What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-20 · 247 added, 277 removed, 984 unchanged (35% of the section changed)

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The following discussion and analysis presents a review of our business and operations as of and for the year ended December 31, 2025.

Changes to Federal Student Loan Programs

On July 4, 2025, H.R.1 (“H.R.1”) was enacted into law.

H.R.1 implements significant reforms to the federal student loan program, including:

• Limiting Parent PLUS loans to $20,000 per student, per year, with an aggregate, per student limit of $65,000;

• Eliminating Graduate PLUS loans, which previously allowed graduate students to borrow up to the full cost of attendance;

• Limiting the amount graduate students can borrow to $20,500 per year with a $100,000 lifetime limit, and the amount professional graduate students can borrow to $50,000 per year with a $200,000 lifetime limit through the Unsubsidized Stafford loan program (these amounts are in addition to the amount borrowed for undergraduate education).

All federal student loan program changes are to be effective for new borrowers beginning July 1, 2026, and will not apply to borrowers who begin borrowing prior to that date.

We anticipate that these changes to the federal student loan program will present opportunities for a gradual and positive impact on our overall Private Student Loan originations volume in the coming years.

As we continue the near-term planning, growth, and scaling of our origination expansion initiative and our strategic partnership funding model, we may see trends or uncertainties from increased marketing, technology, infrastructure, and operational costs, which may result in margin and/or expense pressures.

These expected investments are necessary to support the execution of these new initiatives, which address anticipated increases in demand for Private Education Loans and related financial products (particularly in light of recent changes to federal higher education funding).

Strategic Imperatives

To focus our business and increase shareholder value, we continue to advance our strategic imperatives.

Our primary focus remains on maximizing the profitability and growth of our core private student loan business, while harnessing and optimizing the power of our brand and attractive client base.

In addition, we continue to seek to better inform the external narrative about student lending and Sallie Mae, and strive to maintain a rigorous and predictable capital allocation and return program to create shareholder value.

We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work, while we continue to strengthen our risk and compliance functions, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk.

To further focus our business and increase stockholder value, we continue to advance our strategic imperatives.

Our primary focus is driving innovation to maximize the sustainable growth and profitability of our core private student loan business.

Additionally, we aim to accelerate the growth of new lines of business to attract more customers requiring our products and services.

We are also focused on building the data infrastructure, technology, and talent required to compete in a digital world.

We seek to create a customer-centric brand as an education solutions company that supports students and families through their higher education journey.

We are focused on driving greater internal commitment to our mission, brand, and strategy, while we evolve our structure and risk capabilities to support our core private student loan business and emerging new businesses.

Key Financial Measures

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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.

The growth of our business and the strength of our financial condition are primarily driven

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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.

Net Interest Income and Net Interest Margin

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Loan Sales and Secured Financings

We may sell loans to third parties through whole loan sales, 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.

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 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.

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In 2025, we recognized $369 million in gains from the sale of approximately $4.95 billion of our Private Education Loans, including $4.53 billion of principal and $422 million in capitalized interest, to unaffiliated third parties.

2024 Form 10-K — SLM CORPORATION 45

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

During the fourth quarter of 2025, we transferred $933 million from loans held for investment to loans held for sale as we intended to sell the loans to a leading global investment firm (the “Strategic Partner”).

In January 2026, we sold the loans to the Strategic Partner.

The transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date.

For additional information, see Notes to Consolidated Financial Statements, Note 6, “Loans Held for Sale”.

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”.

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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.

See “ — Critical Accounting 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.

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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.

Losses typically emerge once a borrower separates from school and enters full principal and interest repayment after the borrower’s grace

48 SLM CORPORATION — 2025 Form 10-K

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.

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We sell a segment of defaulted loans immediately after charge-off, and use in-house collectors and third-party collectors to collect on retained defaulted loans.

As part of our new strategic partnership funding model, we plan to sell newly originated loans for the first time.

This shift to selling younger loans is expected to change the composition of our loans in repayment portfolio (which does not include loans held for sale), as loans sold will be younger at the point of sale than in prior periods.

As a result, we expect to see increases to our credit metrics that are calculated as percentages using "loans in repayment" as the denominator, including but not limited to, net charge-offs as a percentage of average loans in repayment and delinquencies as a percentage of loans in repayment.

Operating Expenses

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.

We strive to manage growth in our business in a prudent fashion by focusing on investments to improve 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.

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Private Education Loans are the principal asset on our balance sheet, and the amount of new Private Education Loan originations we generate each year is a key indicator of the trajectory of our business, including our future earnings and asset growth.

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Funding Sources

Though we rely primarily on deposits 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.

Though we rely primarily on deposits, 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.

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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.

In addition, we accept certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to

2025 Form 10-K — SLM CORPORATION 49

flow through to underlying individual depositors.

We further diversify our funding sources with deposits from Educational 529 savings plans and Health Savings plans.

We use proceeds from loan sales to fund Private Education Loan originations, share repurchase programs, and other activities.

Historically, we have sold portfolios of Private Education Loans as one-off, seasoned loan sales.

As part of our new strategic partnership funding model, we will sell newly originated and not fully-disbursed Private Education Loans to strategic partners, and also plan to continue to execute sales of seasoned Private Education Loans.

Loan Securitizations

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Loans associated with these transactions will remain on our balance sheet if we retain the residual interest in the related trusts.

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50 SLM CORPORATION — 2025 Form 10-K

Results of Operations

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For the year ended December 31, 2025, net income was $745 million, or $3.46 diluted earnings per common share, compared with net income of $608 million, or $2.68 diluted earnings per common share, for the year ended December 31, 2024.

The year-over-year increase was primarily attributable to an increase in gains on sales of loans, net and other income and a decrease in total non-interest expense, which were offset by a decrease in total net interest income and an increase in provisions for credit losses.

The year-over-year increase was primarily attributable to an increase in total net interest income, a decrease in provisions for credit losses, and an increase in gains on sales of loans, net, and other income, which were offset by an increase in total non-interest expense.

The primary contributors to the drivers of change in net income for the current year period compared with the year-ago period are as follows:

• Net interest income in 2024 decreased by $82 million compared with the year-ago period primarily due to a 31-basis point decrease in our net interest margin and an $79 million decrease in average Private Education Loans and FFELP Loans outstanding.

Our net interest margin decreased in the current period from the year-ago period primarily because our cost of funds increased more than the yields on our interest-earning assets.

As interest rates change, changes in the cost of our interest-bearing liabilities tend to lag compared to changes in the yields on our interest-earning assets.

In a rising interest rate environment, as we experienced in 2022 and the first part of 2023, our variable-rate interest earning assets repriced faster than our cost of funds.

As such, we saw an expansion in our net interest margin throughout most of 2023.

As interest rates stabilized in the latter half of 2023 and into the first half of 2024, our cost of funds increased faster than our interest-earning assets yields and reduced our net interest margin.

• Net interest income in 2025 increased by $22 million compared with the year-ago period primarily due to a $1.5 billion increase in average Private Education Loans outstanding and a 5-basis point increase in our net interest margin.

Our net interest margin increased in the current period from the year-ago period primarily because our cost of funds decreased but the yields on our interest-earning assets were unchanged.

Our cost of funds decreased primarily due to the decline in the 30-day average SOFR compared to the year-ago period.

The yields on our interest-earning assets were unchanged compared to the year-ago period because the yields on our Private Education Loans decreased but the proportion of total interest-earning assets that were Private Education Loans is higher in the current period than the year-ago period.

• Provision for credit losses in 2025 was $333 million, compared with $409 million in the year-ago period.

During 2024, the increase in the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in recovery rates.

These drivers were offset by $236 million in negative provisions resulting from the approximately $3.69 billion Private Education Loan sales during 2024, an improved economic outlook, and changes in management overlays.

In the year-ago period, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $205 million in negative provisions recorded as a result of the approximately $3.15 billion in Private Education Loan sales during 2023 and an increase in recovery rates (as the result of a 2023 change in our defaulted loan recovery process).

