the impact of FFELP Loans, which receive floor income in low interest rate environments, and will therefore not reprice fully with interest rate shocks. Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, and size of our balance sheet.
Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, and size of our balance sheet.
The analysis assumes that retail MMDAs and retail savings balances, while relatively sensitive to interest rate changes, will not correlate 100 percent to the full interest rate 102 SLM CORPORATION — 2022 Form 10-K shocks or ramps.
The analysis assumes that retail MMDAs and retail savings balances, while relatively sensitive to interest rate changes, will not correlate 100 percent to the full interest rate shocks or ramps. 2023 Form 10-K — SLM CORPORATION 91 Also considered is the impact of FFELP Loans, which receive floor income in low interest rate environments, and will therefore not reprice fully with interest rate shocks.
Removed
On April 1, 2021, we began offering variable-rate Private Education Loans based on the 30-day average SOFR, replacing 1-month LIBOR for new originations. Rates are adjusted up or down via a set of scenarios that includes both rate shocks and ramps.
Added
As of their first repricing date after the LIBOR Cessation Date, these legacy assets and liabilities were converted to various SOFR fallback rates plus a spread adjustment and are modeled accordingly. Rates are shocked in parallel for shock scenarios unless otherwise indicated.
Removed
Weighted Average Life The following table reflects the weighted average lives of our earning assets and liabilities at December 31, 2022.
Added
This is due to an increase in the mix of fixed-rate versus variable-rate loan disbursements, which results in our liabilities repricing more quickly than our assets over time. Planned loan sales, which are not included in the static EVE modeling, significantly reduce this exposure. Management is evaluating this trend to determine if further actions are necessary to manage EVE sensitivity.

Other SLM 10-K year-over-year comparisons