Allowance for Credit Losses and Unfunded Loan Commitments

6 Months Ended

Jun. 30, 2026

Allowance for Credit Losses and Unfunded Loan Commitments

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

When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. The allowance is recorded in “Other Liabilities” on the consolidated balance sheet. When the loan is funded, we transfer that liability to the allowance for loan losses.

The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accrued on the loan in that month. The allowance for credit losses considers the collectability of both principal and accrued interest. The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses. See “— Accrued Interest Receivable” in this Note 5 for further discussion.

See Note 2, “Significant Accounting Policies — Allowance for Credit Losses” in our 2025 Form 10-K for a more detailed discussion on our allowance for credit losses accounting policies.

Allowance for Credit Losses Metrics

The following tables provide a summary of the activity in the allowance for loan losses and the allowance for unfunded loan commitments during the three and six months ended June 30, 2026 and 2025.


Three Months Ended June 30, 2026 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,383,166
Transfer from allowance for unfunded loan commitments	28,209
Provisions:
Provision for current period	68,330
Loan sale reduction to provision	(10,826)
Loans transferred to held for sale	(2,311)
Total provisions(1)	55,193
Net charge-offs:
Charge-offs	(122,216)
Recoveries	9,662
Net charge-offs	(112,554)


Allowance for loan losses, ending balance	$	1,354,014
Allowance for unfunded loan commitments, beginning balance(2)	23,754
Provision(1)(3)	70,470
Transfer to allowance for loan losses	(28,209)
Allowance for unfunded loan commitments, ending balance(2)	66,015
Total allowance for credit losses, ending balance	$	1,420,029








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	2.95		%
Allowance for loan losses coverage of net charge-offs (annualized)	3.01
Total Allowance Percentage of Private Education Loan Exposure(5)(6)	5.89		%


Ending total loans, gross	$	20,791,497
Average loans in repayment(4)	$	15,287,312
Ending loans in repayment(4)	$	15,366,596
Unfunded loan commitments for loans held for investment(6)	$	1,700,089
Total accrued interest receivable	$	1,604,848

(1) See “—Provisions for Credit Losses” below in this Note 5 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “—Unfunded Loan Commitments” in this Note 5 for further discussion.

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

(4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).

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

(6) Unfunded loan commitments for loans held for investment and the calculation of the Total Allowance Percentage of Private Education Loan Exposure do not include $28 million of unfunded loan commitments associated with loans classified as held for sale at June 30, 2026. Due to the near-term timing of the loan sale and credit quality of the loans, we believe there is no risk of credit loss and are not recording an allowance for the unfunded loan commitments related to the loans classified as held for sale.


Three Months Ended June 30, 2025 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,443,715
Transfer from allowance for unfunded loan commitments	27,878
Provisions:
Provision for current period	92,189


Total provisions(1)	92,189
Net charge-offs:
Charge-offs	(106,866)
Recoveries	12,593
Net charge-offs	(94,273)

Allowance for loan losses, ending balance	$	1,469,509
Allowance for unfunded loan commitments, beginning balance(2)	23,890
Provision(1)(3)	56,529
Transfer to allowance for loan losses	(27,878)
Allowance for unfunded loan commitments, ending balance(2)	52,541
Total allowance for credit losses, ending balance	$	1,522,050








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	2.36		%
Allowance for loan losses coverage of net charge-offs (annualized)	3.90
Total Allowance Percentage of Private Education Loan Exposure(5)	5.95		%

Ending total loans, gross	$	22,525,817
Average loans in repayment(4)	$	15,991,357
Ending loans in repayment(4)	$	16,231,194
Unfunded loan commitments for loans held for investment	$	1,358,163
Total accrued interest receivable	$	1,701,944

(1) See “—Provisions for Credit Losses” below in this Note 5 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

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


Six Months Ended June 30, 2026 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,430,318
Transfer from allowance for unfunded loan commitments	127,503
Provisions:
Provision for current period	141,526
Loan sale reduction to provision	(130,912)
Loans transferred to held for sale	(12,803)
Total provisions(1)	(2,189)
Net charge-offs:
Charge-offs	(225,049)
Recoveries	23,431
Net charge-offs	(201,618)

Allowance for loan losses, ending balance	$	1,354,014
Allowance for unfunded loan commitments, beginning balance(2)	77,132
Provision(1)(3)	116,386
Transfer to allowance for loan losses	(127,503)
Allowance for unfunded loan commitments, ending balance(2)	66,015
Total allowance for credit losses, ending balance	$	1,420,029