During 2025, the decrease in the provision for credit losses was primarily due to $297 million in negative provisions resulting from the $4.95 billion in Private Education Loan sales during 2025 and the $44 million in the reversal of provision in fourth quarter of 2025 due to the transfer of loans held for sale.

These drivers were offset by new loan commitments, net of expired commitments, and changes in the economic outlook.

In the year-ago period, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in recovery rates, offset by $236 million in negative provisions resulting from the approximately $3.69 billion in Private Education Loan sales during 2024, an improved economic outlook, and changes in management overlays.

• Gains on sales of loans, net, were $369 million in 2025, compared with $255 million in the year-ago period.

The increase in gains on sales of loans was primarily the result of selling approximately $4.95 billion of Private Education Loans in 2025, compared with the sale of approximately $3.69 billion of Private Education Loans in the year-ago period.

Additionally, we received lower sales premiums in 2023 as compared to 2024 due to movement 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.

• Gains (losses) on securities, net, were less than $1 million in gains in 2024, compared with $3 million in gains in the year-ago period.

The decrease from the year-ago period was due to the change in mark-to-fair value of our trading investments.

• Gains (losses) on securities, net, were $10 million of losses in 2025, compared with less than $1 million in gains in the year-ago period.

The change year-over-year was primarily due to an impairment recorded in the first quarter of 2025 on certain non-marketable equity securities, and the change in mark-to-fair value of our trading investments.

• Other income was $123 million in 2025, compared with $113 million in the year-ago period.

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The increase in third-party servicing fees was primarily due to an additional approximately $4.95 billion of sold loans that we continue to service on behalf of the owners of the loans.

There was also a $3 million increase in early withdrawal penalty fee income in 2024 compared with the year-ago period, which was related to a health savings account provider that redeemed its deposits early and paid an early withdrawal penalty in the first quarter of 2024.

The increase in third-party servicing fees was offset by a $3 million decrease in early withdrawal penalty fee income compared to the year-ago period, which was related to a health savings account provider that redeemed its deposits early and paid an early withdrawal penalty in the first quarter of 2024.

• For the year ended December 31, 2025, total operating expenses were $656 million, compared with $637 million in the year-ago period.

The increase in total operating expenses was primarily driven by higher personnel costs, increased marketing costs, and higher FDIC assessment fees.

The increase in total operating expenses was primarily due to increased marketing spend and higher spending on information technology initiatives, offset by reduced FDIC fees and lower personnel costs.

• In 2025, we recorded $4 million in impairment and amortization of acquired intangible assets, compared with $5 million in the year-ago period.

The decrease is a result of the impairment write-down of the Nitro trade name intangible asset taken in the fourth quarter of 2023.

The decrease was a result of an increase in amortization recorded on our customer relationships in 2024 in accordance with the accelerated amortization method, and the impairment write-down of the Scholly partner relationships intangible asset in the fourth quarter of 2024 which resulted in no amortization on that intangible asset in the current period.

For additional information, see Notes to Consolidated Financial Statements, Note 9, “Goodwill and Acquired Intangible Assets” in this Form 10-K.

2024 Form 10-K — SLM CORPORATION 49

52 SLM CORPORATION — 2025 Form 10-K

• Income tax expense for the year ended December 31, 2025 was $248 million, compared with $190 million in the year-ago period.

The effective tax rate decreased in 2024 to 23.8 percent from 25.3 percent in the year-ago period.

The decrease in the effective rate for 2024 was primarily attributable to a decrease in state income taxes.

The effective tax rate increased in 2025 to 25.0 percent from 23.8 percent in the year-ago period.

The increase in the effective rate for 2025 was primarily attributable to an increase in state income taxes.

Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

For the year ended December 31, 2024, net income was $608 million, or $2.68 diluted earnings per common share, compared with net income of $581 million, or $2.41 diluted earnings per common share, for the year ended December 31, 2023.

The year-over-year increase was primarily attributable to less provisions for credit losses and an increase in total net interest income and other income, which were offset by decreases in gains on sales of loans, net, and higher operating expenses.

The primary contributors to each of the identified drivers of change in net income for 2024 compared with 2023 are as follows:

• Net interest income in 2023 increased by $73 million compared with 2022 primarily due to a $375 million increase in average Private Education Loans and FFELP Loans outstanding and a 19-basis point increase in our net interest margin.

Our net interest margin increased in 2023 from 2022 because of the dramatic increase in interest rates in 2023.

When interest rates rise, the yield on our interest-earning assets typically increases faster than our cost of funds.

As such, as rates increased in 2023, we saw our net interest margin increase.

• Net interest income in 2024 decreased by $82 million compared with 2023 primarily due to a 31-basis point decrease in our net interest margin and an $79 million decrease in average Private Education Loans and FFELP Loans outstanding.

Our net interest margin decreased in 2024 from 2023 primarily because our cost of funds increased more than the yields on our interest-earning assets.

As interest rates change, changes in the cost of our interest-bearing liabilities tend to lag compared to changes in the yields on our interest-earning assets.

In a rising interest rate environment, as we experienced in 2022 and the first part of 2023, our variable-rate interest earning assets repriced faster than our cost of funds.

As such, we saw an expansion in our net interest margin throughout most of 2023.

• Provision for credit losses in 2024 was $409 million, compared with $345 million in 2023.

During 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $205 million in negative provisions recorded as a result of the approximately $3.15 billion in Private Education Loan sales during 2023 and an increase in recovery rates (as the result of a change in our defaulted loan recovery process).

In 2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to approximately $3.34 billion in Private Education Loans sold in 2022 and the adoption of a new loss model that included a reduction in the long-term estimate of losses after the reasonable and supportable period.

Management overlays increased in 2022 due to several factors, including additional provisions for our expectation of higher future loan losses related to the previously announced credit administration practices changes we implemented in 2021, “gap year” loans, a shortage and lack of tenured collections staff, and other operational challenges we experienced in 2022.

During 2024, the increase in the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, and changes in recovery rates.

In 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $205 million in negative provisions recorded as a result of the approximately $3.15 billion in Private Education Loan sales during 2023 and an increase in recovery rates (as the result of a 2023 change in our defaulted loan recovery process).

• Gains on sales of loans, net, were $255 million in 2024, compared with $160 million in 2023.

The decrease in gains on sales of loans was primarily the result of selling approximately $3.15 billion of Private Education Loans in 2023, compared with the sale of approximately $3.34 billion of Private Education Loans in 2022, and lower sales premiums received in 2023 compared to 2022, which were attributable to higher interest rates in 2023.

The increase 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.

Additionally, we received lower sales premiums in 2023 as compared to 2024 due to movement 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.

• Gains (losses) on securities, net, were $3 million in gains in 2023, compared with a net loss of $60 million in 2022.

The gains on securities, net, in 2023 were related to the changes in mark-to-fair value of our trading investments.

During 2022, we determined that an investment in non-marketable equity securities was impaired.

As such, we wrote down the value by $60 million in 2022 based upon an estimate of the value of these securities.

• Gains (losses) on securities, net, were less than $1 million in gains in 2024, compared with $3 million in gains in 2023.

The decrease from 2023 was due to the change in mark-to-fair value of our trading investments.

• Other income was $113 million in 2024, compared with $84 million in 2023.

The increase in other income compared with 2022 was primarily the result of a $13 million increase in third-party servicing fees from 2022 and a $2 million increase in Private Education Loan late fees compared with 2022.

The increase in other income compared with 2023 was primarily the result of a $21 million increase in third-party servicing fees from 2023.

The increase in third-party servicing fees was primarily due to an additional approximately $3.7 billion of sold loans that we continue to service on behalf of the owners of the loans.

There was also a $3 million increase in early withdrawal penalty fee income in 2024 compared with 2023, which was related to a health savings account provider that redeemed its deposits early and paid an early withdrawal penalty in the first quarter of 2024.

• For the year ended December 31, 2024, total operating expenses were $637 million, compared with $619 million in 2023.

The increase in total operating expenses was primarily driven by higher personnel costs, initiative spending, and higher FDIC assessment fees, which were partially offset by lower Credit Card portfolio expenses as a result of the sale of the portfolio.

