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SLM Corp

SLM CorpSLMEarnings & Financial Report

Nasdaq · Financials · Personal Credit Institutions

Nikon SLM Solutions AG, headquartered in Lübeck, Germany, is a manufacturer of 3D metal printers listed on the stock market and co-owner of the word mark SLM. The shares of SLM Solutions Group AG have been listed in Prime Standard of the Frankfurt Stock Exchange since May 9, 2014.

What changed in SLM Corp's 10-K — 2023 vs 2024

Top changes in SLM Corp's 2024 10-K

519 paragraphs added · 667 removed · 425 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

85 edited+16 added−55 removed71 unchanged
Additionally, numerous other states have enacted or are in the process of enacting state-level data privacy and security laws and regulations relating to the collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information.
Additionally, numerous other states have enacted or are in the process of enacting state-level data privacy and data security laws and regulations relating to the collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information.
Our 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.
Our 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 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.
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.
Sallie Mae created a Graduated Repayment Period program (“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 GRP.
Our primary Private Education Loan product is the Smart Option Student Loan, which emphasizes in-school payment features that can produce shorter terms and reduce customers’ total finance charges. Customers generally elect one of three Smart Option repayment types at the time of loan origination.
Our primary Private Education Loan product is the Smart Option Student Loan, which emphasizes in-school payment features that can produce shorter terms and reduce customers’ total finance charges. Customers elect one of three Smart Option repayment types at the time of loan origination.
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.
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. Consider a responsible private student loan. Fill the gap between available resources and any remaining costs of higher education.
Misuse of or failure to secure certain personal information could result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility, and could negatively affect our business, financial condition, and results of operations.
Misuse of or failure to secure certain personal information could result in violation of data privacy or data security laws and regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility, and could negatively affect our business, financial condition, and results of operations.
We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under the share repurchase programs.
We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under the Company’s share repurchase programs.
“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.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” for additional information about our credit administration practices.
In 2024, we plan to transition the related Nitro branding to the Sallie and Sallie Mae brands and platforms. In 2023, we completed the acquisition of several key assets of Scholly, Inc.
In 2024, we completed the transition of the related Nitro branding to the Sallie and Sallie Mae brands and platforms. In 2023, we completed the acquisition of several key assets of Scholly, Inc.
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.
Bureau of Labor and Statistics confirms those with bachelor’s degrees earn 66 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.
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.
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. 2024 Form 10-K — SLM CORPORATION 15 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.
Oversight of Derivatives Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central intermediaries to reduce counterparty risk. Two of the central intermediaries we use are the Chicago Mercantile Exchange (the “CME”) and the London Clearing House (the “LCH”).
Oversight of Derivatives Title VII of the Dodd-Frank Act requires certain standardized derivatives, including most interest rate swaps, to be submitted for clearing to central intermediaries to reduce counterparty risk. Two of the central intermediaries we use are the Chicago Mercantile Exchange (the “CME”) and the London Clearing House (the “LCH”).
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.
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 Servicemembers Civil Relief Act, 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, 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; 2024 Form 10-K — SLM CORPORATION 14 • 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.
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.
Customers generally may prevent financial institutions from sharing nonpublic personal information with unaffiliated third parties, with some exceptions. Financial institutions generally may not disclose certain consumer or account information to any unaffiliated third party for use in telemarketing, direct mail marketing, or other marketing.
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.
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 online chat function for application support and customer service related inquiries; • 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.
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.
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 our total loan portfolio, approximately 96 percent of loans in repayment are in good standing, and, on average, fewer than 3 percent of loans default annually.
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.
The addition of Scholly assets supports our mission of providing students with the confidence needed to successfully navigate the higher education journey. 2024 Form 10-K — SLM CORPORATION 9 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.
Undercapitalized insured depository institutions generally may not accept, renew, or roll over brokered deposits. For more information on the Bank’s deposits, see Part II, Item 7.
Undercapitalized insured depository institutions generally may not accept, renew, or roll over brokered deposits. For more information on the Bank’s deposits, see Item 7.
Our human capital strategy is focused on the attraction, development, empowerment, recognition, and rewarding of team members as they bring our mission to life. As of December 31, 2023, we had approximately 1,740 team members, all located in the United States. We believe an engaged workforce leads to a more innovative, productive, and profitable company.
Our human capital strategy is focused on the attraction, development, empowerment, recognition, and rewarding of team members as they bring our mission to life. As of December 31, 2024, we had approximately 1,710 team members, all located in the United States. We believe an engaged workforce leads to a more innovative, productive, and profitable company.
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.
This has a minimal impact on historically-stated numbers. 2024 Form 10-K — SLM CORPORATION 13 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.
Privacy Laws The federal banking regulators, as required by the Gramm-Leach-Bliley Act (“GLBA”), have adopted regulations that limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to nonaffiliated third parties. Financial institutions are required to disclose to consumers their policies for collecting and protecting confidential customer information.
Data Privacy and Data Security Laws and Regulations The federal banking regulators, as required by the Gramm-Leach-Bliley Act (“GLBA”), have adopted regulations that limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to unaffiliated third parties. Financial institutions are required to disclose to consumers their policies for collecting and protecting confidential customer information.
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.
In 2022, we acquired the assets of Epic Research Education Services, LLC, which did business as Nitro College (“Nitro”). Nitro provided resources that helped students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.
(“Scholly”), which is engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products that offer custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers.
(“Scholly”), which was engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products that offered custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers.
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.
Our on-campus efforts with more than 2,000 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.
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.
For 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; 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.
It has authority to prevent unfair, deceptive, or abusive acts and practices by issuing regulations or by using its enforcement authority without first issuing regulations. The CFPB has been active in its supervision, examination, and enforcement of financial services companies, notably bringing enforcement actions, imposing fines, and mandating large refunds to customers of several large banking institutions.
It has authority to prevent unfair, deceptive, or abusive acts and practices by issuing regulations or by using its enforcement authority without first issuing regulations. Under the Biden Administration, the CFPB was active in its supervision, examination, and enforcement of financial services companies, notably bringing enforcement actions, imposing fines, and mandating large refunds to customers of several large banking institutions.
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
In 2024, our team members donated approximately 4,700 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. 2024 Form 10-K — SLM CORPORATION 20
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.
Federal and state banking agencies have adopted regulations for maintaining the security and confidentiality of consumer information, and the Bank is subject to such regulations, as well as certain federal and state laws or regulations for notifying consumers in the event of a security breach.
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.
In addition, we must comply with increasingly complex and rigorous data privacy and data security laws and regulations enacted or adopted to protect business and personal information. These laws and regulations impose additional obligations on companies regarding the handling of personal information and provide certain individual privacy rights to persons whose personal information is stored and shared.
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.
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 more than half of the Private Education Loans the Bank originated during 2024.
On April 30, 2014, we legally separated (the “Spin-Off”) from another public company that is now named Navient Corporation (“Navient”), which is in the education loan management, servicing, asset recovery, and consolidation loan business.
On April 30, 2014, we legally separated (the “Spin-Off”) from another public company that is now named Navient Corporation (“Navient”), which is in the education loan management, consolidation loan, and business processing businesses.
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.
Department of Education’s projections, the enrollment in four-year degree granting institutions is projected to remain relatively flat through 2031. 2 ______________________ 1 Source: Enterval Analytics LLC 2024 Q3 Private Student Loan Report, November 2024. 2 Source: U.S. Department of Education, National Center for Education Statistics, Enrollment in Degree-Granting Institutions Projection Model, through 2031.
These laws may also include requirements pertaining to payment processing, customer communications, the handling of customer inquiries and complaints, information concerning loan repayment options, access to borrower account records, the processing of disability applications and borrower requests to remove cosigners from loans, and debt collection, among other requirements.
These laws may also include requirements pertaining to payment processing, customer communications, the handling of customer inquiries and complaints, information concerning loan repayment options, access to borrower account records, the processing of disability applications and borrower requests to remove cosigners from loans, and debt collection, among other 2024 Form 10-K — SLM CORPORATION 18 requirements.
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.
Average published tuition and fees at public and private four-year not-for-profit institutions grew 2.9 percent and 4.5 percent, respectively, between AYs 2022-2023 and 2023-2024 and 2.7 percent and 3.9 percent, respectively, between AYs 2023-2024 and 2024-2025. 3 Published Tuition and Fees 3 (Dollars in actuals) 3 Source: The College Board-Trends in College Pricing 2024. © 2024 The College Board.
If other states in the U.S. adopt similar laws or if a comprehensive federal data privacy law is enacted, we may expend considerable additional resources to meet these requirements and the overall risk to the Company could incrementally increase depending upon the reach and application of any such laws.
If other states in the U.S. adopt similar laws or if a comprehensive federal data privacy or data security law is enacted, or if regulators whose authority we are subject to adopt additional or amend existing data privacy or data security regulations, we may expend considerable additional resources to meet these requirements and the overall risk to the Company could incrementally increase depending upon the reach and application of any such laws or regulations.
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.
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. 2024 Form 10-K — SLM CORPORATION 12 • We estimate total spending on higher education was $506 billion in AY 2023-2024, up from $465 billion in AY 2019-2020.
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.
Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2031 (NCES 2024, January 2024), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing and Student Aid 2024. © 2024 The College Board and Company analysis. Other sources for these data points also exist publicly and may vary from our computed estimates.
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.
The College Board restates its data annually, which may cause previously reported results to vary. 2024 Form 10-K — SLM CORPORATION 11 Sources of Funding Private Education Loan originations were an estimated $11.5 billion in AY 2023-2024, an increase of $0.5 billion from AY 2022-2023. 4 _______ 4 Source: The College Board-Trends in Student Aid 2024© The College Board.
These are the most recent sources available to us for this information. 8 SLM CORPORATION — 2023 Form 10-K Tuition Rates • Average published tuition and fees (exclusive of room and board) at four-year public and private not-for-profit institutions increased at compound annual growth rates of 1.9 percent and 3.0 percent, respectively, from AYs 2019-2020 through 2023-2024.
These are the most recent sources available to us for this information. 2022/2023 is an estimate. 2024 Form 10-K — SLM CORPORATION 10 Tuition Rates • Average published tuition and fees (exclusive of room and board) at four-year public and private not-for-profit institutions increased at compound annual growth rates of 2.4 percent and 3.9 percent, respectively, from AYs 2020-2021 through 2024-2025.
