v3.26.1
Borrowings
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Borrowings Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securities (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Note 11, “Borrowings” in our 2025 Form 10-K. The following table summarizes our borrowings at June 30, 2026 and December 31, 2025.

June 30, 2026December 31, 2025
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $988,122 $988,122 $498,415 $493,415 $991,830 
Total unsecured borrowings— 988,122 988,122 498,415 493,415 991,830 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 4,204,866 4,204,866 — 4,174,513 4,174,513 
Variable-rate— 651,128 651,128 — 694,566 694,566 
Total Private Education Loan term securitizations— 4,855,994 4,855,994 — 4,869,079 4,869,079 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,855,994 4,855,994 — 4,869,079 4,869,079 
Total$— $5,844,116 $5,844,116 $498,415 $5,362,494 $5,860,909 

Long-term Borrowings
Unsecured Borrowings Transactions
On January 31, 2025, we issued $500 million of 6.50 percent unsecured Senior Notes due January 31, 2030 (the “2030 Senior Notes”), at a price of 99.78 percent. At June 30, 2026, the outstanding carrying value, net of deferred financing fees, was $494 million.
On February 18, 2025, we redeemed $500 million of the 4.20 percent unsecured Senior Notes due October 29, 2025 (the “2025 Senior Notes”). The 2025 Senior Notes were redeemed at 100 percent of their principal amount, plus the accrued and unpaid interest thereon through the redemption date. As a result of the redemption, we recognized a $1 million loss on the transaction.
On May 15, 2026, we issued $500 million of 6.495 percent unsecured Senior Notes due May 15, 2032 (the “2032 Senior Notes”), at a price of 100 percent. At June 30, 2026, the outstanding carrying value, net of deferred financing fees, was $494 million.
Tender Offer
On May 12, 2026, we completed a cash tender offer for any and all of the $500 million of 3.125 percent unsecured Senior Notes due November 2, 2026 (the “2026 Senior Notes”), which was made concurrently with the offerings of the 2032 Senior Notes (the “Tender Offer”). We paid an aggregate consideration of $447 million in the Tender Offer to repurchase $448 million principal amount of the 2026 Senior Notes at a repurchase price equal to 99.58 percent of the principal amount plus accrued and unpaid interest. The repurchase of the 2026 Senior Notes accepted for purchase in the Tender Offer was accounted as a debt extinguishment.
Satisfaction and Discharge of 2026 Senior Notes
On May 15, 2026, we irrevocably deposited funds with the 2026 Senior Notes’ trustee that were used to purchase a sufficient amount of U.S. government obligations to satisfy and discharge the indenture governing the 2026 Senior Notes, fund the payment of accrued and unpaid interest on the remaining $52 million principal amount of the 2026 Senior Notes as it becomes due, and fund the principal amount of those 2026 Senior Notes on their November 2, 2026 maturity date. The U.S. government obligations were purchased using a portion of the net proceeds from the offering of the 2032 Senior Notes. After the deposit of such funds with the trustee, our obligations under the 2026 Senior Notes indenture were satisfied and discharged and the transaction was accounted for as a debt extinguishment.
As a result of the debt extinguishment of the 2026 Senior Notes, we recognized a gain of less than $1 million on the transactions described above.
Secured Borrowings Transactions
The following table summarizes our term ABS fundings issued in the year ended December 31, 2025 and in the six months ended June 30, 2026, in which we retained 100 percent of the residual class certificates and which are collateralized by pools of Private Education Loans. The transfer of these loans did not qualify for sale treatment and thus remain encumbered on our consolidated balance sheet.
SMB Private Education
Loan Trust		Date Closed
Loans
Transferred to
the Trust(1)
Notes
Issued		Gross Proceeds
Weighted Average Cost of Funds(2)
Weighted Average Life of Notes
 (in years)
(Dollars in thousands)
2025-A ABS TransactionMay 7, 2025$576,908 $539,000 $538,889 
SOFR plus 1.49%
5.46
Total 2025$576,908 $539,000 $538,889 
Loans encumbered at June 30, 2026, related to 2025 term ABS:$513,140 
2026-A ABS TransactionMarch 11, 2026$649,813 $618,000 $617,781 
SOFR plus 1.15%
5.64
Total 2026$649,813 $618,000 $617,781 
Loans encumbered at June 30, 2026, related to 2026 term ABS:$632,214 