The increase in total operating expenses was primarily driven by higher personnel costs, increased marketing costs, and higher FDIC assessment fees.

• In 2024, we recorded $5 million in impairment and amortization of acquired intangible assets, compared with $66 million in 2023.

During the fourth quarter of 2023, we recorded an impairment of $56 million as a result of a write-down of the value of the Nitro trade name and trademarks intangible assets.

This write-down occurred because we planned to discontinue the use of the Nitro trade name and trademarks in 2024 and transition the related branding to the Sallie and Sallie Mae brands and platforms.

In 2023, we recorded $10 million in amortization expense of acquired intangible assets, compared to $8 million in 2022.

The increase in amortization expense was related to our acquisition of several key assets of Scholly in the third quarter of 2023.

For additional

The decrease is a result of the impairment write-down of the Nitro trade name intangible asset taken in the fourth quarter of 2023.

For additional information, see Notes to Consolidated Financial Statements, Note 9, “Goodwill and Acquired Intangible Assets” in this Form 10-K.

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information, see Notes to Consolidated Financial Statements, Note 8, “Goodwill and Acquired Intangible Assets” in this Form 10-K.

• Income tax expense for the year ended December 31, 2024 was $190 million, compared with $197 million in 2023.

The effective tax rate decreased in 2024 to 23.8 percent from 25.3 percent in 2023.

The decrease in the effective rate for 2023 was primarily attributable to an increase in tax credits utilized in the year.

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The decrease in the effective rate for 2024 was primarily attributable to a decrease in state income taxes.

Financial Condition

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(1) Includes the average balance of our unsecured borrowings, as well as secured borrowings and amortization expense of transaction costs related to our term asset-backed securitizations and our Secured Borrowing Facility.

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54 SLM CORPORATION — 2025 Form 10-K

Rate/Volume Analysis - GAAP

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Interest expense (12,833) (11,626) (1,207)

Net interest income (loss) $ (81,431) $ (90,630) $ 9,199

Net interest income $ 21,042 $ 15,652 $ 5,390

Interest income $ 26,743 $ 11,358 $ 15,385

Interest expense 108,174 108,440 (266)

Net interest income $ 73,432 $ 56,165 $ 17,267

Net interest income (loss) $ (81,431) $ (90,630) $ 9,199

(1) Changes in income and expense due to both rate and volume have been allocated in proportion to the relationship of the absolute dollar amounts of the change in each.

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Ending Loans Held for Investment Balances, net

As of December 31, 2024

(dollars in thousands) Total Loans

Investment (Private Education Loans)

Total loan portfolio:

In-school (1)

Repayment and other (2)

Total, gross 22,235,008

Deferred origination costs and unamortized premium/(discount) 103,070

Allowance for loan losses (1,435,920)

Total loans held for investment portfolio, net $ 20,902,158

% of total 100 %

(1) Loans for customers still attending school and who are not yet required to make payments on the loans.

(2) Includes loans in deferment or forbearance.

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

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Private Education Loans

As of December 31,

(dollars in thousands) Private

Loans Total Loans

(dollars in thousands) 2025 2024

Total loan portfolio:

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Deferred origination costs and unamortized premium/(discount) 102,008 103,070

Allowance for loan losses (1,335,105) (4,667) (1,339,772)

Allowance for credit losses (1,430,318) (1,435,920)

Total loans held for investment portfolio, net $ 20,332,124 $ 20,902,158

% of total 97 % 3 % 100 %

(1) Loans for customers still attending school and who are not yet required to make payments on the loans.

(2) Includes loans in deferment or forbearance.

2025 Form 10-K — SLM CORPORATION 55

As of December 31, 2023

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(2) Includes loans in deferment or forbearance.

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As of December 31, 2022

(dollars in thousands) Private

Cards Total Loans Held for Investment

Loans Total Loans Held for Investment

Total loan portfolio:

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(2) Includes loans in deferment or forbearance.

56 SLM CORPORATION — 2025 Form 10-K

As of December 31, 2021

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(1) Loans for customers still attending school and who are not yet required to make payments on the loans.

At December 31, 2020, the loans in the “in-school” category include $254 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the COVID-19 pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were then not required to make any payments.

(2) At December 31, 2020, the loans in the “grace, repayment and other” category include (a) $147 million of Private Education Loans whose borrowers were in a grace or deferred status and who did not return to school in the fall of 2020, who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments, and (b) $639 million of Private Education Loans whose borrowers were in a forbearance or repayment status and who did not return to school in the fall of 2020 and who then received an extension of time from us to re-enroll before beginning their grace period.

(2) Includes loans in deferment or forbearance.

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Average Loans Held for Investment Balances (net of unamortized premium/discount)

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Year Ended December 31, 2025

(dollars in thousands) Private

Loans Total Loans

Held for Investment, net

(dollars in thousands) Total Loans

Investment (Private Education Loans), net

Beginning balance $ 20,902,158

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Capitalized interest and deferred origination cost premium amortization 676,532

(3,430,920) — (3,430,920)

Loan consolidations to third parties (976,282)

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Ending balance $ 20,332,124

2025 Form 10-K — SLM CORPORATION 57

Year Ended December 31, 2024

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Allowance (100,815) 4,667 (96,148)

Transfer to loans held for sale — (466,168) (466,168)

Repayments and other (2,198,547) (43,892) (2,242,439)

Ending balance $ 20,902,158 $ — $ 20,902,158

2024 Form 10-K — SLM CORPORATION 56

Year Ended December 31, 2023

(dollars in thousands) Private

Cards Total Loans

Loans Total Loans

Investment, net

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Allowance 18,526 (1,223) 17,303

Transfer to loans held-for-sale — — (28,905) (28,905)

Repayments and other (2,375,342) (61,597) (2,436,939)

Ending balance $ 19,772,293 $ 534,064 $ 20,306,357

“Loan consolidations to third parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in full principal and interest repayment status.

The amount of loans in full principal and interest repayment status in our Private Education Loans held for investment portfolio at December 31, 2024 increased by 3.7 percent compared with December 31, 2023, and now totals 42 percent of our Private Education Loans held for investment portfolio at December 31, 2024.

The balance of loans held for investment in full principal and interest repayment status was affected in 2024 and 2023 by loan sales.

“Loan consolidations to third parties” for the year ended December 31, 2024 total 9.1 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at December 31, 2024, or 3.9 percent of our total Private Education Loans held for investment portfolio at December 31, 2024, compared with the year-ago period of 11.5 percent of our Private Education Loan held for investment portfolio in full principal and interest repayment status, or 4.9 percent of our total Private Education Loans held for investment portfolio, respectively.

While interest rates began to decrease towards the end of 2024, increased interest rates for most of the year led to a decrease in consolidations compared to 2023.

“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 GRP 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 December 31, 2025 decreased by 0.1 percent compared with December 31, 2024, and now totals 45 percent of our Private Education Loans held for investment portfolio at December 31, 2025.

The balance of loans held for investment in P&I repayment status was affected in 2025 and 2024 by loan sales.

“Loan consolidations to third parties” for the year ended December 31, 2025 total 10.6 percent of our Private Education Loans held for investment portfolio in P&I repayment status at December 31, 2025, or 4.8 percent of our total Private Education Loans held for investment portfolio at December 31, 2025, compared with the year-ago period of 8.7 percent of our Private Education Loan held for investment portfolio in P&I repayment status, or 3.9 percent of our total Private Education Loans held for investment portfolio, respectively.

The increase in consolidations compared to the year-ago period is primarily attributable to lower interest rates in 2025.

Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.

The “Repayments and other” category includes all scheduled repayments, as well as voluntary prepayments, made on loans in repayment (including loans in full principal and interest repayment status) and also includes charge-offs.

58 SLM CORPORATION — 2025 Form 10-K

The “Repayments and other” category includes all scheduled repayments, as well as voluntary prepayments, made on loans in repayment and also includes charge-offs.

Consequently, this category can be significantly affected by the volume of loans in repayment.