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.
At the state level, 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.
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.
At December 31, 2024, 3.7 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 2.5 percent of loans in repayment and forbearance. In 2024, Private Education Loan net charge-offs as a percentage of average loans in repayment were 2.19 percent.
The Volcker Rule does not have a meaningful effect on our current operations or those of our subsidiaries, as we do not materially engage in the businesses prohibited by the Volcker Rule. Human Capital Resources and Talent Development We believe in a just and inclusive, values-based, mission-led culture that inspires commitment and drives performance.
The Volcker Rule 2024 Form 10-K — SLM CORPORATION 19 does not have a meaningful effect on our current operations or those of our subsidiaries, as we do not materially engage in the businesses prohibited by the Volcker Rule. Human Capital Resources and Talent Development We believe in a mission-led culture that inspires commitment and drives performance.
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.
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, 2024, $850 million notional of our derivative contracts were cleared on the CME and $71 million were cleared on the LCH.
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.
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 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 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.
The derivative contracts cleared through the CME and LCH represent 92.3 percent and 7.7 percent, respectively, of our total notional derivative contracts of $921 million at December 31, 2024. Our exposure on these derivative contracts is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.
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.
Due to the lower cost of two-year programs, federal grant and loan programs are typically sufficient for the funding needs of these students. Approximately 18 percent or $1.31 billion of our 2024 Private Education Loan originations were for students attending for-profit schools.
We originated approximately $6.4 billion of Private Education Loans in 2023, an increase of 7 percent from the year ended December 31, 2022. As of December 31, 2023, we had $19.8 billion of Private Education Loans held for investment, net, outstanding.
We originated approximately $7.0 billion of Private Education Loans in 2024, an increase of 10 percent from the year ended December 31, 2023. As of December 31, 2024, we had $20.9 billion of Private Education Loans held for investment, net, outstanding.
We strive to create a diverse culture of inclusion — an environment that encourages and reinforces mutual trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces diverse backgrounds and perspectives to power and fuel our mission. We believe that a diverse and inclusive workforce can lead to a more effective company.
We strive to create a culture of belonging — an environment that encourages and reinforces mutual trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces all backgrounds and perspectives to power and fuel our mission.
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.
For Private Education Loans originated during the year ended December 31, 2024, our average FICO scores (representing the higher credit scores of the cosigners or borrowers) at the time of original approval were 752, and approximately 90 percent of 2024 Form 10-K — SLM CORPORATION 6 those loans were cosigned.
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.
The Bank’s insurance assessment base currently is its average consolidated total assets minus its average tangible equity during the assessment period.
We manage this risk by underwriting and pricing based on customized credit scoring criteria and the addition of qualified cosigners.
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.
Sallie Mae Bank The Bank, which is regulated by the Utah Department of Financial Institutions (the “UDFI”), the FDIC, and the Consumer Financial Protection Bureau (the “CFPB”), offers traditional savings products, such as high-yield savings accounts, money market accounts, and certificates of deposit (“CDs”), originates Private Education Loans, and manages a loan portfolio that also includes loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP Loans”).
Sallie Mae Bank The Bank, which is regulated by the Utah Department of Financial Institutions (the “UDFI”), the FDIC, and the Consumer Financial Protection Bureau (the “CFPB”), offers traditional savings products, such as high-yield savings accounts, money market accounts, and certificates of deposit (“CDs”), and originates Private Education Loans.
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.
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.
This option is available after 12 principal and interest payments are made and the student borrower demonstrates an ability to assume sole responsibility for repayment of the loan.
This option is available after 12 principal and interest payments are made and the student borrower demonstrates an ability to assume sole responsibility for repayment of the loan. In the event of a cosigner’s death, the student borrower automatically continues as the sole individual on the loan with the same terms.
General The Bank is currently subject to prudential regulation and examination by the FDIC and the UDFI, and consumer compliance regulation and examination by the CFPB. Numerous other federal and state laws and regulations govern almost all aspects of the operations of the Bank and, to some degree, our operations and those of our non-bank subsidiaries as institution-affiliated parties.
Numerous other federal and state laws and regulations govern almost all aspects of the operations of the Bank and, to some degree, our operations and those of our non-bank subsidiaries as institution-affiliated parties.
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.
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.
These include the Sallie Mae Law School Loan, the Sallie Mae MBA Loan, the Sallie Mae Graduate School Loan for Health Professions, the Sallie Mae Medical School Loan, the Sallie Mae Dental School Loan, and the Sallie Mae Graduate School Loan.
We also offer six loan products for specific graduate programs of study. These include the Sallie Mae Law School Loan, the Sallie Mae MBA Loan, the Sallie Mae Graduate School Loan for Health Professions, the Sallie Mae Medical School Loan, the Sallie Mae Dental School Loan, and the Sallie Mae Graduate School Loan.
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.
“Business — Supervision and Regulation — Regulation of Sallie Mae Bank” for additional details about the Bank. 2024 Form 10-K — SLM CORPORATION 7 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.
This represents a significant change from the past in which states generally did not issue laws and regulations tailored specifically to the student loan origination and servicing industry. Consumer Protection Laws and Regulations Our origination, servicing, first-party collection, and deposit taking activities subject us to federal and state consumer protection, privacy, and related laws and regulations.
This represents a significant change from the past in which states generally did not issue laws and regulations tailored specifically to the student loan origination and servicing industry.
In addition, for all loans other than Bar Study loans and Residency and Relocation loans, we require school certification of both the need for, and the amount of, every Private Education Loan we originate (to prevent unnecessary borrowing beyond a school’s cost of attendance), and we disburse the loan proceeds directly to the higher education institutions to ensure loan proceeds are applied directly to the student’s education expenses. 4 SLM CORPORATION — 2023 Form 10-K The core of our marketing strategy is to promote our products on campuses through financial aid offices as well as through online and direct marketing to students and families.
In addition, for all loans other than Bar Study loans and Residency and Relocation loans, we require school certification of both the need for, and the amount of, every Private Education Loan we originate (to prevent unnecessary borrowing beyond a school’s cost of attendance), and we disburse the loan proceeds directly to the higher education institutions to ensure loan proceeds are applied directly to the student’s education expenses.
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.
Enterval LLC. Funding sources in current dollars and include federal and private student loan data. 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 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.
The Bank declared $570 million, $550 million, and $700 million in dividends for the years ended December 31, 2024, 2023, and 2022, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends.
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 financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial condition. For more information on how the Bank manages its capital position, see Item 7.
Private Education Loan originations increased $2 million from the year-ago period to an estimated $15 billion in AY 2022-2023, and represent just 3.1 percent of total spending on higher education.
Private Education Loan originations decreased $1 billion from the year-ago period to an estimated $13 billion in AY 2023-2024, and represent just 2.6 percent of total spending on higher education. 5 • Over the AYs 2019-2024 period, increases in total spending have been absorbed primarily through increased family contributions.
The Private Education Loan Ombudsman is required by law to report to Congress annually on the trends and issues identified through this process. The CFPB continues to take an active interest in the student loan industry, undertaking a number of initiatives related to the private education loan market and student loan servicing.
The CFPB continues to take an active interest in the student loan industry, undertaking a number of initiatives related to the private education loan market and student loan servicing. The CFPB and the U.S.
We expect the Bank or affiliates of the Bank to retain servicing of all Private Education Loans the Bank originates, regardless of whether the loans are held, sold, or securitized.
Customer Service We perform the origination, servicing, and collections activities for all of our Private Education Loans with dedicated representatives assisting customers with various needs. We expect the Bank or affiliates of the Bank to retain servicing of all Private Education Loans the Bank originates, regardless of whether the loans are held, sold, or securitized.
The CFPB is the Bank’s primary consumer compliance supervisor with compliance examination authority and primary consumer protection enforcement authority. The UDFI and FDIC remain the prudential regulatory authorities with respect to the Bank’s financial strength. The Private Education Loan Ombudsman within the CFPB is authorized to receive and attempt to informally resolve inquiries about private education loans.
The enforcement and regulatory posture of the CFPB under the Trump Administration is unclear. The CFPB is the Bank’s primary consumer compliance supervisor with compliance examination authority and primary consumer protection enforcement authority. The UDFI and FDIC remain the prudential regulatory authorities with respect to the Bank’s financial strength.
(The grace period for a Smart Option Student Loan generally runs for six months after the borrower separates from school, but can run for up to 36 months for a small subset of graduate loans.) Lower interest rates on the interest only and fixed payment options encourage customers to elect those options, which help customers reduce their total loan cost compared with the traditional deferred option loan.
The grace period for a Smart Option Student Loan generally runs for six months after the borrower separates from school, and can run for up to 36 months for a small subset of graduate loans.
These products were designed to address the specific needs of graduate students, such as extended grace periods for medical students. 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.
These products were designed to address the specific needs of graduate students, such as longer grace periods for medical students. We also offer two non-cost of attendance loans to support bar study preparation, as well as residency and relocation expenses for medical and dental school students. We regularly review and update the terms of our Private Education Loan products.
However, we and our non-bank subsidiaries are subject to regulation and oversight as institution-affiliated parties. The following discussion sets forth some of the elements of the bank regulatory framework applicable to us, the Bank, and our other non-bank subsidiaries.
The following discussion sets forth some of the elements of the bank regulatory framework applicable to us, the Bank, and our other non-bank subsidiaries. General The Bank is currently subject to prudential regulation and examination by the FDIC and the UDFI, and consumer compliance regulation and examination by the CFPB.
Volcker Rule In December 2013, the U.S. banking agencies, the SEC, and the U.S. Commodity Futures Trading Commission issued final rules to implement the “Volcker Rule” provisions of the Dodd-Frank Act. The rules prohibit insured depository institutions and their affiliates from engaging in proprietary trading and from investing in, sponsoring, or having certain financial relationships with, certain private funds.
Commodity Futures Trading Commission that prohibit insured depository institutions and their affiliates from engaging in proprietary trading and from investing in, sponsoring, or having certain financial relationships with, certain private funds.
Our telephone number is (302) 451-0200. ______________________ 1 “ Education pays, 2022,” Career Outlook , U.S. Bureau of Labor Statistics, May 2023. 2 https://research.collegeboard.org/trends/education-pays 2023 Form 10-K — SLM CORPORATION 3 Our Business Our business is focused and aligned to strategic imperatives that set the foundation for our continued success.