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	2.55		%
Allowance for loan losses coverage of net charge-offs (annualized)	3.36
Total Allowance Percentage of Private Education Loan Exposure(5)(6)	5.89		%


Ending total loans, gross	$	20,791,497
Average loans in repayment(4)	$	15,786,152
Ending loans in repayment(4)	$	15,366,596
Unfunded loan commitments for loans held for investment(6)	$	1,700,089
Total accrued interest receivable	$	1,604,848

(1) See “—Provisions for Credit Losses” below in this Note 5 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

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


Six Months Ended June 30, 2025 (dollars in thousands)	Private Education Loans
Allowance for loan losses, beginning balance	$	1,435,920
Transfer from allowance for unfunded loan commitments	133,012
Provisions:
Provision for current period	187,478
Loan sale reduction to provision	(116,459)

Total provisions(1)	71,019
Net charge-offs:
Charge-offs	(193,769)
Recoveries	23,327
Net charge-offs	(170,442)

Allowance for loan losses, ending balance	$	1,469,509
Allowance for unfunded loan commitments, beginning balance(2)	84,568
Provision(1)(3)	100,985
Transfer to allowance for loan losses	(133,012)
Allowance for unfunded loan commitments, ending balance(2)	52,541
Total allowance for credit losses, ending balance	$	1,522,050








Net charge-offs as a percentage of average loans in repayment (annualized)(4)	2.11		%
Allowance for loan losses coverage of net charge-offs (annualized)	4.31
Total Allowance Percentage of Private Education Loan Exposure(5)(6)	5.95		%


Ending total loans, gross	$	22,525,817
Average loans in repayment(4)	$	16,146,239
Ending loans in repayment(4)	$	16,231,194
Unfunded loan commitments for loans held for investment	$	1,358,163
Total accrued interest receivable	$	1,701,944

(1) See “—Provisions for Credit Losses” below in this Note 5 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

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

Provisions for Credit Losses

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


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Provisions for credit losses:
Provisions for loan losses	$	55,193	$	92,189	$	(2,189)	$	71,019
Provisions for unfunded loan commitments	70,470		56,529		116,386		100,985
Provisions for credit losses reported in consolidated statements of income	$	125,663	$	148,718	114,197		172,004

Provision for credit losses for the six months ended June 30, 2026 decreased by $58 million, compared with the year-ago period. During the six months ended June 30, 2026, the provision for credit losses was primarily affected by $131 million in negative provisions recorded as a result of the $3.75 billion in Private Education Loan sales during the first six months of 2026 and changes in economic outlook, offset by new loan commitments, net of expired commitments. In the year-ago period, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in economic outlook, offset by $116 million in negative provisions recorded as a result of the $2.00 billion Private Education Loan sale during the first six months of 2025.

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

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

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

Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming.

For additional information, see Note 1, “Significant Accounting Policies — Allowance for Credit Losses” in this Form 10-Q and Note 7, “Allowance for Credit Losses and Unfunded Loan Commitments” in our 2025 Form 10-K.

Forbearance

Under our current forbearance practices, temporary forbearance of payments is generally granted in one-to-two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). During the first six months following a borrower’s grace period, the borrower may be eligible for extended grace forbearance in one six-month increment (which would also count towards the 12-month forbearance cap). Due to our current forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of forbearances will exceed the significance threshold under our accounting policy and, therefore, we do not consider the forbearances as loan modifications for the purposes of the tables below.

For additional information on our forbearance and modification programs, see Note 5, “Loans Held for Investment —Certain Collection Tools — Private Education Loans” in our 2025 Form 10-K. The tables below provide information about modifications to borrowers experiencing financial difficulty.

We offer certain administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are required by law (such as by the Servicemembers Civil Relief Act), are considered separate from our active loss mitigation programs, or do not exceed the significance threshold and therefore are not considered to be loan modifications requiring disclosure. In addition, we may offer on a limited basis term

extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. We do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.