2024 Form 10-K — SLM CORPORATION 57

Private Education Loan Originations

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Parent Loan (3)

— — 38 — 30,515 1

Total Private Education Loan originations $ 7,416,323 100 % $ 7,013,323 100 % $ 6,383,330 100 %

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For the year ended December 31, 2024, the Graduate Loan originations include $32.2 million of Smart Option Loans where the student was in a graduate status.

For the year ended December 31, 2022, the Graduate Loan originations include $1.8 million of Parent Loans and $29.1 million of Smart Option Loans where the student was in a graduate status.

For the year ended December 31, 2023, the Graduate Loan originations include $29.4 million of Smart Option Loans where the student was in a graduate status.

(3) In December 2021, we discontinued offering our Parent Loan product.

13 unchanged sentences

(dollars in thousands) 2025 2024

Portfolio Private

Total Portfolio (Private

Loans) Private

Beginning balance $ 1,435,920 $ 1,335,105 $ 4,667 $ 1,339,772

8 unchanged sentences

Loan sale reduction to provision (296,524) (235,955) — (235,955)

Loans transferred to held for sale (44,274) — — —

Total provisions for loan losses (3)

2 unchanged sentences

Years Ended December 31, (dollars in thousands) Private

Loans Credit Cards Total

Portfolio Private

8 unchanged sentences

Loan sale reduction to provision (205,383) — (205,383) (174,231) — — (174,231)

Loans transferred (to) from held-for-sale — — (2,372) (2,372) 1,887 — — 1,887

Loans transferred to held for sale — — — — — (2,372) (2,372)

Total provisions for loan losses (3)

4 unchanged sentences

(3) See “ — Financial Condition — Allowance for Credit Losses — Provision for Credit Losses” in this Item 7 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

2024 Form 10-K — SLM CORPORATION 59

60 SLM CORPORATION — 2025 Form 10-K

Year Ended December 31,

(dollars in thousands) Private

Loans Personal Loans Credit

Beginning balance $ 1,355,844 $ 4,378 $ 1,501 $ 1,361,723

Day 1 adjustment for adoption of CECL 1,060,830 2,852 79,183 188 1,143,053

Balance at January 1 1,435,130 4,485 145,060 290 1,584,965

Transfer from unfunded commitment liability (1)

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(229,591) (321) (356) (230,268)

Loan sales (2)

— — (108,534) — (108,534)

Recoveries 29,494 — 12 29,506

2 unchanged sentences

Loan sale reduction to provision (66,460) — — (66,460)

Loans transferred (to) from held-for-sale (205,669) — — — (205,669)

Loans transferred from held for sale 1,887 — — 1,887

Total provisions for loan losses (2)

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(1) See Notes to Consolidated Financial Statements, Note 7, “Allowance for Credit Losses and Unfunded Loan Commitments,” in this Form 10-K for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2) Represents fair value adjustments on loans sold.

(2) See “ — Financial Condition — Allowance for Credit Losses — Provision for Credit Losses” in this Item 7 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

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Other impacts to the provisions for credit losses:

Personal Loans — — — — (2,431)

FFELP Loans — 4,010 2,224 (20) 20

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In establishing the allowance for Private Education Loan losses as of December 31, 2025, 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 full principal and interest repayment status were 42 percent of our total Private Education Loans held for investment portfolio at December 31, 2024, compared with 43 percent at December 31, 2023.

For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “— Critical Accounting Policies and Estimates — Allowance for Credit Losses” in this Item 7 and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools — Private Education Loans” in this Form 10-K.

2024 Form 10-K — SLM CORPORATION 61

Private Education Loans held for investment in P&I repayment status were 45 percent of our total Private Education Loans held for investment portfolio at December 31, 2025, compared with 44 percent at December 31, 2024.

For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “— Critical Accounting Estimates — Allowance for Credit Losses” in this Item 7 and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools — Private Education Loans” in this Form 10-K.

62 SLM CORPORATION — 2025 Form 10-K

The table below presents our Private Education Loans held for investment portfolio delinquency trends.

Loans in repayment include loans 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 table, do not include those loans while they are in forbearance).

Private Education Loans Held for Investment 2025 2024 2023

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(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, consistent with established loan program servicing policies and procedures.

(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.

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See “—Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” in this Item 7 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) numerator to (b) Private Education Loans in repayment and forbearance denominator.

(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) were approximately $152 million, $156 million, and $165 million at December 31, 2024, 2023, and 2022, respectively.

Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) were approximately $161 million, $152 million, and $156 million at December 31, 2025, 2024, and 2023, respectively.

See “—Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” in this Item 7 for additional details.

Delinquencies as a percentage of Private Education Loans (held for investment) in repayment decreased to 3.7 percent at December 31, 2024 from 3.9 percent at December 31, 2023.

The decrease in the delinquency metric in 2024 compared with 2023 was primarily attributable to the new loan modification programs.

See “—Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” in this

Delinquencies as a percentage of loans in repayment increased to 4.0 percent at December 31, 2025 from 3.7 percent at December 31, 2024.

The increase in the delinquency metric in 2025 compared with 2024 is primarily attributable to changes and refinements to our loss mitigation programs in late 2024 which generally restricted loan modification eligibility to borrowers in later-stage delinquency, as well as a shift in the composition of the loans in repayment portfolio (which does not include loans held for sale) due to $933 million of newly originated loans transferred

2025 Form 10-K — SLM CORPORATION 63

Item 7 for additional details.

The percentage of loans in an extended grace forbearance increased to 1.6 percent at December 31, 2024 from 1.1 percent at December 31, 2023.

The increase was primarily due to borrowers being eligible to receive up to six months of extended grace forbearance in one increment instead of multiple instances of two-month increments, coupled with our continued efforts to better match our available program offerings to the financial needs of our borrowers.

to held for sale status during the fourth quarter of 2025, as we intended to sell the loans to the Strategic Partner in January 2026.

See “—Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” in this Item 7 for additional details.

The percentage of loans in an extended grace forbearance remained relatively consistent at 1.7 percent and 1.6 percent at December 31, 2025 and December 31, 2024, respectively.

The percentage of loans in hardship and other forbearances remained relatively consistent at 1.0 percent and 0.9 percent, respectively, at December 31, 2025 and December 31, 2024.

The increase in delinquencies at December 31, 2023, compared with 2022, was primarily attributable to loan modification programs initiated in the fourth quarter of 2023 that required borrowers to remain in their respective delinquency buckets until three consecutive payments were made under the modified loan terms before being brought current (if re-age eligible).

The increase in the percentage of loans in an extended grace period at December 31, 2023 compared with 2022 was primarily due to borrowers being eligible to receive up to six months of extended grace forbearance in one increment instead of multiple instances of two-month increments, beginning in September 2023.

The decrease in delinquencies at December 31, 2024, compared with 2023, was primarily attributable to the then-new loan modification programs.

The increase in the percentage of loans in an extended grace period at December 31, 2024 compared with 2023 was primarily due to borrowers being eligible to receive up to six months of extended grace forbearance in one increment instead of multiple instances of two-month increments, coupled with our continued efforts to better match our available program offerings to the financial needs of our borrowers.

The percentage of loans in hardship and other forbearances remained relatively consistent at 0.9 percent and 1.0 percent, respectively at December 31, 2024 and December 31, 2023.

2024 Form 10-K — SLM CORPORATION 63

64 SLM CORPORATION — 2025 Form 10-K

The following table summarizes changes in the allowance for Private Education Loan (held for investment) losses and the allowance for unfunded loan commitments.