Our telephone number is (302) 451-0200. ______________________ 1 “ Education pays, 2023,” Career Outlook , U.S. Bureau of Labor Statistics, August 2024. 2 https://research.collegeboard.org/trends/education-pays.
Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to sustain our Private Education Loan originations and achieve other business goals. Our ability to obtain such funding is dependent, in part, on the capital levels of the Bank and its compliance with other applicable regulatory requirements.
In the fourth quarter of 2024, the Bank sold its remaining portfolio of FFELP Loans to an unaffiliated third party. As of December 31, 2024, the Bank held no FFELP Loans. Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to sustain our Private Education Loan originations and achieve other business goals.
The time frame for electing to participate in the GRP begins six months before expiration of a borrower’s grace period and extends until 12 months after the expiration of the grace period. The 12-month interest-only payments under the GRP begin upon expiration of a borrower’s grace period or election of the GRP, whichever is later.
Generally, the 12-month interest-only payments under GRP begin upon expiration of a borrower’s grace period or election of GRP, whichever is later. After graduation, a student borrower may apply for the cosigner to be released from the loan.
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.
When we grant forbearance or modify a loan, we counsel customers on the effect the forbearance or modification will have on their loan balance. See Item 7.
Treasury Department has issued and, in some cases, proposed a number of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank.
Treasury Department has issued a number of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank. These regulations impose obligations on financial institutions to maintain appropriate internal policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity of their customers.
Community Reinvestment Act The Community Reinvestment Act (the “CRA”) requires the FDIC to evaluate the record of the Bank in meeting the credit needs of its local community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. These evaluations are considered in evaluating mergers, acquisitions, and applications to open a branch or facility.
Any loan by us to the Bank would be subordinate in right of payment to depositors and to certain other indebtedness of the Bank. 2024 Form 10-K — SLM CORPORATION 17 Community Reinvestment Act The Community Reinvestment Act (the “CRA”) requires the FDIC to evaluate the record of the Bank in meeting the credit needs of its local community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution.
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.
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. If the customer is in financial hardship, we work with the customer and/or cosigner and identify potential alternative arrangements designed to reduce monthly payment 2024 Form 10-K — SLM CORPORATION 8 obligations.
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.
Lower interest rates on the interest only and fixed payment options encourage customers to elect those options, which help reduce total loan cost compared with the traditional deferred option loan. 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.
Regulation of Sallie Mae Bank The Bank was chartered in 2005 and is a Utah industrial bank regulated by the FDIC, the UDFI, and the CFPB. We are not a bank holding company under the Bank Holding Company Act and therefore are not subject to the federal regulations applicable to bank holding companies.
We are not a bank holding company under the Bank Holding Company Act and therefore are not subject to the federal regulations applicable to bank holding companies. However, we and our non-bank subsidiaries are subject to regulation and oversight as institution-affiliated parties.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
Many of these adverse impacts can occur in an inflationary and/or 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.
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.
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, 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.
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.
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 make it difficult or impossible for us to deliver a satisfactory experience to our customers or could decrease demand for our products and services.
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.
Third-party vendors are significantly involved in aspects of our servicing for Private Education 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.
Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities specifically assumed by the Bank in the agreement as to which the Bank would be obligated to indemnify Navient.
Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally responsible for, and obligated to indemnify the Bank against, all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities specifically assumed by the Bank in the agreement as to which the Bank would be obligated to indemnify Navient.
“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 a discussion of how items such as changes in credit administration practices can impact the timing and level of delinquencies and defaults on our loans.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” for a discussion of how items such as changes in credit administration practices can impact the timing and level of delinquencies and defaults on our loans.
Reauthorization, as well as measures to provide relief for borrowers of student loans in general, could provide a legislative vehicle for changes to student loan programs. Possible components that could impact the Private Education Loan market and our business include changes to federal education loan limits and/or payment requirements, private loan refinancing programs, or Private Education Loan forgiveness.
Reauthorization, as well as measures to provide relief for borrowers of student loans in general, could provide a legislative vehicle for changes to student loan programs. Possible components that could impact the Private Education Loan market and our business include changes to federal education loan limits and/or payment requirements, or private loan refinancing programs.
These vehicles include, among others: • Home equity loans or other borrowings available to families to finance their education costs; • Pre-paid tuition plans, which allow students to pay tuition at today’s rates to cover tuition costs in the future; • Section 529 plans, which include both pre-paid tuition plans and college savings plans that allow a family to save funds on a tax-advantaged basis; • Education IRAs, now known as Coverdell Education Savings Accounts, under which a holder can make annual contributions for education savings; • Government education loan programs such as the DSLP; and • Direct loans from colleges and universities, as well as income sharing agreements offered by schools and facilitated by private companies.
These vehicles include, among others: • Home equity loans or other borrowings available to families to finance their education costs; • Pre-paid tuition plans, which allow students to pay tuition at today’s rates to cover tuition costs in the future; • Section 529 plans, which include both pre-paid tuition plans and college savings plans that allow a family to save funds on a tax-advantaged basis; • Education IRAs, now known as Coverdell Education Savings Accounts, under which a holder can make annual contributions for education savings; • Government education loan programs; and • Direct loans from colleges and universities, as well as income sharing agreements offered by schools and facilitated by private companies.
Negative publicity, including as a result of our culture, actual or alleged conduct by us, our employees, or our vendors, or public opinion of the student loan industry or other relevant industries generally, could damage our reputation and business and adversely impact the price of our common stock or other securities.
Negative publicity, including as a result of our culture, actual or alleged conduct by us, our employees, or our vendors, or public opinion of the broader student loan industry or other relevant industries generally, could damage our reputation and business and adversely impact the price of our common stock or other securities.
We are also subject to risks associated with changes in repayment and prepayment rates on Private Education Loans, which can increase uncertainty as we manage our interest rate risk. Consolidations and refinancings contribute to increased prepayment rates.
We are subject to risks associated with changes in repayment and prepayment rates on Private Education Loans, which can increase uncertainty as we manage our interest rate risk. Consolidations and refinancings contribute to increased prepayment rates.
Additionally, as described above, proposals of political candidates, administrations, or legislators that may affect the financial industry, or the student loan industry in particular, could damage our reputation and business and adversely impact the price of our common stock.
Additionally, as described above, proposals of political candidates, administrations, or legislators that may affect the financial industry, or the student loan industry, in particular, could impact our reputation and/or business and adversely impact the price of our common stock.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our stock. • Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors.
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our securities. • Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors.
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.
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 portfolio, as such factors may cause borrowers and cosigners to experience trouble repaying credit obligations or meeting our credit standards.
The results of these scenarios may lead management to determine, or our regulators to demand, that higher levels of liquidity be maintained at significant incremental expense to the Bank. 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.
The results of these scenarios may lead management to determine, or our regulators to demand, that higher levels of capital be maintained at significant incremental expense to the Bank. 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.
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.
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 2024 Form 10-K — SLM CORPORATION 25 allowance or recognition of additional charge-offs based on judgments different than those used by our management.
These Risk Factors, together with other information in this Form 10-K and our other filings with the SEC, should be carefully considered before making an investment decision regarding our stock. CONCENTRATION RISK Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors.
These Risk Factors, together with other information in this Form 10-K and our other filings with the SEC, should be carefully considered before making an investment decision regarding our securities. CONCENTRATION RISK Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors.
If these differences in judgment are significant, our allowance could increase significantly and result in sizable decreases in our net income and capital. See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Credit Losses” for further details regarding our allowance for credit losses .
If these differences in judgment are significant, our allowance could increase significantly and result in sizable decreases in our net income and capital. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Credit Losses” for further details regarding our allowance for credit losses .
We also routinely transmit and receive personal, confidential, and proprietary information, some through third parties, which may be vulnerable to interception, misuse, or mishandling. This risk may be heightened by our hybrid work environment, which may lead to unanticipated issues arising from handling personal, confidential, and other information from a less efficient work-from-home environment.
We also routinely transmit and receive personal, confidential, and proprietary information, some through third parties, which may be vulnerable to interception, misuse, or mishandling. This risk may be heightened by our hybrid work environment, which may lead to unanticipated issues arising from handling personal, confidential, and other information from a work-from-home environment.
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.
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 may affect the availability of our services, and impose costs and other liabilities that significantly and adversely affect us in the ways discussed above.
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 are subject to the requirements of entities that set and interpret the accounting standards governing the preparation of our financial statements and other financial reports.
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 operations, and/or financial condition. We are subject to the requirements of entities that set and interpret the accounting standards governing the preparation of our financial statements and other financial reports.
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 sell loans at attractive prices, as well as the timing and volume of any sales, will be subject to market conditions and competitive purchasers, 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.
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.
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.
Stakeholders’ expectations regarding ESG practices are diverse and rapidly changing, and we may not be able to align our ESG practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.
Stakeholders’ expectations are diverse and rapidly changing, and we may not be able to align our practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.
The impact of these factors may be heightened in rising or high interest rate environments when interest rates rise causing payments on variable-rate loans to increase. See Part II, Item 7.
The impact of these factors may be heightened in rising or high interest rate environments when interest rates rise causing payments on variable-rate loans to increase. See Item 7.
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.
In 2024, 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.
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. Our risk management framework seeks to mitigate risk and appropriately balance risk and return.
Our framework for managing risks, including model risk and data governance risk, may not be effective in mitigating our risk of loss in all possible scenarios and, if the framework is ineffective, could have a material adverse effect on us and our business. Our risk management framework seeks to mitigate risk and appropriately balance risk and return.
If 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.
If 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. 2024 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 in all possible scenarios and, if the framework is ineffective, could have a material adverse effect on us. • Proposals of federal and state governments, or of various political officials or 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 and other risks, 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. • We may have exposure to risks related to the Spin-Off, indemnification claims, and/or Navient’s creditworthiness. • The holders of our preferred stock have rights that are senior to those of our common stockholders. • 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. 2024 Form 10-K — SLM CORPORATION 22 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.
In transactions involving the sale of loans in non-securitized form where we remain the servicer of the loans, it is possible we could be sued and ultimately held liable to the purchaser of the loans or another transaction party for breaches of representations or warranties or breaches of servicing covenants.
In transactions involving the sale of loans in non-securitized form where we remain the servicer of the loans, it is possible we could be subject to claims and ultimately held liable to the purchaser of the loans or another transaction party for breaches of representations or warranties or breaches of servicing covenants.