Loan Modifications to Borrowers Experiencing Financial Difficulty

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


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended June 30, 2026 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	8,532	0.04	%	$	190,630	0.85	%
Total	$	8,532	0.04	%	$	190,630	0.85	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended June 30, 2025 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	7,093	0.03	%	$	134,398	0.55	%
Total	$	7,093	0.03	%	$	134,398	0.55	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Six Months Ended June 30, 2026 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	16,248	0.07	%	$	371,829	1.65	%
Total	$	16,248	0.07	%	$	371,829	1.65	%


	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Six Months Ended June 30, 2025 (dollars in thousands)	Interest Rate Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable
Private Education Loans	$	13,195	0.05	%	$	265,624	1.09	%
Total	$	13,195	0.05	%	$	265,624	1.09	%

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

Three Months Ended June 30,

2026

2025

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Financial Effect:

Reduced average contractual rate from 12.42% to 4.25%

Added a weighted average 9.47 years to the life of loans

Reduced average contractual rate from 11.85% to 2.94%

Reduced average contractual rate from 12.87% to 4.32%

Added a weighted average 9.32 years to the life of loans

Reduced average contractual rate from 12.29% to 3.98%

Six Months Ended June 30,

2026

2025

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Interest Rate Reduction

Combination -
Interest Rate Reduction and Term Extension

Financial Effect:

Reduced average contractual rate from 12.54% to 4.40%

Added a weighted average 9.50 years to the life of loans

Reduced average contractual rate from 11.92% to 2.94%

Reduced average contractual rate from 12.98% to 4.35%

Added a weighted average 9.35 years to the life of loans

Reduced average contractual rate from 12.23% to 3.99%

Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses” in our 2025 Form 10-K for a more detailed discussion.

For the periods presented, the following table presents the defaulted amount and period-end amortized cost basis, by modification category, of loans that defaulted during the period and were modified for borrowers experiencing financial difficulty during the 12 months preceding default. Solely for the purpose of the below table, our definition of payment default is two missed consecutive post-modification payment obligations. As such, defaulted amount represents the principal amount of modified loans at the time the borrower missed two consecutive post-modification payment obligations during the period. Loans that were modified during the twelve months ended June 30, 2026 and subsequently charged-off during the three and six months ended June 30, 2026 are not included in the period-end amortized cost basis and had an amortized cost basis of $16.0 million and $28.2 million at the time of charge-off, respectively.



	Three Months Ended June 30,
	2026				2025
(Dollars in thousands)	Defaulted Amount		Period-end Amortized Cost Basis		Defaulted Amount		Period-end Amortized Cost Basis
Loan Type:
Private Education Loans
Interest Rate Reduction	$	2,697	$	2,385	$	2,503	$	2,222
Combination - Interest Rate Reduction and Term Extension	38,048		33,356		50,033		45,210
Total	$	40,745	$	35,741	$	52,536	$	47,432



	Six Months Ended June 30,
	2026				2025
(Dollars in thousands)	Defaulted Amount		Period-end Amortized Cost Basis		Defaulted Amount		Period-end Amortized Cost Basis
Loan Type:
Private Education Loans
Interest Rate Reduction	$	3,825	$	2,973	$	3,887	$	3,196
Combination - Interest Rate Reduction and Term Extension	57,977		47,211		79,426		66,964
Total	$	61,802	$	50,184	$	83,313	$	70,160

We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that were modified within the six months prior to June 30, 2026, the 12 months prior to June 30, 2026, and the 12 months prior to December 31, 2025, respectively.


	Six Months Ended June 30, 2026				Twelve Months Ended June 30, 2026				Twelve Months Ended December 31, 2025
(Dollars in thousands)	Balance		%		Balance		%		Balance		%
Payment Status (Amortized Cost Basis at June 30, 2026)(1):
Loan modifications in deferment(2)	$	5,245			$	15,081			$	14,680
Loan modifications in repayment:
Loans current(3)(4)	270,708		71	%	479,762		76	%	358,054		70	%
Loans delinquent 30-59 days(3)(4)	46,125		12	%	63,325		10	%	68,823		13	%
Loans delinquent 60-89 days(3)(4)	28,841		7	%	39,100		6	%	41,592		8	%
Loans 90 days or greater past due(3)(4)	37,158		10	%	48,165		8	%	46,485		9	%
Total loan modifications in repayment	382,832		100	%	630,352		100	%	514,954		100	%
Total Private Education Loan modifications	$	388,077			$	645,433			$	529,634

(1) Loans that were modified during the twelve months ended June 30, 2026 and subsequently charged-off during the six months ended June 30, 2026 are excluded from the table and had an amortized cost basis of $28.2 million. Loans that were both modified and subsequently charged-off during the twelve months ended June 30, 2026 are excluded from the table and had an amortized cost basis of $42.1 million. Loans that were both modified and subsequently charged-off during the twelve months ended December 31, 2025 are excluded from the table and had an amortized cost basis of $39.1 million.