2 unchanged sentences

Allowance for loan losses, beginning balance $ 1,435,920 $ 1,335,105 $ 1,353,631 $ 1,158,977 $ 1,355,844

Day 1 adjustment for adoption of CECL — — — — 1,060,830

Balance at January 1 1,335,105 1,353,631 1,158,977 1,355,844 1,435,130

Transfer from allowance for unfunded loan commitments (1)

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84,568 112,962 124,924 72,713 110,044

Day 1 adjustment for adoption of CECL — — — — 115,758

Balance at January 1 112,962 124,924 72,713 110,044 118,239

Provision (2)(3)

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Total allowance for credit losses, ending balance $ 1,507,450 $ 1,520,488 $ 1,448,067 $ 1,478,555 $ 1,231,690

Total allowance for credit losses as a percentage of the ending total loan balance, plus unfunded loan commitments and total accrued interest receivable 5.83 % 5.89 % 6.30 % 5.20 % 6.49 %

Total Allowance Percentage of Private Education Loan Exposure (5)(6)

6.00 % 5.83 % 5.89 % 6.30 % 5.20 %

Allowance for loan losses coverage of net charge-offs 4.14 4.32 3.57 3.51 5.79

10 unchanged sentences

$ 15,894,827 $ 16,106,751 $ 15,409,814 $ 15,129,550 $ 15,511,212

Unfunded loan commitments $ 2,311,660 $ 2,221,077 $ 1,995,808 $ 1,776,976 $ 1,673,018

Unfunded loan commitments for loans held for investment (6)

$ 1,913,753 $ 2,311,660 $ 2,221,077 $ 1,995,808 $ 1,776,976

Total accrued interest receivable $ 1,570,069 $ 1,549,415 $ 1,354,565 $ 1,177,562 $ 1,187,123

4 unchanged sentences

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

(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 $523 million of unfunded loan commitments associated with loans classified as held for sale at December 31, 2025.

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.

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;

The most significant of these metrics considered are the allowance coverage of net charge-offs ratio;

the Total Allowance as Percentage of Private Education Loan Exposure;

and delinquency and forbearance percentages.

2025 Form 10-K — SLM CORPORATION 65

Charge-offs decreased in the year ended December 31, 2024 compared with the year-ago period primarily due to the new loan modification programs implemented throughout the full year 2024.

Charge-offs decreased in the year ended December 31, 2023 compared with the year ended December 31, 2022 because of a combination of factors, including improved staffing levels and the impact of the new loan modification programs begun in the fourth quarter of 2023.

In the fourth quarter of 2022, we charged off $13 million of delinquent loans that had received certain grants of forbearance under previous credit administration practices (which have been discontinued) and which were classified as a loss and charged off prior to their reaching 120 days delinquent.

Net charge-offs as a percentage of average loans in repayment decreased in the year ended December 31, 2025 compared with the year-ago period primarily due to changes in the loan modification programs implemented in late 2024.

Net charge-offs as a percentage of average loans in repayment decreased in the year ended December 31, 2024 compared with the year ended December 31, 2023 primarily due to the expanded loan modifications program implemented in late 2023 and throughout the full year 2024.

During 2026, the first wave of loans that were modified under the expanded loss mitigation programs in late 2023 will be exiting existing modifications.

Borrowers currently enrolled in these programs have largely exhibited positive payment performance, and longer-term performance is unknown but will become clearer throughout 2026.

Use of Forbearance and Modifications as a Private Education Loan Collection Tool

Over the course of the last few years, we have made significant changes to our credit administration practices, enhancing our loss mitigation programs through both our forbearance and loan modification offerings.

We adjust the terms of loans for certain borrowers when we believe such changes will help our borrowers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans.

In recent years, we have made significant changes to our credit administration practices, enhancing our loss mitigation programs through both our forbearance and loan modification offerings.

We adjust the terms of loans for certain borrowers when we believe such changes will help our borrowers manage their student loan obligations, achieve better student outcomes and increase the collectability of the loans.

These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment or interest-only alternative.

We continually monitor our credit administration practices and modify them from time to time based upon performance, industry conventions, and/or regulatory feedback.

Forbearance allows a borrower to not make scheduled payments for a specified period of time.

5 unchanged sentences

During the first six months following a borrower’s grace period, the borrower may be eligible for extended grace forbearance, which provides temporary payment relief to give the borrower additional time to be in a position to make regular principal and interest payments.

We do not consider borrowers who are eligible for extended grace to be experiencing financial difficulty.

Hardship forbearance may be granted in order to provide temporary payment relief to borrowers who are either current in their payments but demonstrate a need for relief, or who are delinquent in their payments but demonstrate an ability and willingness to repay their obligation.

4 unchanged sentences

Disaster forbearance is used to assist borrowers affected by material events, typically federally-declared disasters, including hurricanes, wildfires, floods, and pandemics.

We typically grant disaster forbearance to affected borrowers in increments of up to three months at a time, but the disaster forbearance granted generally does not apply toward the 12-month forbearance limit described below.

Currently, we generally grant forbearance in increments of one to two months at a time, for up to 12 months over the life of the loan, although extended grace forbearance is typically granted in one six-month increment and disaster forbearance and certain other limited instances do not apply toward the 12-month limit.

We typically grant disaster forbearance to affected borrowers in one-month increments, up to three months at a time, but the disaster forbearance granted generally does not apply toward the 12-month forbearance limit described below.

Disaster forbearance is granted based on areas impacted by federally declared disasters, not because the borrower is experiencing financial difficulty.

Loans in disaster forbearance are not assessed late or other fees.

Due to the nature and limited timeframe of disaster forbearance, delinquent loans granted disaster forbearance are maintained in their pre-grant delinquency status, and as such, are not reflected in our loans in forbearance metrics.

We offer certain other administrative forbearances (e.g., death and disability, bankruptcy, military service, 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.

We do not consider borrowers eligible for these other administrative forbearances to be experiencing financial difficulty.

66 SLM CORPORATION — 2025 Form 10-K

Currently, we generally grant forbearance for up to 12 months over the life of the loan, in increments of one to two months at a time, although extended grace forbearance is typically granted in one six-month increment.

Disaster forbearance and certain other limited instances do not apply toward the 12-month limit.

We also currently require 12 months of positive payment performance by a borrower (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives.

This required period of positive payment performance does not apply, however, to extended grace forbearances and is not required for a borrower to receive a contractual interest rate reduction.

This required period of positive payment performance is not necessary to receive additional increments of extended grace forbearance or for a borrower to receive a contractual interest rate reduction.

In addition, we currently limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years.

We also now count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.

Modification Programs other than Forbearances

For borrowers experiencing more severe hardship, following evaluation of their ability and willingness to repay, we currently use modification programs tailored to the financial condition of the individual borrower.

Pursuant to our modification programs, we may reduce the contractual interest rate on a loan to a rate between 2 percent and 8 percent

2024 Form 10-K — SLM CORPORATION 65

for a temporary period of two to four years, and in some instances may also permanently extend the final maturity of the loan.

Pursuant to our modification programs, we may reduce the contractual interest rate on a loan to a rate between 2 percent and 8 percent temporarily, and/or in some instances may permanently extend the final maturity of a loan.

For borrowers experiencing the most severe financial conditions, we may permanently reduce the contractual interest rate on a loan to 2 percent for the remaining life of the loan and also permanently extend the final maturity of the loan.

1 unchanged sentence

We currently limit the granting of a permanent extension of the final maturity date of a loan to once over the life of the loan, and the number of interest rate reductions to twice over the life of the loan.

We continually monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback.

Modifications under these programs are generally considered loan modifications to borrowers experiencing financial difficulty.

See Note 7, “Allowance for Credit Losses and Unfunded Commitments — Loan Modifications to Borrowers Experiencing Financial Difficulty” in this Form 10-K for disclosures related to these modification programs.

However, in some situations, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities, which we do not consider to be modifications of loans to borrowers experiencing financial difficulty.

Delinquency Trends by Active Repayment Status

2 unchanged sentences

Our experience shows that the percentage of loans in forbearance status generally decreases the longer the loans have been in active repayment status.

At December 31, 2024, for Private Education Loans (held for investment) that have been in active repayment status for fewer than 25 months, loans in forbearance status as a percentage of loans in repayment and forbearance were 1.9 percent.

Approximately 77 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status fewer than 25 months.

At December 31, 2025, 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 2.0 percent.

At December 31, 2025, approximately 76 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status fewer than 25 months.