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. 38 SLM CORPORATION — 2023 Form 10-K 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.
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 stockholders. 2024 Form 10-K — SLM CORPORATION 38 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 CFPB/ DOE MOU could lead to additional complaints received by the CFPB regarding us, which could lead to additional scrutiny of us and increase our costs. Consent orders, decrees, or settlements entered into with governmental agencies may also increase our compliance costs or restrict certain of our activities.
Complaints received by the CFPB regarding us could lead to additional scrutiny of us and increase our costs. Consent orders, decrees, or settlements entered into with governmental agencies may also increase our compliance costs or restrict certain of our activities.
Our business is dependent on our ability to process and monitor large numbers of transactions in compliance with legal and regulatory standards and our product specifications. As processing demands change and our loan portfolios grow in both volume and differing terms and conditions, developing and maintaining our operating systems and infrastructure become increasingly challenging.
Our business is dependent on our ability to process and monitor large numbers of transactions in compliance with legal and regulatory standards and our product specifications. As processing demands change and our loan portfolio grows in both volume and differing terms and conditions, developing and maintaining our operating systems and infrastructure become increasingly challenging.
If any of those liabilities are significant, they could adversely affect our business, financial condition, results of operations, and/or cash flows. Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial condition and results of operations. In 2023, several financial services institutions failed or required outside liquidity support.
If any of those liabilities are significant, they could adversely affect our business, financial condition, results of operations, and/or cash flows. Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial condition and results of operations. In the past couple of years, several financial services institutions failed or required outside liquidity support.
This environment could lead to further proposals by political candidates and state and federal legislators and regulators, and to the enactment of laws and regulations, applicable to, or limiting, our business.
This environment could lead to further proposals by federal and state legislators and regulators, and/or political officials or candidates, and to the enactment of laws, regulations, and/or executive orders applicable to, or limiting, our business.
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.
Further, the regulatory environment at the state level has shifted such that some states recently have enacted new legislation specifically restricting the conduct and practices of student loan servicers.
See also “- LIQUIDITY RISK.” 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 our business, financial condition, results of operations, and/or cash flows.
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 our business, financial condition, results of operations, and/or cash flows.
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.
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 2024 Form 10-K — SLM CORPORATION 37 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.
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.
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 of any payment suspension programs it may implement from time to time for borrowers of federal student loans (including the suspension program initiated during the COVID-19 pandemic), the invalidation or failure of efforts to forgive or lessen the burden of federal student loan indebtedness for certain borrowers, and unforeseen events or trends.
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.
Our allowance for credit losses may not be adequate to cover actual losses in all possible scenarios, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition, and/or results of operations.
Other components of any legislation also could have a negative impact on our business and financial condition. See “— POLITICAL/REPUTATIONAL RISK.” We also face substantial competition for our online deposit products. We expect to compete based primarily on a combination of reputation, rate, and availability of information about our deposit products.
Other components of any legislation also could have a negative impact on our business and financial condition. See “— POLITICAL/REPUTATIONAL RISK” in this Item 1A. We also face substantial competition for our online deposit products. We expect to compete based primarily on a combination of reputation, rate, and availability of information about our deposit products.
In addition, changes in the regulatory and supervisory environments could adversely affect us in substantial and unpredictable ways, including by limiting the types of financial services and products we may offer, enhancing the ability of others to offer more competitive financial services and products, restricting our ability to make acquisitions or pursue other profitable opportunities, and negatively impacting our financial condition and results of operations.
In addition, changes in the regulatory and supervisory environments could adversely affect us in substantial and unpredictable ways, including by limiting the types of financial services and products we may offer, enhancing 2024 Form 10-K — SLM CORPORATION 31 the ability of others to offer more competitive financial services and products, restricting our ability to make acquisitions or pursue other profitable opportunities, and negatively impacting our financial condition and results of operations.
Delinquencies are an important indicator of the potential future credit performance of our loan portfolios.
Delinquencies are an important indicator of the potential future credit performance of our loan portfolio.
Notwithstanding our efforts to maintain business continuity, a disruptive event impacting our processing locations, a failure to adequately anticipate the level of staffing or effort needed to efficiently and effectively communicate with and service our customers or to service and collect on our loans, or another similar operational event could adversely affect our business, financial condition, results of operations, and/or cash flows.
Notwithstanding our efforts to maintain business continuity, a disruptive event impacting our processing locations, a failure to adequately anticipate the level of staffing or effort needed to efficiently and effectively communicate with and service our 2024 Form 10-K — SLM CORPORATION 34 customers or to service and collect on our loans, or another similar operational event could adversely affect our business, financial condition, results of operations, and/or cash flows.
Developing an effective hedging strategy for dealing with movements in interest rates is complex, and no strategy can completely avoid the risks associated with these fluctuations. For example, our education loan portfolios remain subject to prepayment risk that could cause them to be under- or over-hedged, which could result in material losses.
Developing an effective hedging strategy for dealing with movements in interest rates is complex, and no strategy can completely avoid the risks associated with these fluctuations. For example, our Private Education Loan portfolio remains subject to prepayment risk that could cause it to be under- or over-hedged, which could result in material losses.
“Business — Supervision and Regulation —Regulation of Sallie Mae Bank — Privacy Laws” for additional information. Further, we make public statements about our use, collection, disclosure, and other processing of personal information through our privacy policies, information provided on our website, and press statements.
“Business — Supervision and Regulation — Regulation of Sallie Mae Bank — Data Privacy and Data Security Laws and Regulations” for additional information. Further, we make public statements about our use, collection, disclosure, and other processing of personal information through our privacy policies, information provided on our website, and press statements.
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.
Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position. At December 31, 2024, approximately 74 percent of our total assets, and 88 percent of our total assets excluding cash and cash equivalents, were comprised of Private Education Loans.
The scope of regulation and the intensity of supervision will likely continue to become higher in the future, which could increase our costs and levels of charge-offs, require increased management attention, and adversely impact our results of operations.
The scope of regulation and the intensity of supervision may become higher in the future, which could increase our costs and levels of charge-offs, require increased management attention, and adversely impact our results of operations.
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.
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 3.68% at December 31, 2024.
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.
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, 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.
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. See also “—LIQUIDITY RISK” in this Item 1A.
As a result, our computer systems, software, and networks, as well as those of third-party vendors we utilize, may be vulnerable to unauthorized access, computer viruses, malware attacks, and other events that could have a security impact beyond our control.
As a result, our computer systems, software, and networks, as well as those of third-party vendors we utilize, may be vulnerable to unauthorized access, computer viruses, malware attacks, and other events that could have a security impact 2024 Form 10-K — SLM CORPORATION 35 beyond our control.
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.
Our bank competitors’ paid search activities, such as pay per click marketing, may result in their sites receiving higher search results than ours, thus leading to significant increases in the cost of such depositor acquisition for us.
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.
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, and the increasing amount of student loan debt outstanding in the United States have sustained this heightened and ongoing scrutiny.
While we have not been materially impacted by cyber incidents, we continue to evolve our security controls to improve our ability to prevent, detect, and respond to the continually changing threats, and we may be required to expend significant additional resources in the future to enhance our security controls in response to new or more sophisticated threats, as well as new regulations related to cybersecurity.
While we continue to evolve our security controls to improve our ability to prevent, detect, and respond to the continually changing threats, we may be required to expend significant additional resources in the future to enhance our security controls in response to new or more sophisticated threats, as well as new regulations related to cybersecurity.
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.
For instance, our new depositor acquisition marketing is partly dependent on search engines, as well as bank deposit information aggregators, to direct a significant 2024 Form 10-K — SLM CORPORATION 23 amount of traffic to our website via organic ranking and paid search advertising.
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.
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. 2024 Form 10-K — SLM CORPORATION 36 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.
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.
At December 31, 2024, our brokered deposits totaled $9.5 billion, which represented 45 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.
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.
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.
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.
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.
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.
Our brand is very important to us and our business. 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.
Our primary sources of liquidity and funding are customer deposits, payments received on Private Education Loans and FFELP Loans that we hold, and proceeds from loan sales and securitization transactions.
Our primary sources of liquidity and funding are customer deposits, 2024 Form 10-K — SLM CORPORATION 27 payments received on Private Education Loans that we hold, and proceeds from loan sales and securitization transactions.
Changes in the prevailing interpretations of federal or state laws and related regulations could also invalidate or call into question the legality of certain of our services and business practices.
Changes in the prevailing interpretations of federal or state laws, or the passage of new federal or state laws, and related regulations could also invalidate or call into question the legality of certain of our services and business practices. The impact of the Trump Administration’s policies is unclear.
Also, see “— 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 discontinuance of LIBOR could adversely affect our business and financial results.
See also “— CREDIT RISK — 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” in this Item 1A. The trailing effects of the discontinuance of LIBOR could adversely affect our business and financial results.
In certain interest rate environments, this mismatch may reduce our net interest margin (the interest yield earned on our portfolio less the rate paid on our interest-bearing liabilities) and net interest income.
The different interest rate and maturity characteristics of our loan portfolio and the liabilities funding the portfolio result in fluctuations in our net interest income. In certain interest rate environments, this mismatch may reduce our net interest margin (the interest yield earned on our portfolio less the rate paid on our interest-bearing liabilities) and net interest income.
If any of these financial institutions or participants were to become or be perceived 2023 Form 10-K — SLM CORPORATION 29 as unstable, or enter conservatorship, receivership, or bankruptcy, the consequences could have an adverse effect on our business, financial condition, and results of operations.
If any of these financial institutions or participants were to become or be perceived as unstable, or enter conservatorship, receivership, or bankruptcy, the consequences could have an adverse effect on our business, financial condition, and results of operations. 2024 Form 10-K — SLM CORPORATION 29 CAPITAL RISK The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI.
Increases in consolidation loans may result from competition as well as legislative or regulatory changes, as there has been, and there may be continue to be, an increase in the number of lenders offering consolidation or refinancing products as well as proposed legislation designed to promote federal financing for consolidation or refinancing of existing loans. 24 SLM CORPORATION — 2023 Form 10-K CREDIT RISK Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial condition, results of operations, and/or cash flows.
Increases in consolidation loans may result from competition, as there has been, and there may be continue to be, an increase in the number of lenders offering consolidation or refinancing products. 2024 Form 10-K — SLM CORPORATION 24 CREDIT RISK Defaults on our loans could adversely affect our business, financial condition, results of operations, and/or cash flows.