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

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

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

Private Education Loans Held for Investment - Key Credit Quality Indicators

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


As of June 30, 2026 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2026(1)		2025(1)		2024(1)		2023(1)		2022(1)		2021 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	991,815	$	4,964,770	$	3,514,495	$	1,914,043	$	1,737,913	$	5,342,004	$	18,465,040	89	%
Without cosigner	139,919		383,182		366,416		309,050		296,202		831,688		2,326,457		11
Total	$	1,131,734	$	5,347,952	$	3,880,911	$	2,223,093	$	2,034,115	$	6,173,692	$	20,791,497	100	%

FICO at Origination Approval(2):
Less than 670	$	80,803	$	341,876	$	232,357	$	182,582	$	180,764	$	535,805	$	1,554,187	7	%
670-699	144,145		636,273		468,996		325,694		294,838		1,002,040		2,871,986		14
700-749	333,733		1,523,655		1,175,230		690,110		637,923		2,063,592		6,424,243		31
Greater than or equal to 750	573,053		2,846,148		2,004,328		1,024,707		920,590		2,572,255		9,941,081		48
Total	$	1,131,734	$	5,347,952	$	3,880,911	$	2,223,093	$	2,034,115	$	6,173,692	$	20,791,497	100	%

FICO Refreshed(2)(3):
Less than 670	$	110,992	$	539,681	$	468,192	$	401,074	$	382,117	$	1,143,614	$	3,045,670	15	%
670-699	146,910		643,119		456,775		276,655		240,804		673,845		2,438,108		12
700-749	325,063		1,429,228		1,047,784		565,306		508,485		1,545,467		5,421,333		26
Greater than or equal to 750	548,769		2,735,924		1,908,160		980,058		902,709		2,810,766		9,886,386		47
Total	$	1,131,734	$	5,347,952	$	3,880,911	$	2,223,093	$	2,034,115	$	6,173,692	$	20,791,497	100	%

Seasoning(4):
1-12 payments	$	625,892	$	2,793,675	$	487,828	$	347,650	$	267,914	$	394,887	$	4,917,846	23	%
13-24 payments	—		532,772		1,968,361		205,184		175,357		343,448		3,225,122		16
25-36 payments	—		—		228,789		983,927		173,699		416,229		1,802,644		9
37-48 payments	—		—		—		190,864		945,077		477,390		1,613,331		8
More than 48 payments	—		—		—		—		140,105		3,996,149		4,136,254		20
Not yet in repayment	505,842		2,021,505		1,195,933		495,468		331,963		545,589		5,096,300		24
Total	$	1,131,734	$	5,347,952	$	3,880,911	$	2,223,093	$	2,034,115	$	6,173,692	$	20,791,497	100	%

2026 Current period(5) gross charge-offs	$	(100)	$	(7,253)	$	(29,820)	$	(40,405)	$	(37,018)	$	(110,453)	$	(225,049)
2026 Current period(5) recoveries	57		540		1,504		3,407		3,125		14,798		23,431
2026 Current period(5) net charge-offs	$	(43)	$	(6,713)	$	(28,316)	$	(36,998)	$	(33,893)	$	(95,655)	$	(201,618)

Total accrued interest by origination approval vintage	$	31,416	$	339,081	$	434,905	$	269,488	$	208,205	$	321,753	$	1,604,848
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the second quarter 2026. (4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5)Current period refers to period from January 1, 2026 through June 30, 2026.


As of December 31, 2025 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination Approval	2025(1)		2024(1)		2023(1)		2022(1)		2021(1)		2020 and Prior(1)		Total(1)		% of Balance
Cosigners:
With cosigner	$	3,983,409	$	4,968,667	$	2,324,100	$	1,950,843	$	1,366,905	$	4,621,467	$	19,215,391	89	%
Without cosigner	347,965		472,054		368,920		331,375		246,687		678,042		2,445,043		11
Total	$	4,331,374	$	5,440,721	$	2,693,020	$	2,282,218	$	1,613,592	$	5,299,509	$	21,660,434	100	%