2025 Form 10-K — SLM CORPORATION 67

As of December 31, 2025

14 unchanged sentences

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 1.63 % 0.39 % 0.23 % 0.17 % 0.23 % — % 2.65 %

2024 Form 10-K — SLM CORPORATION 66

As of December 31, 2024

14 unchanged sentences

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 1.50 % 0.40 % 0.23 % 0.14 % 0.19 % — % 2.46 %

68 SLM CORPORATION — 2025 Form 10-K

As of December 31, 2023

32 unchanged sentences

Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in September 2023.

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

Accrued Interest Receivable

16 unchanged sentences

(1) The allowance for uncollectible interest at December 31, 2025, 2024, 2023, 2022, and 2021 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2025, 2024, 2023, 2022, and 2021, relates to $164 million, $164 million, $151 million, $240 million, and $240 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 billion, $1.2 billion, $937 million, $947 million, and $973 million, respectively, at December 31, 2024, 2023, 2022, 2021, and 2020) is/was reserved for in the allowance for credit losses.

2024 Form 10-K — SLM CORPORATION 68

The accrued interest receivable that is/was expected to be capitalized ($1.4 billion, $1.4 billion, $1.2 billion, $937 million, and $947 million, respectively, at December 31, 2025, 2024, 2023.

2022, and 2021) is/was reserved for in the allowance for credit losses.

70 SLM CORPORATION — 2025 Form 10-K

Liquidity and Capital Resources

Funding and Liquidity Risk Management

Our primary liquidity needs include our ongoing ability to fund our businesses throughout market cycles, including during periods of financial stress, our ongoing ability to fund originations of Private Education Loans, and our ability to meet any outflows of our Bank deposits.

To achieve these objectives, we analyze and monitor our liquidity needs, and maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt primarily through asset-backed securitizations, other financing facilities, and loan sales.

Our 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 diverse 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 $5.4 billion and $6.1 billion as of December 31, 2025 and 2024, respectively, as noted in the table below.

At December 31, 2025 and December 31, 2024, our sources of liquidity included liquid investments with unrealized losses of $61.2 million and $105.8 million, respectively.

It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire emergency conditions.

It is our policy to manage operations so our liquidity needs are fully satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire conditions.

Our liquidity management is governed by policies approved by our Board of Directors.

1 unchanged sentence

These policies take into account 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 the markets for bank deposits at reasonable rates.

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 marketplace.

We target maintaining sufficient on-balance sheet and contingent sources of liquidity to enable us to meet all contractual and contingent obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test the resiliency of our balance sheet.

We hold a significant liquidity buffer of cash and securities, which we expect to maintain through 2025.

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 December 31, 2025, we held a significant liquidity buffer of cash and liquid investments, which we expect to maintain through in the future.

Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.

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(1) Includes the effect of interest rate swaps in effective hedge relationships.

As of December 31, 2024 and 2023, there were $567 million and $478 million, respectively, of deposits exceeding FDIC insurance limits.

As of December 31, 2025 and 2024, there were $1.2 billion and $1.2 billion, respectively, of deposits exceeding FDIC insurance limits.

Accrued interest on deposits was $71 million and $92 million at December 31, 2025 and 2024, respectively.

2024 Form 10-K — SLM CORPORATION 70

72 SLM CORPORATION — 2025 Form 10-K

Counterparty Exposure

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As of December 31, 2025

(dollars in thousands) SLM Corporation

(dollars in thousands)

SLM Corporation

and Sallie Mae Bank

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The proposed rule therefore would not affect the Bank's capital requirements or the calculation of its capital ratios.

It is uncertain if and when a final rule will be adopted, and if so, whether and to what extent it will differ from the proposed rule.

Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology.

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Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022.

On each of January 1, 2022, 2023, and 2024, 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes.

On January 1, 2025, the remaining 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes, with the phased-in amounts included in regulatory capital at the beginning of the year.

The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million.

2024 Form 10-K — SLM CORPORATION 72

transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.

At December 31, 2024, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:

Transition Amounts Phase-In

Amounts for the Year Ended Phase-In

Amounts for the Year Ended Remaining Adjusted Transition Amounts to be Phased-In

(Dollars in thousands) December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2024

Retained earnings $ 836,351 $ (209,088) $ (209,088) $ (209,088) $ 209,087

Allowance for credit losses 1,038,145 (259,536) (259,536) (259,536) 259,537

Liability for unfunded commitments 104,377 (26,094) (26,094) (26,095) 26,094

Deferred tax asset 306,171 (76,542) (76,542) (76,543) 76,544

On each of January 1, 2022, 2023, 2024 and 2025, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes.

As of January 1, 2025, all adjusted transition amounts have been phased in for regulatory capital purposes.

74 SLM CORPORATION — 2025 Form 10-K

earnings by $953 million.

This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.

The Bank’s required and actual regulatory capital amounts and ratios, including applicable capital conservation buffers, under U.S.

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The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale investments and swap valuations from Common Equity Tier 1 Capital.

At December 31, 2024 and December 31, 2023, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $83 million and $115 million, net of tax of $27 million and $37 million, respectively.

The capital ratios would remain above the well capitalized thresholds, including applicable capital conservation buffers, if the unrealized loss became fully recognized into capital.

Minimum Requirements Plus Buffer (1)(2)

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(2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework.

(3) For December 31, 2024 and 2023, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed above that were phased in at the beginning of 2024 and 2023.

(3) For December 31, 2025 and 2024, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed above.

2025 Form 10-K — SLM CORPORATION 75

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The issuing entities for those secured borrowings are variable interest entities and are consolidated for accounting purposes.

The following table summarizes our secured borrowings at December 31, 2024 and 2023.

The following table summarizes our borrowings at December 31, 2025 and 2024.

For additional information, see Notes to Consolidated Financial Statements, Note 11, “Borrowings” in this Form 10-K.

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Short-term Borrowings

Secured Financings

On June 14, 2024, we amended our $2 billion maximum financing Secured Borrowing Facility to extend the maturity.

We hold 100 percent of the residual interest in the Secured Borrowing Facility trust.

The amendment extended the revolving period, during which we may borrow, repay, and reborrow funds, until June 13, 2025.

The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on June 13, 2026 (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;

however, we classify advances under our Secured Borrowing Facility as short-term borrowings because it is our intention to repay those advances within one year.

For the years ended December 31, 2024 and 2023, there were no outstanding short-term borrowings under the Secured Borrowing Facility.

For additional information, see Notes to Consolidated Financial Statements, Note 10, “Borrowings” in this Form 10-K.

2024 Form 10-K — SLM CORPORATION 74

Long-term Borrowings

Unsecured Financing Transactions

On October 29, 2020, we issued at par $500 million of 4.20 percent unsecured Senior Notes due October 29, 2025.

This unsecured borrowing remained classified as long-term as of December 31, 2024 in accordance with our ability and intent to refinance the debt on a long-term basis.

At December 31, 2024, the outstanding balance was $499 million.

On February 18, 2025, we redeemed these Senior Notes.

See Notes to Consolidated Financial Statements, Note 23, “Subsequent Events” in this Form 10-K for additional information.

Unsecured Borrowings Transactions

On November 1, 2021, we issued $500 million of 3.125 percent unsecured Senior Notes due November 2, 2026, at a price of 99.43 percent.

At December 31, 2024, the outstanding balance was $496 million.

On January 31, 2025, we issued $500 million of 6.50 percent unsecured Senior Notes due January 31, 2030.

For additional information, see Notes to Consolidated Financial Statements, Note 23, “Subsequent Events” in this Form 10-K.

Secured Financing Transactions

At December 31, 2025, the outstanding carrying value, net of deferred financing fees, was $498 million.

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, at a price of 99.78 percent.

At December 31, 2025, the outstanding carrying value, net of deferred financing fees, was $493 million.

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Secured Borrowings Transactions

The following summarizes those Private Education Loan Trust term ABS issued in 2024 and 2025 in which we retained 100 percent of the residual class certificates.