Compliance with laws and 32 SLM CORPORATION — 2023 Form 10-K regulations can be difficult and costly, and changes to laws and regulations, as well as increased intensity in compliance and supervision activities, often impose additional compliance costs and may constrain the marketing and origination of Private Education Loans or other products, adversely affect the collection of balances due on the loan assets held by us or by securitization trusts, adversely affect the execution of strategic initiatives, or otherwise adversely affect our business.
Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations, as well as increased intensity in compliance and supervision activities, often impose additional compliance costs and may constrain the marketing and origination of Private Education Loans or other products, adversely affect the collection of balances due on the loan assets held by us or by securitization trusts, adversely affect the execution of strategic initiatives, or otherwise adversely affect our business. 2024 Form 10-K — SLM CORPORATION 32 From time to time, we and our third-party service providers may use artificial intelligence, machine learning, data analytics, and similar tools to collect, aggregate, and analyze data in connection with our business.
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.
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.
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.
At December 31, 2024, 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.
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.
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 the FDIC’s regulations implementing the Basel III capital framework (“U.S.
We could still be exposed to risks associated with disputes and litigation with customers, counterparties, and other market participants in connection with implementing replacement rates for LIBOR.
Although we relied on those safe harbors in certain instances, the safe harbors were untested. We could still be exposed to risks associated with disputes and litigation with customers, counterparties, and other market participants in connection with implementing replacement rates for LIBOR.
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 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. We and our service providers face constant threats to our systems and data and continuously experience cyberattacks and other security incidents.
See Item 1. “Business — Supervision and Regulation — Regulation of Sallie Mae Bank — Regulatory Capital Requirements.” 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.
See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Regulatory Capital.” 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.
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.
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 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 in all possible scenarios, 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, which may negatively impact the level of our net interest income. • We are subject to repayment and prepayment risks, which 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 trailing effects of 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 share repurchase programs and other activities.
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.
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.
If we make 30 SLM CORPORATION — 2023 Form 10-K incorrect assumptions or estimates, we may under- or overstate reported financial results, which could materially and adversely affect our business, financial condition, results of operations, and/or capital levels.
If we make incorrect assumptions or estimates, we may under- or overstate reported financial results, which could materially and adversely affect our business, financial condition, results of operations, and/or capital levels. For additional information on the key areas for which assumptions and estimates are used in preparing our financial statements, 2024 Form 10-K — SLM CORPORATION 30 see Item 7.
(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.
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.
Although we currently do not anticipate liquidity constraints of the kind that caused certain other financial services institutions to fail or require external support, unanticipated deposit withdrawals due to market distress or otherwise or our inability to access other sources of liquidity, whether due to capital markets dislocations or otherwise, could result in constraints on our liquidity and adversely affect our business, financial condition, and results of operations.
Significant, unanticipated deposit withdrawals due to market distress or otherwise or our inability to access other sources of liquidity, whether due to capital markets dislocations or otherwise, could result in constraints on our liquidity and adversely affect our business, financial condition, and results of operations.
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. Defending against litigation or regulatory or supervisory actions may require significant attention and resources of management and, regardless of the outcome, such actions could result in significant expenses.
Defending against such litigation, or regulatory or supervisory actions, may require significant attention and resources of management and, regardless of the outcome, such actions could result in significant expenses.
Interest earned on our Private Education Loans and FFELP Loans is either fixed-rate or indexed to a short-term variable rate, and these loans are originated with relatively long repayment periods. ABS funding closely mirrors the expected maturities of our education loans and provides a combination of fixed and variable-rate funding.
Net interest income is the primary source of cash flow generated by our loan portfolio. Interest earned on our Private Education Loans is either fixed-rate or indexed to a short-term variable rate, and these loans are originated with relatively long repayment periods.
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.
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. 2024 Form 10-K — SLM CORPORATION 28 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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Our cybersecurity risk management program includes the following key elements: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise information technology (“IT”) environment; • a team comprised of IT security, IT infrastructure, and IT compliance personnel principally responsible for directing (i) our cybersecurity risk assessment processes, (ii) our security processes, and (iii) our response to cybersecurity incidents; • the use of external cybersecurity service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • cybersecurity awareness training of employees with access to our IT systems; • a cybersecurity incident response plan and Crisis Management Policy that guide our response to cybersecurity incidents; and • a third-party risk identification and management process for service providers.
Our cybersecurity risk management program includes the following key elements: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise information technology (“IT”) environment; • a team comprised of IT security, IT infrastructure, and IT compliance personnel principally responsible for directing (i) our cybersecurity risk assessment processes, (ii) our security processes, and (iii) our response to cybersecurity incidents; • the use of external cybersecurity service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • cybersecurity awareness training of employees with access to our IT systems; • a cybersecurity incident response standard and Crisis Management Policy that guide our response to cybersecurity incidents; and • a third-party risk identification and management process for service providers.
We use the Cyber Risk Institute Profile (which is based on the National Institute of Standards and Technology Cybersecurity Framework), the Federal Financial Institutions Examination Council Information Technology Examination Handbook and Cyber Assessment Tool, and the Payment Card Industry Data Security Standards as guides to help us identify, assess, and manage cybersecurity risks relevant to our business and develop and implement our cybersecurity risk management program.
We use the Cyber Risk Institute Profile (which is based on the National Institute of Standards and Technology Cybersecurity Framework), the Federal Financial Institutions Examination Council Information Technology Examination Handbook, and the Payment Card Industry Data Security Standards as guides to help us identify, assess, and manage cybersecurity risks relevant to our business and develop and implement our cybersecurity risk management program.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response standard.
We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See Part I, Item 1A.
We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, and/or financial condition. See Item 1A.
The Operational and Compliance Risk Committee of our Board of Directors also receives periodic reports from our CSO on our cybersecurity risks, including briefings on our cyber risk management program and cybersecurity incidents. 40 SLM CORPORATION — 2023 Form 10-K Our CSO supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public, or private sources, including external cybersecurity service providers; and alerts and reports produced by security tools deployed in the IT environment.
Our CSO supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which include: briefings from internal security personnel; threat intelligence and other 2024 Form 10-K — SLM CORPORATION 40 information obtained from governmental, public, or private sources, including external cybersecurity service providers; and alerts and reports produced by security tools deployed in the IT environment.
Removed
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Added
The Operational and Compliance Risk Committee of our Board of Directors also receives periodic reports from our CSO on our cybersecurity risks, including briefings on our cyber risk management program and cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Properties 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.
Properties The following table lists the principal facility owned by us as of December 31, 2024: Location Function Approximate Square Feet Newark, DE Headquarters 160,000 The following table lists the principal facilities leased by us as of December 31, 2024: 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 Our headquarters is currently located in owned space, unencumbered by a mortgage, at 300 Continental Drive, Newark, Delaware, 19713. 2024 Form 10-K — SLM CORPORATION 41
Removed
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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Removed
Item 3. Legal Proceedings We and our subsidiaries and affiliates are subject to various claims, lawsuits, and other actions that arise in the normal course of business. It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies.
Added
Item 3. Legal Proceedings The information required by this Item is set forth in the “Commitments, Contingencies, and Guarantees” discussion in Note 18 of the accompanying Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K, which discussion is included in Item 8 of this Report, and is incorporated herein by reference in response to this Item.
Removed
These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.
Added
Item 4. Mine Safety Disclosures N/A PART II.
Removed
Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities related to the conduct of the pre-Spin-Off consumer banking business that were specifically assumed by the Bank (and as to which the Bank is obligated to indemnify Navient).
Removed
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.
Removed
Navient has informed the Bank, however, that it believes the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the above-described lawsuits under the Separation and Distribution Agreement and/or a separate loan servicing agreement between the parties, and has suggested that the parties defer further discussion regarding indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits.
Removed
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.
Removed
To 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.
Removed
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.
Removed
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.
Removed
The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
Under the above share repurchase programs, repurchases could 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.
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.
We paid quarterly cash dividends on our common stock of $0.11 per share for the first, second, and third quarters of 2024, respectively, and $0.13 per share for the fourth quarter of 2024. We paid quarterly cash dividends on our common stock of $0.11 per share for each quarter of 2023 and 2022.
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.
The timing and volume of any repurchases are 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.
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.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our common stock is listed and trades on the NASDAQ Global Select Market (“Nasdaq”) under the symbol SLM. As of January 31, 2025, there were 210,423,462 shares of our common stock outstanding and approximately 239 holders of record.
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.
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that could be repurchased under the 2021 Share Repurchase Program, resulting in a total authorization of $1.5 billion of common stock.
(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.
(Dollars 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, 2024 (2) Period: October 1 - October 31, 2024 1,582,502 $ 22.90 1,569,378 $412,000 November 1 - November 30, 2024 433,180 $ 23.58 431,330 $402,000 December 1 - December 31, 2024 8,590 $ 27.13 — $402,000 Total fourth-quarter 2024 2,024,272 $ 23.07 2,000,708 (1) The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) 23,564 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.
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.
See Notes to Consolidated Financial Statements, Note 12, “Stockholders’ Equity” in this Form 10-K for further discussion. 2024 Form 10-K — SLM CORPORATION 42 The closing price of our common stock on Nasdaq on December 31, 2024 was $27.58. In January 2020, we announced a share repurchase program of up to $600 million of common stock.
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.
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, 2024.
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
Five-Year Cumulative Total Stockholder Return Company/Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 SLM Corporation $100.0 $140.9 $226.1 $195.7 $232.2 $342.0 S&P Supercomposite Consumer Finance Sub-Industry Index 100.0 100.8 137.7 110.9 142.5 215.2 S&P 400 Regional Bank Sub-Industry Index 100.0 91.4 129.5 124.1 123.0 143.9 Source: FactSet data and analytics 2024 Form 10-K — SLM CORPORATION 43
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.
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. This graph assumes $100 was invested in the stock or the relevant index on December 31, 2019, and also assumes the reinvestment of dividends through December 31, 2024.
On January 27, 2021, we announced the 2021 Share Repurchase Program, which was effective upon announcement and expired on January 26, 2023, and originally 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 program expired in January 2022. In January 2021, we announced an additional share repurchase program of up to $1.25 billion of common stock (the “2021 Share Repurchase Program”) that expired in January 2023.
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.
(2) As of December 31, 2024, we had $402 million of capacity remaining under the 2024 Share Repurchase Program. The 2024 Share Repurchase Program was announced on January 24, 2024, with an effective date of January 26, 2024, and expires on February 6, 2026.
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.
In January 2022, we announced a share repurchase program of up to $1.25 billion of common stock that expired in January 2024. In January 2024, we announced a new share repurchase program of up to $650 million of common stock (the “2024 Share Repurchase Program”). The program expires in February 2026.
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.
We had $402 million of capacity remaining under the 2024 Share Repurchase Program as of December 31, 2024.
Removed
(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.
Added
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. See Item 1A. “Risk Factors — GENERAL RISKS” for possible limitations on the payments of our dividends.
Removed
The 2019 Share Repurchase Program expired on January 22, 2021 and permitted us to repurchase from time to time shares of our common stock up to an aggregate repurchase price not to exceed $200 million.
Added
The information contained in the definitive proxy statement on Schedule 14A for our 2025 annual meeting of shareholders (the “2025 Proxy Statement”), including information appearing in the section titled “Equity Plan Compensation Information”, is incorporated herein by reference.
Removed
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.
Added
See Notes to Consolidated Financial Statements, Note 12, “Stockholders’ Equity” in this Form 10-K for further discussion. (3) In the fourth quarter of 2024, we repurchased 2.0 million common shares under our 10b5-1 trading plans.
Removed
The 2020 Share Repurchase Program expired on January 21, 2022 and permitted us to repurchase shares of common stock from time to time up to an aggregate repurchase price not to exceed $600 million.
Removed
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an 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.
Removed
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.
Removed
The 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.
Removed
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.
Removed
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.
Removed
Of the total $1.5 billion 2021 Share Repurchase Program authorization, we repurchased 81.1 million shares of common stock at an average price per share of $18.07, for $1.46 billion in the year ended December 31, 2021.
Removed
(Those amounts include the shares repurchased under the Tender Offer described below.) We also repurchased 2.0 million shares of common stock under the 2021 Share Repurchase Program for $38 million in the three months ended March 31, 2022. We have utilized all capacity under the 2021 Share Repurchase Program.
Removed
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.
Removed
Common Stock Tender Offer On February 2, 2021, under the auspices of the 2021 Share Repurchase Program, we announced the commencement of the Tender Offer to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share.
Removed
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.
Removed
This cancellation decreased the balances of common stock by $6 million and of additional paid-in capital by $466 million, respectively.
Removed
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.
Removed
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.

Item 7. Management's Discussion & Analysis

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

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During 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $205 million in negative provisions recorded as a result of the approximately $3.15 billion in Private Education Loan sales during 2023 and an increase in recovery rates (as a result of the change in our defaulted loan recovery process).
During 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $205 million in negative provisions recorded as a result of the approximately $3.15 billion in Private Education Loan sales during 2023 and an increase in recovery rates (as the result of a change in our defaulted loan recovery process).
If actual future performance in delinquency, charge-offs, and recoveries is significantly different than estimated, or management assumptions or practices were to change, this could materially affect the estimate of the allowance for credit losses, the timing of when losses are recognized, and the related provision for credit losses on our consolidated statements of income.
If actual future performance in delinquency, charge-offs, and recoveries is significantly different than estimated, or management assumptions or practices were to change, this could materially affect the estimate of the allowance for credit losses, the timing of when losses are recognized, and the related provision for credit losses in our consolidated statements of income.
Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets.
We can pledge asset-backed and mortgage-backed securities, as well as Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets.
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.
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. • Compensation Committee .
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 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 2025. As of December 31, 2024, 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.
Board of Directors Committee Structure We have a robust Board of Directors committee structure as outlined below that facilitates oversight, effective challenge, and escalation of risk and control issues . • Financial Risk Committee.
Board of Directors Committee Structure We have a Board of Directors committee structure as outlined below that facilitates oversight, effective challenge, and escalation of risk and control issues . • Financial Risk Committee.
(3) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(2) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
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.
Interest-bearing deposits as of December 31, 2024 and 2023 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.
In the year-ago period, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to $3.34 billion in Private Education Loans sold in 2022 and the adoption of a new loss model that included a reduction in the long-term estimate of losses after the reasonable and supportable period.
In 2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to approximately $3.34 billion in Private Education Loans sold in 2022 and the adoption of a new loss model that included a reduction in the long-term estimate of losses after the reasonable and supportable period.
Management overlays increased in 2022 due to several factors, including additional provisions for our expectation of higher future loan losses related to the previously announced credit administration practices changes we implemented in 2021, “gap year” loans, a shortage and lack of tenured collections staff, and other operational challenges we experienced in 2022. • Gains on sales of loans, net, were $160 million in 2023, compared with $328 million in the year-ago period.
Management overlays increased in 2022 due to several factors, including additional provisions for our expectation of higher future loan losses related to the previously announced credit administration practices changes we implemented in 2021, “gap year” loans, a shortage and lack of tenured collections staff, and other operational challenges we experienced in 2022. • Gains on sales of loans, net, were $160 million in 2023, compared with $328 million in 2022.
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.
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, 2024 and 2023.
Of the model inputs outlined above, economic forecasts, weighting of economic forecasts, prepayments speeds, and recovery rates are subject to estimation uncertainty, and changes in these inputs could have a material impact to our allowance for credit losses and the related provision for credit losses.
Of the model inputs outlined above, economic forecasts, weighting of economic forecasts, and recovery rates are subject to estimation uncertainty, and changes in these inputs could have a material impact to our allowance for credit losses and the related provision for credit losses.
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.
Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk category. The management-level Enterprise Risk Committee provides oversight of the risk appetite standard with escalation to the Board of Directors, as appropriate.
We obtain forecasts for these inputs from Moody’s Analytics. Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurrence. We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs.
Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurrence. We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs.
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.
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. 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.
The increase in other income compared with the year-ago period was primarily the result of a $13 million increase in third-party servicing fees from the year-ago period and a $2 million increase in Private Education Loan late fees compared with the year-ago period. • For the year ended December 31, 2023, total operating expenses were $619 million, compared with $551 million in the year-ago period.
The increase in other income compared with 2022 was primarily the result of a $13 million increase in third-party servicing fees from 2022 and a $2 million increase in Private Education Loan late fees compared with 2022. • For the year ended December 31, 2023, total operating expenses were $619 million, compared with $551 million in 2022.
Fees paid to third-party brokers related to brokered CDs were $8 million, $13 million, and $13 million during the years ended December 31, 2023, 2022, and 2021, respectively.
Fees paid to third-party brokers related to brokered CDs were $8 million, $8 million, and $13 million during the years ended December 31, 2024, 2023, and 2022, respectively.
The increase in total operating expenses was primarily driven by higher personnel costs, initiative spending, and higher FDIC assessment fees, which were partially offset by lower Credit Card portfolio expenses as a result of the sale of the portfolio. • In 2023, we recorded $66 million in impairment and amortization of acquired intangible assets, compared with $8 million in the year-ago period.
The increase in total operating expenses was primarily driven by higher personnel costs, initiative spending, and higher FDIC assessment fees, which were partially offset by lower Credit Card portfolio expenses as a result of the sale of the portfolio. • In 2023, we recorded $66 million in impairment and amortization of acquired intangible assets, compared with $8 million in 2022.
During 2023, our estimates of future prepayment speeds reflect the current interest rate environment and future expectations of increased prepayment speeds in line with market expectations of a decline in interest rates based on the scenarios produced by Moody's Analytics described above.
During 2023, our estimates of future prepayment speeds reflected the then current interest rate environment and future expectations of increased prepayment speeds in line with market expectations of a decline in interest rates based on the scenarios produced by Moody's Analytics described above.
The balance of loans held for investment in full principal and interest repayment status was affected in 2023 and 2022 by loan sales.
The balance of loans held for investment in full principal and interest repayment status was affected in 2024 and 2023 by loan sales.
In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel III regulatory capital requirements.
In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel Ill regulatory capital requirements.
The Secured Borrowing Facility’s contractual maturity is two years from the date of inception or renewal (one-year revolving period plus a one-year amortization period); however, we classify advances under our Secured Borrowing Facility as short-term borrowings because it is our intention to repay those advances within one year.
The one-year revolving period plus the one-year amortization period results in a contractual maturity that is two years from the date of inception or renewal; however, we classify advances under our Secured Borrowing Facility as short-term borrowings because it is our intention to repay those advances within one year.
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.
At December 31, 2024 and 2023, 26 percent and 25 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.
As such, we wrote down the value by $60 million in 2022 based upon an estimate of the value of these securities. • Other income was $84 million in 2023, compared with $67 million in the year-ago period.
As such, we wrote down the value by $60 million in 2022 based upon an estimate of the value of these securities. • Other income was $84 million in 2023, compared with $67 million in 2022.
Consequently, this category can be significantly affected by the volume of loans in repayment. 2023 Form 10-K — SLM CORPORATION 61 Private Education Loan Originations The following table summarizes our Private Education Loan originations. Originations represent loans that were funded or acquired during the period presented.
Consequently, this category can be significantly affected by the volume of loans in repayment. 2024 Form 10-K — SLM CORPORATION 57 Private Education Loan Originations The following table summarizes our Private Education Loan originations. Originations represent loans that were funded or acquired during the period presented.
The decrease in gains on sales of loans was primarily the result of selling approximately $3.15 billion of Private Education Loans in 2023, compared with the sale of approximately $3.34 billion of Private Education Loans in the year-ago period, and lower sales premiums received in 2023 compared to the year-ago period, which were attributable to higher interest rates in 2023.
The decrease in gains on sales of loans was primarily the result of selling approximately $3.15 billion of Private Education Loans in 2023, compared with the sale of approximately $3.34 billion of Private Education Loans in 2022, and lower sales premiums received in 2023 compared to 2022, which were attributable to higher interest rates in 2023.
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 2023 increased by $73 million compared with the year-ago period primarily due to a $375 million increase in average Private Education Loans and FFELP Loans outstanding and a 19-basis point increase in our net interest margin.
The primary contributors to each of the identified drivers of change in net income for 2023 compared with 2022 are as follows: • Net interest income in 2023 increased by $73 million compared with 2022 primarily due to a $375 million increase in average Private Education Loans and FFELP Loans outstanding and a 19-basis point increase in our net interest margin.
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.
Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $11 million, $12 million, and $13 million in the years ended December 31, 2024, 2023, and 2022, respectively.
At December 31, 2023 and December 31, 2022, our sources of liquidity included liquid investments with unrealized losses of $128.9 million and $184.5 million, respectively. It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire emergency conditions.