FICO at Origination Approval(2):
Less than 670	$	263,280	$	321,462	$	214,219	$	199,017	$	127,109	$	464,693	$	1,589,780	7	%
670-699	520,721		654,923		390,691		326,675		227,358		886,853		3,007,221		14
700-749	1,254,937		1,645,649		834,804		716,088		516,516		1,794,886		6,762,880		31
Greater than or equal to 750	2,292,436		2,818,687		1,253,306		1,040,438		742,609		2,153,077		10,300,553		48
Total	$	4,331,374	$	5,440,721	$	2,693,020	$	2,282,218	$	1,613,592	$	5,299,509	$	21,660,434	100	%

FICO Refreshed(2)(3):
Less than 670	$	417,630	$	581,932	$	454,260	$	407,158	$	295,176	$	971,004	$	3,127,160	14	%
670-699	532,758		671,447		343,793		279,168		183,279		569,616		2,580,061		12
700-749	1,204,125		1,512,026		706,188		590,061		407,777		1,330,695		5,750,872		27
Greater than or equal to 750	2,176,861		2,675,316		1,188,779		1,005,831		727,360		2,428,194		10,202,341		47
Total	$	4,331,374	$	5,440,721	$	2,693,020	$	2,282,218	$	1,613,592	$	5,299,509	$	21,660,434	100	%

Seasoning(4):
1-12 payments	$	2,583,918	$	725,720	$	453,904	$	331,804	$	194,121	$	284,210	$	4,573,677	21	%
13-24 payments	—		2,859,837		319,450		205,689		132,671		299,208		3,816,855		18
25-36 payments	—		—		1,260,916		302,417		132,813		371,012		2,067,158		10
37-48 payments	—		—		—		1,039,762		232,301		420,441		1,692,504		8
More than 48 payments	—		—		—		—		706,571		3,471,137		4,177,708		19
Not yet in repayment	1,747,456		1,855,164		658,750		402,546		215,115		453,501		5,332,532		24
Total	$	4,331,374	$	5,440,721	$	2,693,020	$	2,282,218	$	1,613,592	$	5,299,509	$	21,660,434	100	%

2025 Current period(5) gross charge-offs	$	(1,579)	$	(21,763)	$	(73,247)	$	(69,089)	$	(51,038)	$	(182,920)	$	(399,636)
2025 Current period(5) recoveries	101		1,647		6,969		7,858		6,440		30,896		53,911
2025 Current period(5) net charge-offs	$	(1,478)	$	(20,116)	$	(66,278)	$	(61,231)	$	(44,598)	$	(152,024)	$	(345,725)

Total accrued interest by origination approval vintage	$	169,560	$	486,685	$	304,418	$	230,680	$	134,777	$	243,949	$	1,570,069

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

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

(3)Represents the FICO score updated as of the fourth quarter 2025.

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

(5)Current period refers to January 1, 2025 through December 31, 2025.

Delinquencies - Private Education Loans Held for Investment

The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval/first disbursement. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following tables, do not include loans in the “loans in forbearance” metric).


	Private Education Loans Held for Investment - Delinquencies by Origination Approval Vintage
As of June 30, 2026 (dollars in thousands)	2026			2025			2024			2023			2022			2021 and Prior			Total

Loans in-school/grace/deferment(1)	$	505,842		$	2,021,505		$	1,195,933		$	495,468		$	331,963		$	545,589		$	5,096,300
Loans in forbearance(2)	2,295			37,612			82,539			51,364			44,464			110,327			328,601
Loans in repayment:
Loans current	620,435			3,261,987			2,542,458			1,604,502			1,579,515			5,185,377			14,794,274
Loans delinquent 30-59 days(3)	2,267			16,491			30,351			35,301			36,292			169,062			289,764
Loans delinquent 60-89 days(3)	524			6,396			15,295			19,132			21,480			83,297			146,124
Loans 90 days or greater past due(3)	371			3,961			14,335			17,326			20,401			80,040			136,434
Total Private Education Loans in repayment	623,597			3,288,835			2,602,439			1,676,261			1,657,688			5,517,776			15,366,596
Total Private Education Loans, gross	1,131,734			5,347,952			3,880,911			2,223,093			2,034,115			6,173,692			20,791,497
Private Education Loans deferred origination costs and unamortized premium/(discount)	14,208			30,074			21,206			10,434			6,104			11,984			94,010
Total Private Education Loans	1,145,942			5,378,026			3,902,117			2,233,527			2,040,219			6,185,676			20,885,507
Private Education Loans allowance for losses	(57,118)			(282,369)			(241,613)			(176,768)			(162,087)			(434,059)			(1,354,014)
Private Education Loans, net	$	1,088,824		$	5,095,657		$	3,660,504		$	2,056,759		$	1,878,132		$	5,751,617		$	19,531,493