(1) Represents principal and capitalized interest.
(2) Represents SOFR equivalent cost of funds for variable and fixed-rate bonds, excluding issuance costs.
Secured Borrowing Facility
On June 13, 2025, we amended our Secured Borrowing Facility to increase the amount to be borrowed under the facility from $2 billion to $2.5 billion and extended the maturity. We hold 100 percent of the residual interest in the Secured Borrowing Facility Trust. The amendment extended the revolving period until June 12, 2026, and a subsequent amendment on June 12, 2026 further extended the revolving period to July 27, 2026. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on June 12, 2027 (or
earlier, if certain material adverse events occur). 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. At both June 30, 2026 and December 31, 2025, there were no outstanding borrowings under the Secured Borrowing Facility.

Consolidated Funding Vehicles
We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.
As of June 30, 2026
(dollars in thousands)
Debt OutstandingCarrying Amount of Net Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets,
Net(1)
Total
Secured borrowings:
Private Education Loan
term securitizations		$— $4,855,994 $4,855,994 $6,220,983 $174,852 $401,067 $6,796,902 
Secured Borrowing
Facility		— — — — — — — 
Total$— $4,855,994 $4,855,994 $6,220,983 $174,852 $401,067 $6,796,902 


As of December 31, 2025
(dollars in thousands)
Debt OutstandingCarrying Amount of Net Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets,
Net(1)
Total
Secured borrowings:
Private Education Loan
term securitizations		$— $4,869,079 $4,869,079 $6,249,064 $177,260 $377,673 $6,803,997 
Secured Borrowing
Facility		— — — — — 1,324 1,324 
Total$— $4,869,079 $4,869,079 $6,249,064 $177,260 $378,997 $6,805,321 

(1) Other assets, net primarily represents accrued interest receivable and payable.
Unconsolidated Funding Vehicles
Private Education Loan Securitizations
Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own five percent of the securities issued by the trusts, as a vertical interest, to meet risk retention requirements. We were not required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an insignificant amount of the VIE’s expected residual returns. We classified those vertical risk retention interests related to securitization transactions as available-for-sale investments, except for the interest in the residual class, which we classified as trading investments recorded at fair value with changes recorded through earnings. The following summarizes our Private Education Loan ABS transactions closed in the six months ended June 30, 2026 where the respective VIEs were not consolidated.
SMB Private Education Loan TrustDate ClosedLoans Transferred to the Trust by Third-Party SellerDate Third-Party Seller Previously Purchased Loans from the Bank
Additional Loans the Bank Transferred to the Trust(1)
Gain on Sale for Additional Loans Transferred by Bank
(Dollars in thousands)
2026-B ABS transaction(2)
April 2, 2026$1,364,421 February 6, 2025$72,413 $6,031 
2026-C ABS transaction(2)
April 15, 20262,037,435 March 25, 2026108,313 5,227 
(1)The transfer of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the transaction.
(2)Sallie Mae Bank sponsored the transaction and is the servicer and administrator.

The table below provides a summary of our exposure related to our unconsolidated VIEs.
June 30, 2026
December 31, 2025
(Dollars in thousands)
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$750,395 $55,938 $806,333 $622,184 $49,250 $671,434 

(1) Vertical risk retention interest classified as available-for-sale investment.
(2) Vertical risk retention interest classified as trading investment.

Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at June 30, 2026. 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 six months ended June 30, 2026, nor in the year ended December 31, 2025.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. 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. At June 30, 2026 and December 31, 2025, the value of our pledged collateral at the FRB totaled $2.2 billion and $2.5 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the six months ended June 30, 2026, nor in the year ended December 31, 2025.