SMB Private Education Loan Trust Date Closed Loans Transferred to the Trust (1)

Notes Issued Gross

Proceeds Weighted Average

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Weighted Average Life

(in years) of Class A and Class B Notes

of Class A and Class B Notes

(Dollars in thousands)

2023-A ABS Transaction March 15, 2023 $ 644,573 $ 579,000 $ 571,910 SOFR plus 1.53%

2023-C ABS Transaction August 16, 2023 647,934 568,000 567,881 SOFR plus 1.69%

Total 2023 $ 1,292,507 $ 1,147,000 $ 1,139,791

2024-C ABS Transaction May 15, 2024 $ 733,644 $ 668,000 $ 667,888 SOFR plus 1.19%

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Total 2024 $ 2,410,734 $ 2,216,000 $ 2,215,612

(1) The transfer of such loans did not qualify for sale treatment and thus remain on our consolidated balance sheet.

At December 31, 2024, the following Private Education Loan amounts remain encumbered related to these transactions:

SMB Private Education Loan Trust Loan Principal Capitalized

Interest Total Loans

(Dollars in thousands)

2023-A ABS Transaction $ 484,551 $ 32,856 $ 517,407

2023-C ABS Transaction 516,507 35,287 551,794

Total 2023 $ 1,001,058 $ 68,143 $ 1,069,201

2024-C ABS Transaction $ 646,550 52,968 $ 699,518

2024-E ABS Transaction 841,355 69,238 910,593

2024-F ABS Transaction 662,361 55,131 717,492

Loans encumbered at December 31, 2025 related to 2024 term ABS $ 2,080,180

2025-A ABS Transaction May 07, 2025 $ 576,908 $ 539,000 $ 538,889 SOFR plus 1.49%

Total 2025 $ 576,908 $ 539,000 $ 538,889

Loans encumbered at December 31, 2025 related to 2025 term ABS:

(1) Represents principal and capitalized interest.

(2) Represents SOFR equivalent cost of funds for variable and fixed-rate bonds, excluding issuance costs.

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Pre-2024 Transactions

Prior to 2023, we executed a total of $10.38 billion in ABS transactions that were accounted for as secured financings.

Prior to 2024, we executed a total of $11.53 billion in ABS transactions that were accounted for as secured borrowings.

At December 31, 2025, $3.93 billion of our Private Education Loans, including $3.81 billion of principal and $116 million in capitalized interest, were encumbered as a result of these transactions.

Secured Borrowing Facility

On June 13, 2025, we amended our Secured Borrowing Facility to increase the amount that may 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, during which we may borrow, repay, and reborrow funds, until June 12, 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.

For the years ended December 31, 2025 and 2024, there were no outstanding borrowings under the Secured Borrowing Facility.

For additional information, see Notes to Consolidated Financial Statements, Note 11, “Borrowings” in this Form 10-K.

Other Borrowing Sources

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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.

Generally, collateral value is assigned based on the estimated fair value

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of the pledged assets.

At December 31, 2025 and December 31, 2024, the value of our pledged collateral at the FRB was $2.5 billion and $2.2 billion, respectively.

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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.

At December 31, 2024, we had $2.3 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2024/2025 academic year.

At December 31, 2024, we had an $85 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on the unfunded commitments.

At December 31, 2025, we had $2.4 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2025/2026 academic year, including $523 million of contractual loan commitments associated with loans classified as held for sale.

At December 31, 2025, we had a $77 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on unfunded commitments.

Contractual Cash Obligations

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At December 31, 2025, our contractual cash obligations due in the next year for secured borrowings, unsecured debt, and lease obligations were $782 million, $500 million, and $7 million, respectively, and our contractual cash obligations due thereafter for our secured borrowings, unsecured debt, and lease obligations were $4.1 billion, $500 million, and $20 million, respectively.

Our shareholders have authorized the issuance of 1.125 billion shares of common stock (par value of $0.20).

Our governing documents permit the issuance of up to 1.125 billion shares of common stock (par value of $0.20).

At December 31, 2025, 199 million shares were issued and outstanding and 31 million shares were unissued but encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend equivalent units for employee compensation and remaining authority for stock-based compensation plans.

See Notes to Consolidated Financial Statements, Note 13, “Stockholders’ Equity” in this Form 10-K for additional details.

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Critical Accounting Policies and Estimates

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Critical Accounting Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with GAAP.

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On a quarterly basis, management evaluates its estimates, particularly those that include the most difficult, subjective, or complex judgments and are often about matters that are inherently uncertain.

The most significant judgments, estimates, and assumptions relate to the following critical accounting policies that are discussed in more detail below.

The most significant judgments, estimates, and assumptions relate to the following critical accounting estimates that are discussed in more detail below.

Allowance for Credit Losses

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This weighting of expectations is used in calculating our current expected credit losses recorded each period.

We obtain forecasts for these inputs from Moody’s Analytics.

Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurrence.

We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs.

At December 31, 2024, December 31, 2023, and December 31, 2022, we used the Baseline (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario - 10 percent likelihood of occurring)/S3 (unfavorable (or downside) scenario - 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively.

Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.

In estimating recoveries, we use both estimates of what we expect to receive from the sale of defaulted loans as well as historical borrower payment behavior to estimate the timing and amount of future recoveries on charged-off loans.

We obtain forecasts for our expected loss model from an external economic data provider who provides a range of economic forecasts with various likelihoods of occurrence.

Management reviews and weighs the economic forecasts for each of these inputs to calculate our allowance for credit losses.

Our forecasting process reflects management’s continuous review of forecasting assumptions and model inputs and is consistent with our internal governance, risk management framework and CECL methodologies.

Management continues to review both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.

The most recent adjustment to scenario weightings occurred in the first quarter of 2025.

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In addition to the above modeling approach, we also take certain other qualitative factors into consideration when calculating the allowance for credit losses, which could result in management overlays (increases or decreases to the allowance for credit losses).

These management overlays can encompass a broad array of factors not captured by model inputs, including, but not limited to, changes in lending policies and procedures, including changes in underwriting standards, changes in servicing policies and collection administration practices, including the loan modification program changes implemented in the fourth quarter of 2023, state law changes that could impact servicing and collection practices, charge-offs, recoveries not already included in the analysis, the effect of other external factors such as legal and regulatory requirements on the level of estimated current expected credit losses, the performance of the model over time versus actual losses, and any other operational or regulatory changes that could affect our estimate of future losses.

These management overlays can encompass a broad array of factors not captured by model inputs, including, but not limited to, changes in lending policies and procedures, including changes in underwriting standards, changes in servicing policies and collection administration practices, including changes we have implemented to our loan modification programs, state law changes that could impact servicing and collection practices, charge-offs, recoveries not already included in the analysis, the effect of other external factors such as shifts in the macroeconomic environment or legal and regulatory requirements that impact the level of estimated current expected credit losses or prepayments, the performance of the model over time versus actual losses, and any other operational or regulatory changes that could materially affect our estimate of future losses.

The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes.

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Of the model inputs outlined above, economic forecasts, weighting of economic forecasts, and recovery rates are subject to estimation uncertainty, and changes in these inputs could have a material impact to our allowance for credit losses and the related provision for credit losses.

In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, retail sales, and median family income in determining the adequacy of the allowance for credit losses.

Prior to this change, we included forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models.

In 2023, we experienced slower prepayment rates due to the rising interest rate environment.

Historically, when rates rise, loan prepayments decline due to a reduction in consolidation activity of our borrowers to third party lenders, and when rates decline, loan prepayments rise due to an increase in consolidation activity of our borrowers to third party lenders.

During 2023, our estimates of future prepayment speeds reflected the then current interest rate environment and future expectations of increased prepayment speeds in line with market expectations of a decline in interest rates based on the scenarios produced by Moody's Analytics described above.

Historically, when rates rise, loan prepayments generally decline due to a reduction in consolidation activity of our borrowers to third party lenders, and when rates decline, loan prepayments generally rise due to an increase in consolidation activity of our borrowers to third party lenders.

Slower prepayment speeds increase the allowance for credit losses because the loss rates applied in the future periods are applied to higher loan balances.

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10-year treasury rate.

These models reduce the reliance on certain qualitative overlays compared to the previous default rate and prepayment speeds models.

These models reduced the reliance on certain qualitative overlays compared to the previous default rate and prepayment speeds models.