Percentage of Private Education Loans in repayment	55.1		%	61.5		%	67.1		%	75.4		%	81.5		%	89.4		%	73.9		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.5		%	0.8		%	2.3		%	4.3		%	4.7		%	6.0		%	3.7		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.4		%	1.1		%	3.1		%	3.0		%	2.6		%	2.0		%	2.1		%

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

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

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


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

Loans in-school/grace/deferment(1)	$	1,747,456		$	1,855,164		$	658,750		$	402,546		$	215,115		$	453,501		$	5,332,532
Loans in forbearance(2)	22,479			127,393			83,962			67,034			44,673			87,534			433,075
Loans in repayment:
Loans current	2,545,734			3,404,837			1,863,481			1,723,538			1,284,830			4,436,303			15,258,723
Loans delinquent 30-59 days(3)	10,981			29,336			41,888			44,106			33,983			170,013			330,307
Loans delinquent 60-89 days(3)	3,267			13,265			22,287			22,729			17,118			76,017			154,683
Loans 90 days or greater past due(3)	1,457			10,726			22,652			22,265			17,873			76,141			151,114
Total Private Education Loans in repayment	2,561,439			3,458,164			1,950,308			1,812,638			1,353,804			4,758,474			15,894,827
Total Private Education Loans, gross	4,331,374			5,440,721			2,693,020			2,282,218			1,613,592			5,299,509			21,660,434
Private Education Loans deferred origination costs and unamortized premium/(discount)	37,495			30,562			12,936			7,122			4,388			9,505			102,008
Total Private Education Loans	4,368,869			5,471,283			2,705,956			2,289,340			1,617,980			5,309,014			21,762,442
Private Education Loans allowance for losses	(231,497)			(312,665)			(211,732)			(182,408)			(122,163)			(369,853)			(1,430,318)
Private Education Loans, net	$	4,137,372		$	5,158,618		$	2,494,224		$	2,106,932		$	1,495,817		$	4,939,161		$	20,332,124

Percentage of Private Education Loans in repayment	59.1		%	63.6		%	72.4		%	79.4		%	83.9		%	89.8		%	73.4		%
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment	0.6		%	1.5		%	4.5		%	4.9		%	5.1		%	6.8		%	4.0		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.9		%	3.6		%	4.1		%	3.6		%	3.2		%	1.8		%	2.7		%

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

Accrued Interest Receivable

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


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

June 30, 2026	$	1,604,848	$	5,417	$	9,770
December 31, 2025	$	1,570,069	$	6,548	$	14,511

(1)At June 30, 2026 and December 31, 2025, $154 million and $164 million, respectively, of accrued interest receivable was not expected to be capitalized and $1.5 billion and $1.4 billion of accrued interest receivable was expected to be capitalized.

Unfunded Loan Commitments

When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval but, instead, have a commitment to fund a portion of the loan later (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by us. See Note 2, “Significant Accounting Policies - Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2025 Form 10-K for additional information.

At June 30, 2026, we had $1.7 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2026/2027 academic year, including $28 million of contractual loan commitments associated with loans classified as held for sale. The table below summarizes the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance.


	2026				2025
Three Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	23,754	$	587,882	$	23,890	$	584,140
Provision/New commitments - net(1)	70,470		1,848,800		56,529		1,459,626
Transfer - funded loans(2)	(28,209)		(673,590)		(27,878)		(685,603)
Unfunded loan commitments sold	—		(34,614)		—		—
Ending Balance(3)	$	66,015	$	1,728,478	$	52,541	$	1,358,163


	2026				2025
Six Months Ended June 30, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	77,132	$	2,437,035	$	84,568	$	2,311,660
Provision/New commitments - net(1)	116,386		2,945,185		100,985		2,503,584
Transfer - funded loans(2)	(127,503)		(3,095,958)		(133,012)		(3,457,081)
Unfunded loan commitments sold	—		(557,784)		—		—
Ending Balance(3)	$	66,015	$	1,728,478	$	52,541	$	1,358,163

(1) Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to provision for existing commitments.

(2) When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses.

(3) The ending balance of unfunded loan commitments includes $28 million of unfunded loan commitments associated with the loans classified as held for sale at June 30, 2026. Due to the near-term timing of the loan sale and credit quality of the loans, we believe there is no risk of credit loss and are not recording an allowance for the unfunded loan commitments related to the loans classified as held for sale.

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