At December 31, 2024 and December 31, 2023, our sources of liquidity included liquid investments with unrealized losses of $105.8 million and $128.9 million, respectively. It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire emergency conditions.
We will continue to sell a segment of defaulted loans immediately after charge-off but will no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead will continue our collection efforts using in-house collectors and third-party collectors.
Previously, we used a mix of in-house collectors and sales to third parties. We continue to sell a segment of defaulted loans immediately after charge-off but no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead continue our collection efforts using in-house collectors and third-party collectors.
We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023. • Gains (losses) on securities, net, were $3 million in gains in 2023, compared with a net loss of $60 million in the year-ago period.
We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023. • Gains (losses) on securities, net, were $3 million in gains in 2023, compared with a net loss of $60 million in 2022.
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.
At December 31, 2024, 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 1.9 percent.
“Loan consolidations to third parties” for the year ended December 31, 2023 total 11.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at December 31, 2023, or 4.9 percent of our total Private Education Loans held for investment portfolio at December 31, 2023, compared with the year-ago period of 16.2 percent of our Private Education Loan held for investment portfolio in full principal and interest repayment status, or 7.3 percent of our total Private Education Loans held for investment portfolio, respectively.
“Loan consolidations to third parties” for the year ended December 31, 2024 total 9.1 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at December 31, 2024, or 3.9 percent of our total Private Education Loans held for investment portfolio at December 31, 2024, compared with the year-ago period of 11.5 percent of our Private Education Loan held for investment portfolio in full principal and interest repayment status, or 4.9 percent of our total Private Education Loans held for investment portfolio, respectively.
Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.
The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.
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.
See Item 1. “Business - Our Business - Private Education Loans” for a further discussion. (2) For the year ended December 31, 2024, the Graduate Loan originations include $32.2 million of Smart Option Loans where the student was in a graduate status.
Private Education Loans held for investment in full principal and interest repayment status were 43 percent of our total Private Education Loans held for investment portfolio at December 31, 2023, compared with 45 percent at December 31, 2022.
Private Education Loans held for investment in full principal and interest repayment status were 42 percent of our total Private Education Loans held for investment portfolio at December 31, 2024, compared with 43 percent at December 31, 2023.
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.
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 “— Critical Accounting Policies and Estimates — Allowance for Credit Losses” in this Item 7 and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools — Private Education Loans” in this Form 10-K. 2024 Form 10-K — SLM CORPORATION 61 The table below presents our Private Education Loans held for investment portfolio delinquency trends.
Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in February 2023. (2) In May 2022, we discontinued offering our Career Training loan product. Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in September 2023.
In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in February 2023. In May 2022, we discontinued offering our Career Training loan product.
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.
As of December 31, 2024 (dollars in thousands) SLM Corporation and Sallie Mae Bank Contracts Total exposure, net of collateral $ 4,839 Exposure to counterparties with credit ratings, net of collateral $ 4,839 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 — % 2024 Form 10-K — SLM CORPORATION 71 Regulatory Capital The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities.
Private Education Loans Accrued Interest Receivable (dollars in thousands) Total Interest Receivable 90 Days or Greater Past Due Allowance for Uncollectible Interest (1) December 31, 2023 $ 1,354,565 $ 8,373 $ 9,897 December 31, 2022 $ 1,177,562 $ 6,609 $ 8,121 December 31, 2021 $ 1,187,123 $ 3,635 $ 4,937 December 31, 2020 $ 1,168,895 $ 4,354 $ 4,467 December 31, 2019 $ 1,366,158 $ 2,390 $ 5,309 (1) The allowance for uncollectible interest at December 31, 2023, 2022, 2021, and 2020 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2023, 2022, 2021, and 2020, relates to $151 million, $240 million, $240 million, and $196 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized.
Private Education Loans Accrued Interest Receivable (Dollars in thousands) Total Interest Receivable 90 Days or Greater Past Due Allowance for Uncollectible Interest (1) December 31, 2024 $ 1,549,415 $ 6,420 $ 12,366 December 31, 2023 $ 1,354,565 $ 8,373 $ 9,897 December 31, 2022 $ 1,177,562 $ 6,609 $ 8,121 December 31, 2021 $ 1,187,123 $ 3,635 $ 4,937 December 31, 2020 $ 1,168,895 $ 4,354 $ 4,467 (1) The allowance for uncollectible interest at December 31, 2024, 2023, 2022, 2021, and 2020 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2024, 2023, 2022, 2021, and 2020, relates to $164 million, $151 million, $240 million, $240 million, and $196 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized.
This write-down occurred because we plan to discontinue the use of the Nitro trade name and trademarks in 2024 and transition the related branding to the Sallie and Sallie Mae brands and platforms. In 2023, we recorded $10 million in amortization expense of acquired intangible assets, compared to $8 million in the year-ago period.
This write-down occurred because we planned to discontinue the use of the Nitro trade name and trademarks in 2024 and transition the related branding to the Sallie and Sallie Mae brands and platforms. In 2023, we recorded $10 million in amortization expense of acquired intangible assets, compared to $8 million in 2022.
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 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.
See also Part I, Item 1A. “Risk Factors — General Risks” for possible limitations on the payments of our dividends. Borrowings Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program and our Secured Borrowing Facility. The issuing entities for those secured borrowings are variable interest entities and are consolidated for accounting purposes.
“Risk Factors — GENERAL RISKS” for possible limitations on the payments of our dividends. Borrowings Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program and our Secured Borrowing Facility. The issuing entities for those secured borrowings are variable interest entities and are consolidated for accounting purposes.
The following table summarizes our secured borrowings at December 31, 2023 and 2022.
The following table summarizes our secured borrowings at December 31, 2024 and 2023.
The 84 SLM CORPORATION — 2023 Form 10-K existence of a cosigner lowers the likelihood of default as well. We monitor and update these credit quality indicators in the analysis of the adequacy of our allowance for credit losses on a quarterly basis. In the second quarter of 2023, we changed how we collect on defaulted loans.
The existence of a cosigner lowers the likelihood of default as well. We monitor and update these credit quality indicators in the analysis of the adequacy of our allowance for credit losses on a quarterly basis. In the second quarter of 2023, we changed how we collect on defaulted loans.
For additional information, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment.” 2023 Form 10-K — SLM CORPORATION 47 Allowance for Credit Losses Management estimates and maintains an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well as for future loan commitments, at the reporting date.
For additional information, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment.” Allowance for Credit Losses Management estimates and maintains an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well as for future loan commitments, at the reporting date.
Compliance risk metrics and regular reporting on compliance programs are provided to the Operational and Compliance Risk Committee of the Board of Directors. 90 SLM CORPORATION — 2023 Form 10-K
Compliance risk metrics and regular reporting on compliance programs are provided to the Operational and Compliance Risk Committee of the Board of Directors. 2024 Form 10-K — SLM CORPORATION 85
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of December 31, 2023 was $(40) million and $(4) million for the CME and LCH, respectively.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of December 31, 2024 was $(22) million and $(1) million for the CME and LCH, respectively.
See “ — Critical Accounting Policies and Estimates — Allowance for Credit Losses.” Allowances for credit losses are an important indicator of management’s perspective on the future performance of a loan portfolio.
See “ — Critical Accounting Policies and Estimates — Allowance for Credit Losses” in this Item 7. Allowances for credit losses are an important indicator of management’s perspective on the future performance of a loan portfolio.
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.
The estimated impacts were calculated for the two-year reasonable and supportable periods, 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 the long-term rate.
At each reporting date, we determine the appropriate weighting of these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes. This weighting of expectations is used in calculating our current expected credit losses recorded each period.
At each reporting date, we determine the appropriate weighting of these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes. This weighting of expectations is used in calculating our current expected credit losses recorded each period. We obtain forecasts for these inputs from Moody’s Analytics.
Net Interest Income Most of our earnings are generated from the interest income earned on assets in our education loan portfolios, net of the interest expense we pay on the funding for those loans. We report these earnings as net interest income.
Net Interest Income and Net Interest Margin Most of our earnings are generated from the interest income earned on assets in our education loan portfolios, net of the interest expense we pay on the funding for those loans. We report these earnings as net interest income. The majority of our interest income comes from our Private Education Loan portfolio.
At December 31, 2023, $4.02 billion of our Private Education Loans, including $3.90 billion of principal and $128 million in capitalized interest, were encumbered as a result of these transactions. Other Borrowing Sources We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at December 31, 2023.
At December 31, 2024, $3.74 billion of our Private Education Loans, including $3.63 billion of principal and $107 million in capitalized interest, were encumbered as a result of these transactions. Other Borrowing Sources We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at December 31, 2024.
As such, as rates increased in 2023, we saw our net interest margin increase. • Provision for credit losses in 2023 was $345 million, compared with $633 million in the year-ago period.
As such, as rates increased in 2023, we saw our net interest margin increase. • Provision for credit losses in 2023 was $345 million, compared with $633 million in 2022.
For further discussion, see “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool .” (2) At December 31, 2020, the loans in the “grace, repayment and other” category include (a) $147 million of Private Education Loans whose borrowers were in a grace or deferred status and who did not return to school in the fall of 2020, who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments, and (b) $639 million of Private Education Loans whose borrowers were in a forbearance or repayment status and who did not return to school in the fall of 2020 and who then received an extension of time from us to re-enroll before beginning their grace period.
(2) At December 31, 2020, the loans in the “grace, repayment and other” category include (a) $147 million of Private Education Loans whose borrowers were in a grace or deferred status and who did not return to school in the fall of 2020, who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments, and (b) $639 million of Private Education Loans whose borrowers were in a forbearance or repayment status and who did not return to school in the fall of 2020 and who then received an extension of time from us to re-enroll before beginning their grace period.
Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses). Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero.
Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses). Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.
At December 31, 2023, 220 million shares were issued and outstanding and 36 million shares were unissued but encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend equivalent units for employee compensation and remaining authority for stock-based compensation plans.
At December 31, 2024, 210 million shares were issued and outstanding and 33 million shares were unissued but encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend equivalent units for employee compensation and remaining authority for stock-based compensation plans.
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 .
Additionally, the Compensation Committee provides oversight of human capital management. • 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 year-over-year decrease was primarily attributable to higher provisions for credit losses, decreases in gains on sales of loans, net, and other income, and higher operating expenses, which were offset by an increase in total net interest income.
The year-over-year increase was primarily attributable to an increase in gains on sales of loans, net and other income and a decrease in total non-interest expense, which were offset by a decrease in total net interest income and an increase in provisions for credit losses.
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.
At December 31, 2024, December 31, 2023, and December 31, 2022, we used the Baseline (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario - 10 percent likelihood of occurring)/S3 (unfavorable (or downside) scenario - 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively.
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 The Bank’s required and actual regulatory capital amounts and ratios under U.S.
At December 31, 2024, 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 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, 2024 December 31, 2024 Retained earnings $ 836,351 $ (209,088) $ (209,088) $ (209,088) $ 209,087 Allowance for credit losses 1,038,145 (259,536) (259,536) (259,536) 259,537 Liability for unfunded commitments 104,377 (26,094) (26,094) (26,095) 26,094 Deferred tax asset 306,171 (76,542) (76,542) (76,543) 76,544 The Bank’s required and actual regulatory capital amounts and ratios, including applicable capital conservation buffers, under U.S.
The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.
The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms. Some of our deposit products are serviced by third-party providers.
The Operational and Compliance Risk Committee, along with the Financial Risk Committee, provides oversight of the development, maintenance, and monitoring of our risk management framework, risk governance structure, and risk appetite statements, metrics, and associated limits and thresholds, and the promotion of our risk management culture.
The Operational and Compliance Risk Committee, along with the Financial Risk Committee, provides oversight of the development, maintenance, and monitoring of our risk management framework, risk governance structure, and risk appetite statements, metrics, and associated limits and thresholds, and the promotion of our risk 2024 Form 10-K — SLM CORPORATION 82 management culture.
When calculating our allowance for credit losses and liability for unfunded commitments, we incorporate several inputs that are subject to change period to period. These include, but are not limited to, CECL model inputs and any overlays deemed necessary by management.
When calculating our allowance for credit losses and liability for unfunded commitments, we incorporate several inputs that are subject to change period to period. These include, but are not limited to, CECL model inputs and any overlays deemed necessary by management. The most impactful CECL model inputs include: • Economic forecasts; • Weighting of economic forecasts; and • Recovery rates.
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.
Accrued interest on deposits was $92 million and $91 million at December 31, 2024 and 2023, respectively. 2024 Form 10-K — SLM CORPORATION 70 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.
As discussed above, we will continue to monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback.
We continually monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback.
This method requires us to project future principal and interest cash flows on our loans in those portfolios. To estimate the future expected cash flows, we use a vintage-based model that considers life of loan loss expectations, prepayments, defaults, recoveries, and any other adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date.
This method requires us to project future principal and interest cash flows on our loans in those portfolios. To estimate the future expected cash flows, we use statistical loan-level models that consider life of loan expectations for defaults, prepayments, recoveries, and any other qualitative adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.6 billion and $8.0 billion of our deposit total as of December 31, 2023 and December 31, 2022, respectively.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.0 billion of our deposit total as of December 31, 2024, compared with $7.6 billion at December 31, 2023.
Forbearance does not grant any reduction in the total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is capitalized (added to principal) at the end of the forbearance. Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however.
While a loan is in forbearance status, interest continues to accrue and is capitalized (added to principal) at the end of the forbearance. Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however.
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.
Once the quantitative calculation was performed, we reviewed the adequacy of the allowance for credit losses and determined if qualitative adjustments needed to be considered. 2024 Form 10-K — SLM CORPORATION 81 Risk Management Our Approach Risk is inherent in our business activities and the specialized lending industry we serve.
The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest.
Accrued Interest Receivable The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest.
This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
This 2024 Form 10-K — SLM CORPORATION 72 transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
Finally, the Internal Audit function comprises the “third line of defense.” The Internal Audit function provides opinions to the Board of Directors on the effectiveness of the first and second lines of defense, as reflected in audit reports.
The second line of defense conducts oversight and effective challenge of the risk-taking activities within the first line of defense. Finally, the Internal Audit function comprises the “third line of defense.” The Internal Audit function provides opinions to the Board of Directors on the effectiveness of the first and second lines of defense, as reflected in audit reports.
We target maintaining sufficient on-balance sheet and contingent sources of liquidity to enable us to meet all contractual and contingent obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test the resiliency of our balance sheet.
We target maintaining sufficient on-balance sheet and contingent sources of liquidity to enable us to meet all contractual and contingent obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test the resiliency of our balance sheet. We hold a significant liquidity buffer of cash and securities, which we expect to maintain through 2025.
The increase in delinquencies in 2023 compared with 2022 was primarily attributable to new loan modification programs initiated in the fourth quarter of 2023 that require borrowers to remain in their respective delinquency buckets until three consecutive payments are made under the modified loan terms before being brought current.
The increase in delinquencies at December 31, 2023, compared with 2022, was primarily attributable to loan modification programs initiated in the fourth quarter of 2023 that required borrowers to remain in their respective delinquency buckets until three consecutive payments were made under the modified loan terms before being brought current (if re-age eligible).
Our net interest margin increased in the current period from the year-ago period because of the dramatic increase in interest rates over the past year. When interest rates rise, the yield on our interest-earning assets typically increases faster than our cost of funds.
Our net interest margin increased in 2023 from 2022 because of the dramatic increase in interest rates in 2023. When interest rates rise, the yield on our interest-earning assets typically increases faster than our cost of funds.
As of December 31, (dollars in thousands) 2023 2022 Deposits - interest bearing $ 21,651,657 $ 21,446,647 Deposits - non-interest bearing 1,531 1,424 Total deposits $ 21,653,188 $ 21,448,071 Our total deposits of $21.7 billion were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and other deposits at December 31, 2023, compared with total deposits of $21.4 billion, which were comprised of $9.9 billion in brokered deposits and $11.5 billion in retail and other deposits, at December 31, 2022.
As of December 31, (dollars in thousands) 2024 2023 Deposits - interest-bearing $ 21,066,752 $ 21,651,657 Deposits - non-interest-bearing 1,816 1,531 Total deposits $ 21,068,568 $ 21,653,188 Our total deposits of $21.1 billion were comprised of $9.5 billion in brokered deposits and $11.6 billion in retail and other deposits at December 31, 2024, compared with total deposits of $21.7 billion, which were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and other deposits, at December 31, 2023.
Servicing expenses primarily include compensation and benefit expenses related to our collections, customer support, and payment processing employees, and technology costs and other expenses associated with facilitating and servicing borrowers. Costs to service can vary period to period based upon seasonality and borrower payment status.
The cost to acquire is affected by such variables as technology, personnel, and marketing costs. Servicing expenses primarily include compensation and benefit expenses related to our collections, customer support, and payment processing employees, and technology costs and other expenses associated with facilitating and servicing borrowers. Costs to service can vary period to period based upon seasonality and borrower payment status.
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.
We have liquidity exposure related to collateral movements between us and our derivative counterparties. 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

15 edited+0 added−1 removed11 unchanged
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.
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, the Non-Discrete Reset, and the daily, weekly, and monthly SOFR, and 3-month SOFR categories are generally quite highly correlated, and should offset each other effectively.
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.
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, 2024 and 2023, 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, 2023.
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, 2024.
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.
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. 2024 Form 10-K — SLM CORPORATION 87 Weighted Average Life The following table reflects the weighted average lives of our earning assets and liabilities at December 31, 2024.
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.
As of December 31, 2024 2023 +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 -8.1 % -2.5 % +2.0 % +5.9 % -2.9 % -0.9 % +0.7 % +1.9 % EAR - Ramp -4.5 % -1.4 % +1.2 % +3.4 % -1.9 % -0.6 % +0.4 % +1.3 % EVE -24.2 % -7.9 % +7.0 % +20.9 % -26.0 % -8.9 % +8.8 % +25.9 % 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.
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.
Rate shocks represent an immediate and sustained change in key rates, 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.
They also do not account for other business developments that could affect net income, or for management actions that could affect net income or could be taken to change our risk profile. Accordingly, we can give no assurance that actual results would not differ materially from the estimated outcomes of our simulations.
They also do not 2024 Form 10-K — SLM CORPORATION 86 account for other business developments that could affect net income, or for management actions that could affect net income or could be taken to change our risk profile. Accordingly, we can give no assurance that actual results would not differ materially from the estimated outcomes of our simulations.
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.
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 30-day average SOFR.
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.
The funding in the fixed-rate bucket includes $1.9 billion and $0.4 billion of non-interest-bearing liabilities. We consider the overall repricing risk to be low. We use interest rate swaps and other derivatives to achieve our risk management objectives.
(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.
(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, 2024 (dollars in millions) Index Frequency of Variable Resets Assets Funding (1) Funding Gap Fed Funds Effective Rate daily/weekly/monthly $ — $ 547.9 $ (547.9) SOFR Rate daily/weekly/monthly 5,323.2 4,816.6 506.6 3-month SOFR quarterly — 251.1 (251.1) 3-month Treasury bill weekly — — — Prime monthly 0.3 — 0.3 Non-Discrete reset (2) daily/weekly 4,927.5 3,606.4 1,321.1 Fixed-Rate (3) 19,821.1 20,850.1 (1,029.0) Total $ 30,072.1 $ 30,072.1 $ — (1) Funding (by index) includes all derivatives that qualify as effective hedges.
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
As of December 31, 2024 (averages in years) Weighted Average Life Earning assets Education loans 5.57 Cash and investments 1.28 Total earning assets 4.55 Deposits Short-term deposits 0.60 Long-term deposits 2.47 Total deposits 0.90 Borrowings Long-term borrowings 3.60 Total borrowings 3.60 2024 Form 10-K — SLM CORPORATION 88
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.
Planned loan sales, which are not included in the static EVE modeling, significantly reduce our EVE exposure. Management is evaluating this trend to determine if, and when, further actions are necessary to manage EVE sensitivity.
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.
The EAR results for December 31, 2024 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. The higher mix of fixed-rate versus variable-rate loan disbursements continues, which results in our liabilities repricing more quickly than our assets over time.
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.
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.
In 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.
Therefore, 30-day average SOFR is considered a core rate in our interest rate risk analysis. The 30-day average SOFR and other rates are shocked in parallel for shock scenarios unless otherwise indicated. Rates are adjusted up or down via a set of scenarios that includes both rate shocks and ramps.
Removed
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.

Other SLM 10-K year-over-year comparisons