Prior to these changes, our default rate and prepayment speeds models used forecasts of college graduate unemployment, retail sales, home price index, and median family income.

Both the future default rate model and the future prepayment speeds model are used in determining the adequacy of the allowance for credit losses.

The combined impact upon implementation of these model enhancements and the changes in the related qualitative overlays did not have a material impact on the overall level of our allowance for credit losses.

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To demonstrate the sensitivity of the allowance for credit losses for our Private Education Loan portfolio to a more pessimistic forecast of expected economic outcomes, we considered what our allowance for credit losses would be if we applied a 100 percent probability weighting to the S3 unfavorable (or downside/90th percentile) scenario (with a concurrent 0 percent weighting for both the Baseline and S1 stronger near-term growth scenarios) under the range of scenarios noted above.

Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in our allowance for credit losses as of December 31, 2025 of $196 million or 12.9 percent.

In addition, we also considered a 100 percent probability weighting to the S4 unfavorable (or downside/96th percentile) scenario (with a concomitant 0 percent weighting for both the Baseline and S1 stronger near-term growth scenarios) under the range of scenarios noted above.

In addition, we also considered a 100 percent probability weighting to the S4 unfavorable (or downside/96th percentile) scenario (with a concurrent 0 percent weighting for both the Baseline and S1 stronger near-term growth scenarios) under the range of scenarios noted above.

Excluding consideration of any qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in our allowance for credit losses as of December 31, 2025 of $298 million or 19.6 percent.

These scenarios do not reflect our current expectations as of December 31, 2025, nor do they capture other qualitative adjustments or all the potential unknown variables that could arise in the forecast periods, but they provide an approximation of possible outcomes under hypothetical pessimistic conditions.

The estimated impacts were calculated for the two-year reasonable and supportable periods, but were not calculated for the remaining periods since long-term assumptions used to calculate the allowance for the remaining periods are based on longer term averages and only change when we determine there is a fundamental change that will affect the long-term rate.

Below we describe in further detail our policies and procedures for the allowance for credit losses as they relate to our Private Education Loan portfolio.

During the fourth quarter of 2024, we sold our remaining FFELP Loan portfolio to an unaffiliated third party.

During the third quarter of 2022, we reclassified our Credit Card loan portfolio to loans held-for-sale and subsequently sold the Credit Card portfolio to a third party in May 2023.

Allowance for Private Education Loan Losses

In addition to the key assumptions/estimates described above, some estimates are unique to our Private Education Loan portfolio.

Estimates are made on our Private Education Loans regarding when each borrower will separate from school.

Estimates are also made on our Private Education Loans regarding when each borrower will separate from school.

The cash flow timing of when a borrower will begin making full principal and interest payments is dependent upon when the student either graduates or leaves school.

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Once the loan is funded, that liability transfers to the allowance for Private Education Loan losses.

2024 Form 10-K — SLM CORPORATION 79

For newly originated loans that will be sold to strategic partners, 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 do not record an allowance for the unfunded loan commitments related to the loans classified as held for sale.

Key Credit Quality Indicators - Private Education Loans

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We continue to sell a segment of defaulted loans immediately after charge-off but no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead continue our collection efforts using in-house collectors and third-party collectors.

This improved our estimate of recovery rates for the year ended December 31, 2023.

When we estimate the timing and amount of future recoveries on charged-off loans, we no longer include expectations of future sales on retained defaulted loans.

We continue to monitor how we collect on defaulted loans and may modify the approach from time to time based on performance, industry conventions, and/or regulatory feedback.

For December 31, 2022, we used both an estimate of recovery rates from in-house collections as well as expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off loans.

Private Education Loans generally do not require borrowers to begin principal and interest repayment until at least six months after the borrowers have graduated or otherwise separated from school.

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At December 31, 2025 and 2024, 25 percent and 26 percent, respectively, of the principal balance of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or other deferment status and not required to make payments.

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Our collection policies for Private Education Loans allow for periods of nonpayment (forbearance) for certain borrowers requesting an extended grace period upon leaving school or experiencing temporary difficulty meeting payment obligations.

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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 at a later date (usually 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.

We estimate expected credit losses over the contractual period that we are exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by us.

The discounted cash flow approach described above includes expected future contractual disbursements.

The portion of the allowance for credit losses related to future disbursements is shown as a liability on the face of the balance sheet, and related provision for credit losses is reflected on the income statement.

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Uncollectible Interest

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Because owners bear a maximum of three percent loss exposure due to this federal guarantee, our allowance for credit losses for FFELP Loans and related periodic provision expense were relatively small.

For the years ended December 31, 2023 and 2022, we used the gross loss approach when estimating the allowance for credit losses for the unguaranteed portion of our FFELP Loans.

For the year ended December 31, 2023, we used the gross loss approach when estimating the allowance for credit losses for the unguaranteed portion of our FFELP Loans.

We maintained an allowance for credit losses for our FFELP Loans at a level sufficient to cover lifetime expected credit losses.

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Once the quantitative calculation was performed, we reviewed the adequacy of the allowance for credit losses and determined if qualitative adjustments needed to be considered.

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Risk Management

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The Operational and Compliance Risk Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the major non-financial risks, including compliance risks, operational risks, information and cyber security risk, and model risk.

The Operational and Compliance Risk Committee, along with the Financial Risk Committee, provides oversight of the development, maintenance, and monitoring of our risk management framework, risk governance structure, and risk appetite statements, metrics, and associated limits and thresholds, and the promotion of our risk

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management culture.

The Operational and Compliance Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer.

Operational and Compliance Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer.

• Audit Committee .

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Additionally, the Compensation Committee provides oversight of human capital management.

• Preferred Stock Committee.

The Preferred Stock Committee monitors and evaluates proposed actions that may impact the rights of holders of our preferred stock.

Management-Level Committee Structure

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ALCO is responsible for the strategy, processes, and authorities with which the Bank’s interest rate risk, liquidity, and capital adequacy are managed.

• Policy Management Committe e (“PMC”) The PMC is responsible for the effective and efficient administration of the Company’s policies, standards, and procedures.

Each of these sub-committees is comprised of subject matter experts from the senior management team and is accountable to the EC.

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Internal Audit regularly performs selected reviews of our risk management and compliance functions to assess the effectiveness of the overall risk management framework, identifies areas that may require increased focus and resources, and reports significant control issues and recommendations to executive management and the Audit Committee of the Board of Directors.

Annually, Internal Audit performs an

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independent risk assessment to evaluate the risk of all significant components of the Company and uses the results to develop an annual, risk-based Internal Audit plan to provide the assurance services noted above.

Annually, Internal Audit performs an independent risk assessment to evaluate the risk of all significant components of the Company and uses the results to develop an annual, risk-based Internal Audit plan to provide the assurance services noted above.

Risk Categories

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The Company has identified six major risk categories:

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Strategic Risk .

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Liquidity risks are overseen and recommendations approved primarily through ALCO.

The Financial Risk Committee of our Board of Directors is

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responsible for periodically reviewing the liquidity positions and contingency funding plan developed and administered by ALCO.

The Financial Risk Committee of our Board of Directors is responsible for periodically reviewing the liquidity positions and contingency funding plan developed and administered by ALCO.

Operational Risk .

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Operational risk is pervasive in that it exists in all business lines, functional units, legal entities, and geographic locations.

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Operational risk exposures are managed through a combination of first line of defense and control activities and second line of defense oversight.

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Compliance Risk.

Compliance risk is the risk of adverse impacts to earnings, capital, or reputation resulting from violations of, or non-conformance with, the Code of Business Conduct and with laws, rules, regulations, and self regulatory organizations’ standards.

Compliance risk is the risk of legal or regulatory sanctions, fines, penalties, financial losses, or loss to brand resulting from violations of, or non-conformance with, applicable laws, rules, regulations, and self-regulatory organizations’ standards, as well as the Code of Business Conduct.

Primary ownership and responsibility for compliance risk is placed with the first line of defense to identify and manage.

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Compliance risk metrics and regular reporting on compliance programs are provided to the Operational and Compliance Risk Committee of the Board of Directors.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis