SLM 10-K & 10-Q changes, risk factors and insider trading

•Our core product offerings are primarily concentrated in loanPrivate Education Loan products for higher education and deposit products for online depositors.services. Such concentrations and the competitive environment for those products and services subject us to risks that could adversely affect our financial position.

•We could lose market share if we are not able to keep pace with rapid changes in technology.technology (including AI).

•New lines of businessbusiness, strategic partnerships, and/or initiatives and our ability to successfully begin or make acquisitionsnew acquisitions, strategic partnerships, and/or initiatives are subject to significant risks.

2024 Form 10-K —22 SLM CORPORATION 22— 2025 Form 10-K

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. We describe certain of these riskrisks and uncertainties in this section, although we may be adversely affected by other risks or uncertainties that (i) are presently not known to us, (ii) we have failed to identify or appreciate, or (iii) we currently consider immaterial. 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 & COMPETITIVE RISK

Our core product offerings are primarily concentrated in loanPrivate Education Loan products for higher education and deposit products for online depositors.services. Such concentrations and the competitive environment for those products and services subject us to risks that could adversely affect our financial position.

In addition to competition from private industry players, theThe federal government, through the Federal Direct Student Loan Program and other higher education lending programs, also poses significant competition to our Private Education Loan products. The availability and terms of loans the government originates or guarantees affect the demand for Private Education Loans because students and their families often rely on Private Education Loans to bridge the gap between available funds, including family savings, scholarships, grants, and federal and state loans, and the costs of post-secondary education. The federal government currently places both annual and aggregate limits on the amount of federal loans any student can receive and determines the criteria for student eligibility. Parents and graduate students may obtain additional federal education loans through other programs, such as the Parent Plus and Graduate Plus programs, without any aggregate limits other than the difference between the cost of education and the amount of other financial aid received by a student. These federal education lending programs are generally adjusted in connection with funding authorizations from the U.S. Congress for programs under the Higher Education Act of 1965 (the “HEA”). TheHowever, HEA’sthe reauthorizationpassage isof currentlyH.R. pending1 in July 2025 introduced significant changes to federal student loan programs that are expected to reduce the U.S.federal Congress.government’s Reauthorization,borrowing ascapacity wellfor asgraduate measuresand professional students, creating substantial funding gaps for borrowers and shifting demand to Private Education Loans or other alternatives, particularly for students in high-cost educational programs. The impacts of H.R.1’s changes may result in increased risk of competition and market disruptions, borrower affordability challenges, and potential reputational considerations for private student loan lenders. Future legislative changes, amendments, or rulemakings related to or impacting the HEA, the Federal Direct Student Loan Program, H.R.1, and/or other government efforts to provide relief for borrowers of student loans in general, could provide a legislative vehicle for additional 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. 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.

•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.companies;

•demandDemand for higher education decreases (which can occur, among other times, during periods of strong employment in the United StatesStates, due to decreased interest or access to U.S. higher education by international students, and/or when fewer employers require college degrees for their employees (including as a result of changes to macroeconomic conditions, workforce needs, and/or changes in technology and AI));

We believe the design of our Private Education Loan products, with emphasis on rigorous underwriting, credit-worthy cosigners and variable or fixed interest rates, creates sustainable, competitive loan products. However, increasing amounts of private education consolidation loans at interest rates below those of our existing portfolio - whether from private sources (including FinTech companies) or otherwise - can contribute to an increase in the prepayment rates of our existing Private Education Loans and, if prolonged and continuous, could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows. 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.

Defaults on our loansPrivate Education Loans could adversely affect our business, financial condition, results of operations, and/or cash flows.

We bear the full credit exposure on ourthe Private Education Loans,Loans in our portfolio, which are unsecured loans. If those loans were to default at rates much higher than anticipated or at speeds faster than anticipated, our business, financial condition, results of operations, and/or cash flows could be adversely affected. Delinquencies are an important indicator of the potential future credit performance of our loan portfolio. Many factors can have an impact on borrower delinquencies, including, without limitation, economic conditions (including inflationary, rising or high interest rate, and recessionary environments), the imposition or removal of tariffs (indirectly affecting consumer prices, spending, and saving habits), 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),loans, 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.

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 impact of these factors may be heightened in rising or high interesthigh-interest rate environments when interest rates rise causing payments on variable-rate loans to increase. See Item 7. “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. As part of our underwriting process, we rely heavily upon information supplied by applicants and third parties. If any of this information is intentionally or negligently misrepresented, or is inaccurate, and is not detected by us before completing the transaction, or changes after we collect the information, we may experience increased credit risk. Higher credit-related losses and weaker credit quality negatively affect our business, financial condition, and results of operations and limit funding options, which could also adversely impact our liquidity position. 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.

We are required to measure our allowance for credit losses based on our estimate of all current expected credit losses over the remaining contractual term of our assets. The current expected credit loss (“CECL”) standard resulted in a significant change in how we recognize credit losses and has had a material impact on our financial condition, results of operations, and capital levels. The evaluation of our allowance for credit losses is inherently subjective, as it requires material estimates that may be subject to significant changes. The measurement of expected credit losses is based on historical information, current conditions, and reasonable and supportable forecasts to estimate the expected loss over the life of the loan. 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. Defaults can be higher than anticipated due to a variety of factors, and our models may not accurately estimate future loan loss performance. The models used in calculating our CECL estimates include forecasts of future economic conditions, the weighting of economic forecasts, prepayment speeds, and recovery rates. If these forecasts prove to be inaccurate, or our models were not designed properly, our allowance for credit losses may not be sufficient to cover future losses, which could negatively impact our financial condition, results of operations, and capital levels. In addition, the amount of losses recorded under CECL is very sensitive to the inputs described above. As such, changes to these inputs could significantly change the amount of allowance necessary, which could have a negative impact on our financial results and capital levels. Additionally, regulatory agencies may periodically review our allowance for credit losses, including our methodology and models used in calculating the allowance, and could insist on an increase in the allowance or recognition of additional charge-offs based on judgments different than those used by our management. 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 Estimates — Allowance for Credit Losses” for further details regarding our allowance for credit losses.

We are also subject to the creditworthiness of third parties, including various lending, securitization, strategic partnership, investment, and derivative counterparties. Our overall counterparty exposure is more fully discussed in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Counterparty Exposure.” If our counterparties are unable to perform their obligations, or the ability of our counterparties to perform their obligations becomes impaired or less certain, the obligations of our counterparties to us or our investments in any counterparties or their securities could become impaired, which could have a material adverse impact on our business, financial condition, results of operations, and/or cash flows.

We2025 areForm highly10-K dependent— onSLM netCORPORATION interest income, which is the difference between interest income on earning assets (such as loans and investments) and interest expense on deposits and borrowings. Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies of governmental agencies, general economic conditions, conditions in the capital markets, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future. We27 may be adversely affected by policies or events that have the effect of flattening or inverting the yield curve (that is, the difference between long-term and short-term interest rates), compressing interest rates on our earnings assets closer to interest rates on our deposits and borrowings, increasing the volatility of market rates of interest, or changing the spreads among different interest rate indices. Changes in interest rate levels also can lead to other adverse impacts, such as reducing the demand for or increasing the prepayment speeds of our Private Education Loans, increasing the delinquencies or defaults of our borrowers or other counterparties, reducing the value of our assets, or increasing our liabilities. 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. The level of and changes in market rates of interest and, as a result, these risks and uncertainties, are beyond our control.

Our use of derivatives also exposes us to market risk and credit risk. Market risk is the chance of financial loss resulting from changes in interest rates and market liquidity. Some of the interest rate swaps we use to economically hedge interest rate risk between our assets and liabilities do not qualify for hedge accounting treatment. Therefore, the change in fair value, called the “mark-to-market,” of the swaps that do not qualify as accounting hedges is included in our statement of income. A decline in the fair value of those derivatives could have a material adverse effect on our reported earnings. 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.

Set forth below are brief summaries of our key financial measures. Our operating results are primarily driven by net interest income from our Private Education Loan portfolio, gains and losses on loan sales, provision expense for credit losses, and operating expenses. The growth of our business and the strength of our financial condition are primarily driven by our ability to achieve our annual Private Education Loan origination goals while sustaining credit quality and maintaining cost-efficient funding sources to support our originations.

We may sell loans to third parties through whole loan sales, including loans sold to strategic partners, securitizations, or other similar transactions. We typically retain servicing of loans subsequent to their sale and earn revenue for this servicing at prevailing market rates for such services.services and also earn fee revenue for program management services for loans sold to strategic partners. Selling loans removes the loan assets from our balance sheet and helps us manage our asset growth, capital, and liquidity needs. Alternatively, we may use loans as collateral in connection with the creation of asset-backed securitizations or secured funding facilities structured as financings. These types of transactions may provide us long-term financing, but they do not remove loan assets from our balance sheet, nor do they generate gains on sales of loans, net. Consequently, our operating results may be significantly affected by whether we choose to sell loans and recognize current gains on sale or continue to hold or finance loans, thereby retaining some or all the net interest income from those loans. In 2024,2025, we recognized $255$369 million in gains from the sale of approximately $3.69$4.95 billion of our Private Education Loans, including $3.42$4.53 billion of principal and $274$422 million in capitalized interest, to unaffiliated third parties.

For additional information regarding these transactions, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment” and Note 10,11, “Borrowings -— Unconsolidated Funding Vehicles” in this Form 10-K.

During the third quarter of 2024, we transferred our remaining FFELP Loan portfolio to loans held for sale and subsequently sold the FFELP Loan portfolio to an unaffiliated third party in the fourth quarter of 2024. We wrote down the FFELP Loan portfolio to its estimated fair value through an adjustment to the allowance for credit losses of $8 million in 2024. For additional information, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment.Investment”.

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. 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. Each quarter, management makes an adjustment to the allowance for credit losses to reflect its most up-to-date estimate of future losses by recording a charge against quarterly revenues known as provision expense. As they occur, actual loan charge-offs and recoveries are then charged or credited, respectively, against the allowance for credit losses rather than against earnings.

The allowance for credit losses and provision expense rise in periods of high loan origination, when future charge-offs are expected to increase, and fall when future charge-offs are expected to decline. We bear the full credit exposure on our Private Education Loans. Losses on our Private Education Loans are affected by risk characteristics such as loan status (in-school, grace, forbearance, repayment, and delinquency), loan seasoning (number of months in active repayment), underwriting criteria (e.g., credit scores), presence of a cosigner, servicing and collections practices, and the current economic environment. See Item 1A “Risk Factors — CREDIT RISK — Defaults on our loans could adversely affect our business, financial condition, results of operations, and/or cash flows” for additional information. Losses typically emerge once a borrower separates from school and enters full principal and interest repayment after the borrower’s grace period (six months, typically) ends. As a larger proportion of our Private Education Loan portfolio enters full principal and interest repayment in the coming years, we would expect the dollar amount of charge-offs to increase.

The cost of operating our business directly affects our profitability. We strive to manage growth in our business in a prudent fashion by focusing on investments to improve efficiency.efficiency and while capturing anticipated growth opportunities, including our origination expansion initiative and other initiatives. We monitor and report internally various metrics, including cost to acquire and cost to service our loans (which include both owned and serviced loans), among others. We also monitor and report our efficiency ratio, which is calculated as total non-interest expenses divided by the sum of net interest income plus total non-interest income. For the years ended December 31, 2025, 2024, and 2023, the efficiency ratio was 33.2 percent, 34.7 percent, and 37.9 percent, respectively. 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. The cost to service a delinquent borrower is significantly higher than the cost to service a current or in-school borrower.

Though we rely primarily on depositsdeposits, loan sales, and loan securitizations to fund our loan originations, we also have access to a multi-lender secured borrowing facility (the “Secured Borrowing Facility”) and, from time to time, we access the debt capital markets through unsecured bond issuances. For additional information, see “—Borrowings — Long-term Borrowings” below in this Item 7.

We utilize brokered, retail, and other core deposits to meet funding needs and enhance our liquidity position. These deposits can be term or liquid deposits. Our term brokered deposits have original terms from three months to ten years. Retail deposits are sourced through a direct banking platform and serve as an important source of diversified funding. Brokered deposits are sourced through a network of brokers and provide a stable source of funding. In addition, we accept certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors. We further diversify our funding sources with deposits from Educational 529 savings plans and Health Savings plans.

2024 Form 10-K —50 SLM CORPORATION 47— 2025 Form 10-K

•Gains on sales of loans, net, were $255 million in 2024, compared with $160 million in 2023, compared with $328 million in 2022.2023. The decreaseincrease in gains on sales of loans was primarily the result of selling approximately $3.69 billion of Private Education Loans in 2024, compared with the sale of approximately $3.15 billion of Private Education Loans in 2023,2023. comparedAdditionally, withwe the sale of approximately $3.34 billion of Private Education Loans in 2022, andreceived lower sales premiums received in 2023 as compared to 2022,2024 which were attributabledue to highermovement in market interest rates in 2023. We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023.

The following discussion and analysis presents a review of our business and operations as of and for the three and six months ended MarchJune 31,30, 2026.

Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

For the three months ended MarchJune 31,30, 2026, net income attributable to common stock was $304$55 million, or $1.54$0.29 diluted earnings per common share, compared with net income attributable to common stock of $301$67 million, or $1.40$0.32 diluted earnings per common share, for the three months ended MarchJune 31,30, 2025.

•Net interest income wasdecreased $375by $44 million in both the current quarter andcompared with the year-ago quarter.quarter primarily due to a $1.4 billion decrease in our average Private Education Loans outstanding and an $866 million increase in the average balance of lower yielding cash and short-term investments compared to the year-ago period. The decline in average loans outstanding was due to the $2.04 billion seasoned loan sale in March 2026. Our net interest margin increaseddecreased 2 basis56-basis points in the current quarter from the year-ago quarter primarily because the yields on our interest-earning assets decreased slightly lessmore than our cost of funds decreased. The yields on both our interest-earning assets andprimarily ourdecreased because the proportion of total interest-earning assets that were Private Education Loans was lower in the current quarter than the year-ago quarter due to the seasoned loan sale in March 2026. Our cost of funds decreased primarily due to the decline in the 30-day average SOFR rate compared to the year-ago quarter.

•Provision for credit losses in the current quarter was $11$126 million in negative provisions,million, compared with $23$149 million of provisions in the year-ago quarter. The year-over-year decrease was primarily due to $120$11 million in negative provisions recorded in the current quarter, resulting from the $3.33$420 billion inmillion Private Education Loan salessale to the strategic partner during the firstsecond quarter of 2026 and the $10 million reversal of provisionchanges in theeconomic current quarter due to the transfer of loans to held for sale.outlook. These drivers were offset by new loan commitments, net of expired commitments, and changes in the economic outlook.commitments. In the year-ago quarter, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in the economic outlook, offset by $116 million in negative provisions resulting from the $2.00 billion Private Education Loan sale during the quarter and adjustments to the weightings of our economic forecast scenarios.outlook.

•Gains on sales of loans, net, were $146$15 million in the firstsecond quarter of 2026, as a result of the $3.33$420 billionmillion Private Education Loan salessale to the strategic partner that occurred in the quarter. There were $188 millionno gains on sales of loans, net, in the year-ago quarter, as ano resultloans of $2.00 billion Private Education Loanswere sold in the firstsecond quarter of 2025. Gains on sales of loans, net, in the first quarter of 2026 was less than the year-ago quarter primarily due to the January 2026 loan sale, which included newly originated loans that were not fully-disbursed, and the resulting gain on sale expressed as a percentage was in the low single-digits, as well as lower pricing in the first quarter 2026 seasoned loan sale compared to the loan sales in the year-ago quarter.

•LossesGains (losses) on securities, net, were $2$8 million in lossesgains in the current quarter compared with $10$3 million of losses in the year-ago quarter. The change compared to the year-ago quarteryear-over-year was primarily due to an impairment recorded in the first quarter of 2025 on certain of our non-marketable equity securities, and the changes in mark-to-fair value of our trading investments.

•Other income was $41$45 million in the firstsecond quarter of 2026, compared with $29 million in the year-ago quarter. Third-party servicing fees in the firstsecond quarter of 2026 increased $6$9 million compared to the year-ago quarter due to an additional $6.28$6.22 billion of loansloan thatprincipal webalance sold during the past year that we continue to service on behalf of the owners of the loans. Other income also increased due to the program management fees from the strategic partnership we entered into during the fourth quarter of 2025.

•FirstSecond quarter 2026 total operating expenses were $170$194 million, up from $154$166 million in the year-ago quarter. The increase in total operating expenses was primarily due to increased personnel costscosts, additional marketing spend, and higher spending on information technology initiatives, offset by lower FDIC fees.

•During the firstsecond quarter of 2026, we recorded $1 million in amortization of acquired intangible assets, consistent with $1 million in the year-ago quarter.

•FirstSecond quarter 2026 income tax expense was $92$22 million, compared with $99$16 million income tax expense in the year-ago quarter. Our effective income tax rate decreasedincreased to 23.127.3 percent in the firstsecond quarter of 2026 from 24.518.7 percent in the year-ago quarter. The decreaseincrease in the effective rate for the firstsecond quarter of 2026 was primarily due to a decreasenon-recurring deferred tax revaluation benefit recognized in statethe incomesecond taxes.quarter of 2025.

“Loan consolidations to third parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in P&I repayment status. Loans in P&I repayment status include loans in full principal and interest repayment status as well as certain loans in short-term interest-only payment programs (such as loans in a Graduated Repayment Period program and loans in a short-term interest only alternative program). The amount of loans in P&I repayment status in our Private Education Loans held for investment portfolio at MarchJune 31,30, 2026 wasdecreased consistentby 1.7 percent compared with MarchJune 31,30, 2025, and now totals 4345.3 percent of our Private Education Loans held for investment portfolio at MarchJune 31,30, 2026. The balance of loans held for investment in P&I repayment status was primarily affected in 2025 and the first threesix months of 2026 by loan sales.

“Loan consolidations to third parties” for the three months ended MarchJune 31,30, 2026 total 3.8 percent of our Private Education Loans held for investment portfolio in P&I repayment status at MarchJune 31,30, 2026, or 1.61.7 percent of our total Private Education Loans held for investment portfolio at MarchJune 31,30, 2026, compared with the year-ago quarter of 2.62.3 percent of our Private Education Loans held for investment portfolio in P&I repayment status, or 1.11.0 percent of our total Private Education Loans held for investment portfolio, respectively. The increase in consolidations compared to the year-ago quarter is primarily attributable to lower interest rates in 2026. Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.

(2) For the three months ended MarchJune 31,30, 2026, the Graduate Loan originations include $8.7$3.6 million of Smart Option Loans where the student was in a graduate status. For the three months ended MarchJune 31,30, 2025, the Graduate Loan originations include $8.7$3.2 million of Smart Option Loans where the student was in a graduate status. For the six months ended June 30, 2026, the Graduate Loan originations include $12.3 million of Smart Option Loans where the student was in a graduate status. For the six months ended June 30, 2025, the Graduate Loan originations include $11.9 million of Smart Option Loans where the student was in a graduate status.

Below(2) isThe following table provides a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

In establishing the allowance for Private Education Loan losses as of MarchJune 31,30, 2026, we considered several factors with respect to our Private Education Loan held for investment portfolio, in particular, credit quality and delinquency, forbearance, and charge-off trends.

Private Education Loans held for investment in P&I repayment status were 4345 percent of our total Private Education Loans held for investment portfolio at MarchJune 31,30, 2026, compared with 4143 percent at MarchJune 31,30, 2025.

(4)We calculate the percentage of loans in an extended grace period as the ratio of (a) Private Education Loans in forbearance in an extended grace period numerator to (b) Private Education Loans in repayment and forbearance denominator. An extended grace period aligns with The Office of the Comptroller of the Currency definition of an additional, consecutive, one-time period during which no payment is required for up to six months after the initial grace period. We typically grant this extended grace period to customers who may be having difficulty finding employment before the full principal and interest repayment period starts or once it has begun. Loans in forbearance in an extended grace period were approximately $331$164 million and $314$154 million at MarchJune 31,30, 2026 and 2025, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.

(5)We calculate the percentage of loans in hardship and other forbearances as the ratio of (a) Private Education Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) numerator to (b) Private Education Loans in repayment and forbearance denominator. If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations, which may include a short-term hardship forbearance. Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) were approximately $157$164 million and $151$150 million at MarchJune 31,30, 2026 and 2025, respectively. See “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” below for additional details.

Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 4.03.7 percent at MarchJune 31,30, 2026 from 3.63.5 percent at MarchJune 31,30, 2025. TheWe believe the increase in the delinquency metric is primarily attributabledriven by misaligned third-party debt resolution practices affecting a segment of high-ability-to-pay borrowers resulting in their loans progressing straight through delinquency to changes and refinements to our loss mitigation programs in late 2024 which generally restricted loan modification eligibility to borrowers in later-stage delinquency. While the changes and refinements were made in late 2024, the full impact on delinquencies was not observed until late in the first quarter of 2025.default. Also impacting the delinquency percentage, was a shift in the composition of the loans in repayment portfolio (which does not include the loans held for sale) due to the sale of younger loans as part of our strategic partnership funding model.model $236and the larger size of the recent repayment cohort compared to prior quarters. $172 million of newly originated loans were transferred to held for sale status during the firstsecond quarter of 2026 and sold in AprilJuly 2026 to our strategic partner. See Note 16, “Subsequent Events” in this Form 10-Q for additional information. See additional discussion related to collections activity in Part II, Item 7. “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” in the 2025 Form 10-K.

The percentage of loans in an extended grace forbearance increased to 2.11.1 percent at MarchJune 31,30, 2026 from 1.90.9 percent at MarchJune 31,30, 2025. The increase was primarily due to additional enrollments in extended grace forbearance and the shift in the composition of the loans in repayment portfolio (which does not include the loans held for sale) due to the sale of younger loans as part of our strategic partnership funding model. $236$172 million of newly originated loans were transferred to held for sale status during the firstsecond quarter of 2026. See Note 16, “Subsequent Events” in this Form 10-Q for additional information. The percentage of loans in hardship and other forbearances remained relatively consistent at 1.0 percent and 0.9 percent at MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.

(2) See “—Financial Condition — Allowance for Credit Losses — ProvisionAllowance for CreditLoan Losses” in this Item 2 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

(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 $35$28 million of unfunded loan commitments associated with loans classified as held for sale at MarchJune 31,30, 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 tables below show the composition and status of the Private Education Loan portfolio held for investment aged by number of months in active repayment status (months for which a scheduled monthly payment was due). Active repayment status includes 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. Our experience shows that the percentage of loans in forbearance status generally decreases the longer the loans have been in active repayment status. At MarchJune 31,30, 2026, Private Education Loans (held for investment) in forbearance that have been in active repayment status for fewer than 25 months as a percentage of all loans in repayment and forbearance were 2.31.5 percent. At MarchJune 31,30, 2026, approximately 7574 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status for fewer than 25 months.

The following table provides information regarding the loans in repayment balance and total loan balance by Private Education Loan held for investment product type at MarchJune 31,30, 2026 and December 31, 2025.

(1)The allowance for uncollectible interest at MarchJune 31,30, 2026 and 2025 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at MarchJune 31,30, 2026 and 2025, relates to $153$154 million and $156$159 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized. The accrued interest receivable that is/was expected to be capitalized ($1.4$1.5 billion at both MarchJune 31,30, 2026 and 2025) is/was reserved in the allowance for credit losses.

Our primary funding and liquidity objective is to support our businesses throughout market cycles, including during periods of financial stress. Our business needs primarily include funding originations of Private Education Loans and meeting any deposits outflows at the Bank. To achieve these objectives, we maintain access to a diverse set of funding sources, such as retail deposits, brokered deposits, asset-backed securitizations, unsecured debt, other financing facilities, and loan sales. We maintained liquidity reserves in the form of unrestricted cash and liquid investments of $6.3$5.6 billion and $5.4 billion as of MarchJune 31,30, 2026 and December 31, 2025, respectively, as noted in the table below.

At bothJune March 31,30, 2026 and December 31, 2025, our sources of liquidity included unrestricted cash, primarily held at the Federal Reserve Bank, and liquid investments with unrealized losses of $59.1 million and $61.2 million.million, respectively. It is our policy to maintain a liquidity stockpile that is sufficientlysufficient liquidin size and sizedquality to meet our financial obligations in normal and stressed times. Our liquidity risk management is governed by policies approved by our Board of Directors. Oversight of these policies is performed at the Asset and Liability Committee, a management-level committee. These policies consider the volatility of cash flow forecasts, expected asset and liability maturities, anticipated loan demand, and a variety of other factors to establish minimum liquidity guidelines.

Key risks associated with our liquidity relate to our ability to access the capital markets and deposit markets at reasonable rates. This ability may be affected by our performance, competitive pressures, the macroeconomic environment, and the impact they have on the availability of funding sources in the market. 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 and specific stresses that test the resiliency of our balance sheet. At MarchJune 31,30, 2026, we held a significant liquidity buffer of unrestricted cash and government-backed investments, which we expect to maintain in the future. Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.

The following table summarizes total deposits at MarchJune 31,30, 2026 and December 31, 2025.

Our total deposits of $20.5$19.9 billion were comprised of $8.7$8.2 billion in brokered deposits and $11.8$11.6 billion in retail and other deposits at MarchJune 31,30, 2026, compared with total deposits of $21.1 billion, which were comprised of $8.8 billion in brokered deposits and $12.3 billion in retail and other deposits, at December 31, 2025.

Interest-bearing deposits as of MarchJune 31,30, 2026 and December 31, 2025 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity 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. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $6.8 billion and $7.6 billion of our deposit total as of MarchJune 31,30, 2026 and December 31, 2025, respectively. 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. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $2 million in both the three months ended MarchJune 31,30, 2026 and 2025 and placement fee expense of $4 million in both the six months ended June 30, 2026 and 2025. There were no fees paid to third-party brokers related to brokered CDs in the three months ended June 30, 2026 and $5 million in fees paid to third-party brokers related to brokered CDs for the threesix months ended MarchJune 31,30, 2026. There were no fees paid to third-party brokers related to brokered CDs for either the three or six months ended MarchJune 31,30, 2025.

Interest bearing deposits at MarchJune 31,30, 2026 and December 31, 2025 are summarized as follows:

As of MarchJune 31,30, 2026 and December 31, 2025, there were $651$615 million and $557 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $56$70 million and $71 million at MarchJune 31,30, 2026 and December 31, 2025, respectively.

Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of MarchJune 31,30, 2026, $11$10 million notional of our derivative contracts were cleared on the CME and $5$2 million were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 66.679.2 percent and 33.420.8 percent, respectively, of our total notional derivative contracts of $16$12 million at MarchJune 31,30, 2026.

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 MarchJune 31,30, 2026 was immaterial for both the CME and LCH. 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. When there is a net negative exposure, we consider our exposure to the counterparty to be zero. At MarchJune 31,30, 2026 and December 31, 2025, we had a net positive exposure (derivative gain/loss positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $0.1 million and $0.1 million, respectively.

The table below highlights exposure related to our derivative counterparties as of MarchJune 31,30, 2026.

We believe that current and projected capital levels are appropriate for 2026. As of MarchJune 31,30, 2026, 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. Basel III standards as well as the “well capitalized” standards under the prompt corrective action framework.

The Bank is chartered under the laws of the State of Utah, and its deposits are insured by the FDIC. 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. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein. The Bank declared $200 million and $100$400 million in dividends to the Company for the three and six months ended MarchJune 31,30, 20262026, respectively, and $94 million and $194 million in dividends to the Company for the three and six months ended June 30, 2025, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. 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.

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 VIEs and are consolidated for accounting purposes. The following table summarizes our borrowings at MarchJune 31,30, 2026 and December 31, 2025, respectively. For additional information, see Note 8, “Borrowings” in this Form 10-Q.