What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-23 compared with 2022-02-24 · 107 added, 124 removed, 388 unchanged (37% of the section changed)

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SLM Corporation, more commonly known as Sallie Mae, is the premier financial brand in higher education.

Our mission is to power confidence as students begin their unique journey.

As an education solutions company, our mission is to power confidence as students begin their unique journey to, through, and immediately after college.

We simplify the college planning process by providing tools, resources, and information to help students and families make informed decisions and to improve access and support college completion through our scholarship programs and responsible financing options.

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These imperatives include:

increasing the profitability and growth of our core business, continuing to build and advance a strong brand among our customers, helping policymakers better understand the student lending marketplace and our role in it, allocating capital and returning it to shareholders when appropriate, and fostering a true mission- and performance-led culture.

maximizing the profitability and growth of our core private student loan business;

harnessing and optimizing the power of our brand and attractive client base;

seeking to better inform the external narrative about student lending and Sallie Mae;

maintaining a rigorous and predictable capital allocation and return program to create shareholder value;

and fostering a true mission- and performance-led culture.

Private Education Loans

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We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation (the “FDIC”).

In 2021, more than 397,000 families chose us as their Private Education Loan provider, more than any other private student loan lender.

We originated $5.4 billion of Private Education Loans in 2021, an increase of 2 percent from the year ended December 31, 2020.

In 2022, approximately 369,000 families chose us as their Private Education Loan provider, more than any other private student loan lender.

We originated approximately $6.0 billion of Private Education Loans in 2022, an increase of 10 percent from the year ended December 31, 2021.

As of December 31, 2022, we had $19.0 billion of Private Education Loans held for investment, net, outstanding.

The Private Education Loans we make to students and families serve primarily to bridge the gap between the cost of higher education and the amount funded through financial aid, federal loans, and student and families’ resources.

The Private Education Loans we make to students and families serve primarily to bridge the gap between the cost of higher education and the amount funded through family income and savings, scholarships and grants, and federal financial aid.

We also extend Private Education Loans as an alternative to similar federal education loan products where we believe our rates are competitive.

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We regularly review and update the terms of our Private Education Loan products.

Our Private Education Loans include important protections for the family, including loan forgiveness in case of death or permanent disability of the student borrower, a free, quarterly FICO score benefit to students and cosigners and, for borrowers with a Smart Option Student Loan, on-line tutoring services to help students succeed in school.

As a holder of Private Education Loans, we bear the full credit risk of the customers.

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Sallie Mae Bank

The Bank, which is regulated by the Utah Department of Financial Institutions (the “UDFI”), the FDIC, and the Consumer Financial Protection Bureau (the “CFPB”), offers traditional savings products, such as high-yield savings accounts, money market accounts, and certificates of deposit (“CDs”), originates Private Education Loans, and manages a loan portfolio that also includes loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP Loans”) and credit card loans (“Credit Cards”).

At December 31, 2021, the Bank had total assets of $28.9 billion, including $19.6 billion of Private Education Loans (held for investment), net, $693 million of FFELP Loans (held for investment), net, $23 million of Credit Cards (held for investment), net, and total deposits of $21.4 billion.

Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to sustain our Private Education Loan and other originations.

At December 31, 2022, the Bank had total assets of $28.3 billion, including $19.0 billion of Private Education Loans (held for investment), net, and $607 million of FFELP Loans (held for investment), and total deposits of $21.6 billion.

Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to sustain our Private Education Loan originations and achieve other business goals.

Our ability to obtain such funding is dependent, in part, on the capital levels of the Bank and its compliance with other applicable regulatory requirements.

At the time of this filing, there are no regulatory restrictions on our ability to obtain deposit funding or the interest rates we offer other than those restrictions generally applicable to all FDIC-insured banks of similar charter and size.

We maintained our diversified funding base by raising $1.6 billion in term funding collateralized by pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market in 2021.

We maintained our diversified funding base by raising $575 million in term funding collateralized by pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market in 2022.

This brought our total ABS funding outstanding at December 31, 2022 to $4.2 billion, or 22 percent of our total Private Education Loans held for investment portfolio.

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See the subsection titled “Regulation of Sallie Mae Bank” under “Supervision and Regulation” for additional details about the Bank.

We offer three types of credit cards, each uniquely designed to promote and reward financial responsibility, including a card that offers a cash back bonus that cardholders can apply to pay down a student loan.

At December 31, 2021, we had $23 million of Credit Cards, net, outstanding in our loans held for investment portfolio.

Our SmartyPig™ product is a free, FDIC-insured, online, goal-based savings account that helps consumers save for long- and short-term goals.

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At December 31, 2022, we had $330 million in SmartyPig deposits.

Personal Loans and Upromise

In the fourth quarter of 2019, we discontinued originations of our unsecured personal loans used for non-educational purposes (“Personal Loans”) and did not originate or purchase any Personal Loans in 2021 and 2020.

In the third quarter of 2020, we sold our entire Personal Loan portfolio to focus our capital and attention on the core education loan business.

As part of our efforts to focus and align to our core business, on May 31, 2020, we also sold our former Upromise Inc.

subsidiary, which operated a free to join rewards program.

We plan to exit and sell our credit card business to focus resources on our core business strategies.

We processed completed credit card applications received through the end of December 2022.

At December 31, 2022, we had $29 million in Credit Card receivables in loans held-for-sale.

2022 Form 10-K — SLM CORPORATION 5

Our Lending Philosophy

Sallie Mae is committed to lending responsibly and encourages responsible borrowing by advising students and families to follow this three-step approach to paying for college:

Sallie Mae is committed to responsible lending and encourages responsible borrowing by advising students and families to follow this three-step approach to paying for college:

Start with money you won’t have to pay back.

Supplement your college savings and income by maximizing scholarships, grants, and work-study.

Supplement college savings and income by maximizing scholarships, grants, and work-study.

Explore federal student loans.

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Consider a responsible private student loan.

Fill the gap between your available resources and the cost of college.

Fill the gap between available resources and any remaining costs of college.

The best interests of our customers are front-and-center and integral to our responsible lending philosophy.

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To help applicants understand their loan and its terms, we provide multiple, customized disclosures explaining the applicant’s starting interest rate, the interest rate during the life of the loan, and the loan’s total cost under the available repayment options.

Our Private Education Loans feature (i) no origination fees and no prepayment penalties, (ii) interest rate reductions for those who enroll in and make monthly payments through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv) a choice of repayment options, and (v) a choice of either variable or fixed interest rates.

Beginning in 2017, all newly-originated Private Education Loans for undergraduate students included the benefit of free access to study services at an online third-party vendor to assist students in advancing their education.

Our Private Education Loans generally feature (i) no origination fees and no prepayment penalties, (ii) interest rate reductions for those who enroll in and make monthly payments through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv) a choice of repayment options, (v) a choice of either variable or fixed interest rates at origination, and (vi) loan forgiveness in the case of death or permanent disability of the student borrower.

Our Approach to Assisting Students and Families Borrowing and Repaying Private Education Loans

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In addition, SallieMae.com provides educational content for customers on how to organize loans, set up a monthly budget, and understand repayment obligations.

Examples are provided to help explain how payments are applied and allocated, and see how the accrued interest on alternative repayment programs could affect the cost of customers’ loans.

Examples are provided to help explain how payments are applied and allocated, and how the accrued interest on alternative repayment programs could affect the cost of customers’ loans.

The site also provides important information on benefits available to servicemembers under the Servicemembers Civil Relief Act (the “SCRA”).

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See Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” for additional information about the recent changes to our credit administration practices.

COVID-19 Response

We are accommodating to customers who face special circumstances or have trouble making loan payments.

Like many Americans, some of our customers faced unforeseen challenges due to the pandemic of respiratory disease caused by the coronavirus 2019 or COVID-19 (“COVID-19”).

Like many Americans, some of our customers faced unforeseen challenges due to the coronavirus 2019 or COVID-19 pandemic (“COVID-19”).

In response, we took significant steps to provide relief to assist those customers.

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We enhanced the functionality of our chat, automated phone system, mobile app, and website features to help all our customers manage their accounts, make or postpone payments, and request hardship relief.

Customers may contact us in whatever way is most convenient for them.

Historically, we also have utilized disaster forbearance to assist borrowers affected by material events, including hurricanes, wildfires, floods, and the COVID-19 pandemic.

We typically grant disaster forbearance to affected borrowers in increments of up to three months at a time.

In accordance with regulatory guidance that encourages lenders to work constructively with customers who have been impacted by COVID-19, we invoked this same disaster forbearance program to assist our customers through COVID-19 and offered this program across our operations, including through mobile and self-service channels such as chat and interactive voice response (“IVR”) to address initial high volumes at the onset of the pandemic.

We have since returned to a policy of interacting with 100 percent of these customers through our customer care and collections personnel.

Customers requesting a disaster forbearance or an extension of a disaster forbearance are required to speak with our customer care and collections personnel.

During COVID-19, our customers experienced higher levels of financial hardship, which initially led to higher levels of forbearance.

We expect for some customers financial hardship may lead to higher levels of delinquencies and defaults in the future, as borrowers who had received disaster forbearance from us re-enter repayment status.

Beginning in June 2021, we stopped granting COVID-19 related disaster forbearances.

As borrowers in the various delinquency buckets exit disaster forbearance and begin to enter repayment, we expect elevated levels of losses on this segment of our customers.

We expect that, left unabated, this deterioration in delinquency and default rates may persist until economic conditions return to pre-pandemic levels.

In accordance with regulatory guidance that encouraged lenders to work constructively with customers who have been impacted by COVID-19, we invoked this same disaster forbearance program to assist our customers through COVID-19 and offered this program across our operations.

Beginning in June 2021, the COVID-19 related disaster forbearance program ended.

As borrowers in the various delinquency buckets exited disaster forbearance and began to enter repayment, we expected and experienced elevated levels of losses on this segment of our customers.

For further information on the impact of COVID-19 on the Company, see Part II, Item 7.

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Customer Service

We perform the origination, servicing, and collections activities for all of our Private Education Loans in the United States with dedicated representatives assisting customers with various needs, including the military personnel customers who may be eligible for military benefits.

We perform the origination, servicing, and collections activities for all of our Private Education Loans with dedicated representatives assisting customers with various needs, including the military personnel customers who may be eligible for military benefits.

We expect the Bank or affiliates of the Bank to retain servicing of all Private Education Loans the Bank originates, regardless of whether the loans are held, sold, or securitized.

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• initiation of customer surveys to gain feedback on areas for improvement within our servicing function.

2021 Form 10-K — SLM CORPORATION 7

These and other enhancements have contributed to streamlined originations and servicing processes, increased customer self-services rates, and improved customer satisfaction in all channels.

The Company maintains an A+ rating with the Better Business Bureau.

Customer Success

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Our College Planning Calculator helps families set college savings goals, projects the full costs of a college degree, and estimates future student loan payments and the annual starting salary level needed to keep payments manageable.

2022 Form 10-K — SLM CORPORATION 7

Scholarship Search, our free online scholarship database, is home to more than 6 million scholarships collectively worth over $30 billion.

Our Scholarship Search for Graduate Students includes access to approximately 1 million graduate school scholarships with an aggregate value of more than $1.35 billion.

We also have a one-stop college-planning destination — Sallie Mae’s Paying for College Resource — created with, and for, high school educators and counselors.

The Sallie Mae Paying for College Resource provides access to free, online college planning tools, short educational videos on financial aid, and other valuable information to help guide students and their families through the planning for college process.

To raise awareness about the importance of completing the FAFSA and to simplify the process, we partnered with Embark, the leading provider of admissions software for schools and universities, to provide a free online tool to help families file the FAFSA.

The tool reduces the average time it takes to complete the FAFSA from 55 minutes to less than 20 minutes.

In 2021, we relaunched our online resource to provide a centralized and simplified site that provides information on tools and resources for school counselors as they assist students and families plan and pay for college.

We are also creating a suite of confidence inspiring tools and resources as well as new, innovative partnerships that we expect will provide significant value to our customers.

In January 2022, we announced we had executed an agreement to acquire the assets of Epic Research Education Services, LLC, which does business as Nitro College (“Nitro”).

Nitro takes pride in equipping college students and their parents with the necessary tools to navigate college financing, manage their debt, and obtain scholarship opportunities.

In addition to providing a scholarship finder, Nitro provides FAFSA application support, information on grants, and calculators to help college students determine the potential return on investment from a college degree.

The addition of Nitro will support our mission of providing students with the confidence needed to successfully navigate the higher education journey.

Strategically, we expect the acquisition of the Nitro assets, including its employees and intellectual property, when complete, to immediately expand our digital marketing capabilities, reduce the cost to acquire customer accounts, and accelerate our progress to become a broader education solutions provider for students before, during, and immediately after college.

The transaction is subject to customary approvals and closing conditions and is expected to close in the first quarter of 2022.

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In 2022, we acquired the assets of Epic Research Education Services, LLC, which did business as Nitro College (“Nitro”).

Nitro provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.

We expect the acquisition of Nitro to enhance future strategic growth opportunities for us and expand our digital marketing capabilities, reduce the cost to acquire customer accounts, and accelerate our progress to become a broader education solutions provider helping students to, through, and immediately after college.

Key Drivers of Private Education Loan Market Growth

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We expect students who attend and complete programs at for-profit schools to support the same repayment performance as students who attend and graduate from public and private not-for-profit four-year degree granting institutions.

Our competitors 1 in the Private Education Loan market include large banks such as Discover Bank, Citizens Financial Group, Inc.

and PNC Bank, as well as a number of smaller specialty finance companies and members of the Education Finance Council.

8 SLM CORPORATION — 2022 Form 10-K

Our competitors 1 in the Private Education Loan market include large banks such as Discover Bank, Citizens Financial Group, Inc., and PNC Bank, as well as a number of smaller specialty finance companies and members of the Education Finance Council.

We compete based on our products, originations capability, price, and customer service.

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• According to the U.S.

Department of Education’s projections released in January 2021, the enrollment is projected to remain relatively flat from 2020 to 2029.

Department of Education’s projections released in November 2021, the enrollment is projected to remain relatively flat from 2020 to 2029.

______________________

MeasureOne Q3 2021 Private Student Loan Report, November 2021.

www.measureone.com.

Enterval LLC 2022 Q3 Private Student Loan Report, November 2022.

www.enterval.com

Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2029 (NCES, January 2022), Enrollment in Postsecondary Institutions (NCES, January 2022).

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Average published tuition and fees at public and private four-year not-for-profit institutions grew 1.7 percent and 2.1 percent, respectively, between AYs 2020-2021 and 2021-2022 and 1.8 percent and 3.5 percent, respectively, between AYs 2021-2022 and 2022-2023.

3 Tuition and fees are likely to continue to grow at the more modest rates of recent years.

Published Tuition and Fees 3

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Sources of Funding

Private Education Loan originations decreased to an estimated $11 billion in AY 2020-2021, down 15 percent over the previous year.

Private Education Loan originations remained at an estimated $11 billion in AY 2021-2022, unchanged from the previous year.

The College Board-Trends in Student Aid 2016.

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www.collegeboard.org.

MeasureOne www.measureone.com.

Enterval LLC.

www.enterval.com.

Funding sources in current dollars and include federal and private loan data.

Other sources for the size of the Private Education Loan market exist and may cite the size of the market differently.

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• We estimate total spending on higher education was $483 billion in AY 2021-2022, up from $447 billion in AY 2017-2018.

Private Education Loan originations decreased to an estimated $11 billion in AY 2020-2021, down 15 percent over the previous year, and represent just 2.4 percent of total spending on higher education.

Private Education Loan originations remained unchanged at an estimated $11 billion in AY 2021-2022, and represent just 2.4 percent of total spending on higher education.

Modest growth in total spending can lead to meaningful increases in Private Education Loans in the absence of growth in other sources of funding.

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In doing so, we utilize information from the U.S.

Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2027 (NCES 2020, October 2020), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in Student Aid 2016.

Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2030 (NCES 2022, October 2022), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing and Student Aid 2022.

Other sources for these data points also exist publicly and may vary from our computed estimates.

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It requires the issuance of many regulations, which will take effect over several years.

Additionally, states are taking an increased interest in directly regulating the conduct and practices of student loan servicers.

Some states recently have enacted legislation creating specialized offices within state government to oversee the student loan servicing industry operating within those states, as well as to set minimum standards governing the practices of student loan servicers.

This represents a significant change from the past in which states generally did not issue laws and regulations tailored specifically to the student loan servicing industry.

Additionally, states are taking an increased interest in directly regulating the conduct and practices of student loan lenders and servicers.

Some states have enacted legislation creating specialized offices within state government to oversee the student loan origination and servicing industry operating within those states, as well as to set minimum standards governing the practices of student loan lenders and servicers.

This represents a significant change from the past in which states generally did not issue laws and regulations tailored specifically to the student loan origination and servicing industry.

Consumer Protection Laws and Regulations

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• various state and federal laws governing unfair, deceptive, or abusive acts or practices;

• various state laws and regulations imposing specific, mandated standards and requirements on the conduct and practices of student loan servicers;

• various state laws and regulations imposing specific, mandated standards and requirements on the conduct and practices of student loan lenders and servicers;

• the federal Truth-In-Lending Act and Regulation Z, which govern disclosures of credit terms to consumer borrowers;

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• the Truth in Savings Act and Regulation DD, which mandate certain disclosures related to consumer deposit accounts;

• the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by the Federal Reserve Bank (“FRB”), which relate to the availability of deposit funds to consumers;

• the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which relate to the availability of deposit funds to consumers;

• the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with federal government requests for and subpoenas of financial records;

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• the Telephone Consumer Protection Act, which governs communication methods that may be used to contact customers;

• the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic information about consumers to non-affiliated third-parties;

2022 Form 10-K — SLM CORPORATION 13

• the California Consumer Privacy Act, which governs transparency and disclosure obligations regarding personal information of residents of the State of California.

• the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic information about consumers to non-affiliated third-parties;

• the California Consumer Privacy Act and California Privacy Rights Act, which govern transparency and disclosure obligations regarding personal information of residents of the State of California.

Consumer Financial Protection Bureau

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Department of Education (the “CFPB/DOE MOU”) in order to better serve student loan borrowers.

Under the agreement, the agencies will share complaint information from borrowers and meet quarterly to discuss, among other things, the nature of complaints received and available information about the resolution of complaints.

Under the agreement, the agencies share complaint information from borrowers and meet quarterly to discuss, among other things, the nature of complaints received and available information about the resolution of complaints.

Regulation of Sallie Mae Bank

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As “institution-affiliated parties” of the Bank, we, our non-bank subsidiaries, and our management, employees, agents, independent contractors, and consultants are subject to potential civil and criminal penalties for violations of law, regulations, or written orders of a government agency.

Violations can include failure to timely file required reports, filing false or misleading information, or submitting inaccurate reports.

Violations can include failure to timely file required

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reports, filing false or misleading information, or submitting inaccurate reports.

Civil penalties may be as high as $1,000,000 per day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years.

Regulators have flexibility to commence enforcement actions against institutions and institution-affiliated parties, and the FDIC has the authority to terminate deposit insurance.

When issued by a

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banking agency, cease and desist and similar orders may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including by compelling restitution, reimbursement, indemnifications, or guarantees against loss.

When issued by a banking agency, cease and desist and similar orders may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including by compelling restitution, reimbursement, indemnifications, or guarantees against loss.

A financial institution may also be ordered to restrict its growth, dispose of certain assets, rescind agreements or contracts, or take other actions determined to be appropriate by the ordering agency.

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The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement entered into by the Company and Navient in connection with the Spin-Off (the “Separation and Distribution Agreement”).

On January 18, 2017, the Illinois Attorney General filed a lawsuit in Illinois state court against Navient - its subsidiaries Navient Solutions, Inc., Pioneer Credit Recovery, Inc., and General Revenue Corporation - and the Bank arising out of the Multi-State Investigation.

On March 20, 2017, the Bank moved to dismiss the Illinois Attorney General action as to the Bank, arguing, among other things, the complaint failed to allege with sufficient particularity or specificity how the Bank was responsible for any of the alleged conduct, most of which predated the Bank’s existence.

On July 10, 2018, the Court granted the Bank’s motion to dismiss without prejudice.

On August 7, 2018, the Illinois Attorney General filed a First Amended Complaint and, on October 9, 2018, the Bank again moved to dismiss the action based on grounds similar to those raised in its March 20, 2017 motion.

The Illinois Attorney General filed its response on November 21, 2018, and the Bank filed its reply on December 10, 2018.

Oral argument on the motion took place on January 9, 2019.

The Court took the motion under advisement, and a hearing took place on December 7, 2021.

On December 16, 2021, the Court entered an Order granting the Bank’s Motion to Dismiss the First Amended Complaint, thereby dismissing the Bank from the action with prejudice.

On January 13, 2022, Navient announced agreements with a total of forty state attorneys general to resolve their previously disclosed multistate litigation and investigation matters, including but not limited to four lawsuits (brought by the attorneys general for the states of California, Washington, Pennsylvania, and New Jersey) arising out of the Multi-State Investigation.

Neither SLM, the Bank, nor any of their current subsidiaries are named in, or otherwise a party to, the California, Washington, Pennsylvania, or New Jersey lawsuits, and no claims are asserted against them.

The Company and the Bank are not parties to the Navient settlement and are not contributing any of the relief sought in the settlement.

Further, the consent judgments between Navient and the various states contain releases of claims as to pre-Spin-Off SLM (including the Bank and other consolidated subsidiaries) for conduct occurring on or before the date of the Spin-Off.

Neither SLM, the Bank, nor any of their current subsidiaries were named in, or otherwise a party to, the California, Washington, Pennsylvania, or New Jersey lawsuits, and no claims were asserted against them.

The Company and the Bank were not parties to the Navient settlement and have not contributed any of the relief sought in the settlement.

Further, the consent judgments between Navient and the various states contained releases of claims as to pre-Spin-Off SLM (including the Bank and other consolidated subsidiaries) for conduct occurring on or before the date of the Spin-Off.

Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities related to the conduct of the pre-Spin-Off consumer banking business that were specifically assumed by the Bank (and as to which the Bank is obligated to indemnify Navient).

Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the Multi-State Investigation and the related lawsuits in which the Bank has been named as a party.

Navient has informed the Bank, however, that it believes that the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the above-described lawsuits under the Separation and Distribution Agreement and/or a

2021 Form 10-K — SLM CORPORATION 15

separate loan servicing agreement between the parties, and has suggested that the parties defer further discussion regarding indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits.

Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed multistate litigation and investigation matters, as well as related lawsuits in which the Bank has been named as a party.

Navient has informed the Bank, however, that it believes the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the above-described lawsuits under the Separation and Distribution Agreement and/or a separate loan servicing agreement between the parties, and has suggested that the parties defer further discussion regarding indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits.

The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue in the Multi-State Investigation and in the above-described lawsuits.

2022 Form 10-K — SLM CORPORATION 15

Standards for Safety and Soundness

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The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC.

Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends to the Company from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.

Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.

The Company pays quarterly cash dividends on its outstanding Floating-Rate Non-Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”) when, as, and if declared by its Board of Directors, in the Board’s discretion.

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The January 23, 2019 share repurchase program (the “2019 Share Repurchase Program”), which was effective upon announcement and expired on January 22, 2021, permitted the Company to repurchase from time to time shares of its common stock up to an aggregate repurchase price not to exceed $200 million.

We have utilized all capacity under the 2019 Share Repurchase Program, having repurchased 17 million shares of common stock for $167 million for the year ended December 31, 2019 and 3 million shares of common stock for $33 million in the year ended December 31, 2020.

We utilized all capacity under the 2019 Share Repurchase Program, having repurchased 17 million shares of common stock for $167 million for the year ended December 31, 2019 and 3 million shares of common stock for $33 million in the year ended December 31, 2020.

The January 22, 2020 share repurchase program (the “2020 Share Repurchase Program”), which was effective upon announcement and expired on January 21, 2022, permitted the Company to repurchase shares of its common stock from time to time up to an aggregate repurchase price not to exceed $600 million.

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Under the 2020 Share Repurchase Program, we repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021.

We have now utilized all capacity under the 2020 Share Repurchase Program.

We have utilized all capacity under the 2020 Share Repurchase Program.

In October 2020, we initiated a cash tender offer to purchase up to 2,000,000 shares of our Series B Preferred Stock.

On November 30, 2020, we accepted for purchase 1,489,304 shares of the Series B Preferred Stock at a purchase price of $45 per share plus an amount equal to accrued and unpaid dividends, for an aggregate purchase price of approximately $68 million.

On January 27, 2021, the Company announced another share repurchase program (the “2021 Share Repurchase Program”), which was effective upon announcement and expires on January 26, 2023, and originally permitted the Company to repurchase shares of its common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.

On January 27, 2021, the Company announced another share repurchase program (the “2021 Share Repurchase Program”), which was effective upon announcement and expired on January 26, 2023, and originally permitted the Company to repurchase shares of its common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.

On February 2, 2021, under the auspices of the 2021 Share Repurchase Program, we announced the commencement of a “modified Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share.

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We cancelled the 28.5 million shares purchased in connection with the Tender Offer.

On October 20, 2021, we announced a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expires on January 26, 2023.

This is in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.

On October 20, 2021, we announced a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023.

This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion.

Of the total $1.5 billion 2021 Share Repurchase Program authorization, we repurchased 81.1 million shares of common stock at an average price per share of $18.07, for $1.46 billion in the year ended December 31, 2021.

(Those amounts include the shares repurchased under the Tender Offer described above.) There was $38 million of capacity remaining under the 2021 Share Repurchase Program at December 31, 2021.

(Those amounts include the shares repurchased under the Tender Offer described above.) We also repurchased 2.0 million shares of common stock under the 2021 Share Repurchase Program for $38 million in the three months ended March 31, 2022.

We have utilized all capacity under the 2021 Share Repurchase Program.

On January 26, 2022, we announced a new share repurchase program (the “2022 Share Repurchase Program”), which was effective upon announcement and expires on January 25, 2024, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.

Under the 2022 Share Repurchase Program, we repurchased 38.2 million shares of common stock at an average price per share of $17.52, for $669 million in the year ended December 31, 2022.

There was $581 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2022.

So long as there is unexpired capacity under a given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions.

The timing and volume of any repurchases under the 2021 Share Repurchase Program and the 2022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the programs or at all.

The timing and volume of any repurchases under the 2022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the program or at all.

We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under the share repurchase programs.

The Bank declared $1.4 billion, $579 million, and $254 million in dividends for the years ended December 31, 2021, 2020, and 2019, respectively, with the proceeds primarily used to fund the 2021, 2020, and 2019 Share Repurchase Programs and stock dividends.

The Bank declared $700 million, $1.4 billion, and $579 million in dividends for the years ended December 31, 2022, 2021, and 2020, respectively, with the proceeds primarily used to fund the 2022, 2021, and 2020 Share Repurchase Programs and stock dividends.

Regulatory Capital Requirements

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Under the FDIC’s regulations implementing the Basel III capital framework (“U.S.

Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.

2022 Form 10-K — SLM CORPORATION 17

accounting practices.

The Bank is subject to the following minimum capital ratios under U.S.

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To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.

Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopt CECL (as hereinafter defined) during the 2020 calendar year, including the Bank, may 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.

The Bank has elected to use this option.

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.

The Bank elected to use this option.

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.

From January 1, 2022 to January 1, 2025, the adjusted transition amounts will be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year.

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

On January 1 of each year from 2023 to 2025, the adjusted transition amounts will continue to be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each 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.

This 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, 2021, the adjusted amount of the transition adjustment to be phased-in, in equal amounts on January 1 of each year beginning January 1, 2022 through January 1, 2025, totaled $836 million.

At December 31, 2022, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:

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

(Dollars in thousands) January 1, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2022

Retained earnings $ 952,639 $ (57,859) $ (58,429) $ (209,088) $ 627,263

Allowance for credit losses 1,143,053 (55,811) (49,097) (259,536) 778,609

Liability for unfunded commitments 115,758 (2,048) (9,333) (26,094) 78,283

Deferred tax asset 306,171 — — (76,542) 229,629

Stress Testing Requirements

The Dodd-Frank Act as enacted imposed stress testing requirements on banking organizations with total consolidated assets, averaged over the four most recent consecutive quarters, of more than $10 billion.

The Bank completed its third annual stress test (using the scenarios provided by the FDIC) with the January 1, 2018 stress testing cycle.

As a result of the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law on May 24, 2018, the Bank became exempt from formally filing and publishing the results.

The Bank is not currently subject to stress testing requirements under the Dodd-Frank Act.

However, under regulatory guidance, the Bank still conducts annual capital stress tests, the results of which it presents to its prudential regulators - the FDIC and the UDFI - for their review.

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These results are submitted to the Bank’s prudential regulators at their request.

18 SLM CORPORATION — 2022 Form 10-K

Deposit Insurance and Assessments

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Assessment rates for insured banks also are subject to adjustment depending on a number of factors, including significant holdings of brokered deposits in certain instances and the issuance or holding of certain types of debt.

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With respect to brokered deposits, an insured depository institution must be well capitalized under the prompt corrective action framework in order to accept, renew, or roll over such deposits without FDIC clearance.

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The privacy regulations also restrict information sharing among affiliates for marketing purposes and govern the use and provision of information to consumer reporting agencies.

Federal and state banking agencies have prescribed standards for maintaining the security and confidentiality of consumer information, and the Bank is subject to such standards, as well as certain federal and state laws or standards for notifying consumers in the event of a security breach.

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in the event of a security breach.

In addition, we must comply with increasingly complex and rigorous data privacy and data security laws and regulatory standards enacted to protect business and personal data.

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Any failure to comply with these laws and regulatory standards could subject us to legal and reputational risk.

For example, California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, and applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.

The CCPA contains several exemptions, including an exemption applicable to information that is collected, processed, sold, or disclosed pursuant to the GLBA.

However, the definition of personal information is expanded under the CCPA to apply to certain data beyond the scope of the GLBA exemption.

For example, California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, and the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA and brought additional compliance obligations with respect to certain processing of personal information of California residents once it came into effect in most material respects on January 1, 2023.

The CCPA and CCRA apply to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.

The CCPA and CCRA contain several exemptions, including an exemption applicable to information that is collected, processed, sold, or disclosed pursuant to the GLBA.

However, the definition of personal information is expanded under the California statutes to apply to certain data beyond the scope of the GLBA exemption.

Misuse of or failure to secure certain personal information could result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility, and could negatively affect our business, financial condition, and results of operations.

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adopt similar laws or if a comprehensive federal data privacy law is enacted, we may expend considerable additional resources to meet these requirements and the overall risk to the Company could incrementally increase depending upon the reach and application of any such laws.

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State Regulation of Student Loan Servicers

In certain states, laws regulating the conduct of student loan servicers may apply to and impact the servicing practices of the Bank.

State Regulation of Student Loan Lenders and Servicers

In certain states, laws regulating the conduct of student loan lenders and servicers may apply to and impact the origination and servicing practices of the Bank.

While these state laws vary in content, they generally include components relating to licensure and oversight by state authorities and the creation of specialized student loan ombudsman offices to oversee the student loan industry operating within these states.

These laws may also include requirements pertaining to payment processing, customer communications, the handling of customer inquiries and complaints, information concerning loan repayment options, access to borrower account records, the processing of disability applications and borrower requests to remove cosigners from loans, and debt collection, among other requirements.

Notably, these laws often include provisions for enforcement of alleged violations by state regulators as well as private litigation by aggrieved consumers.

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For our 2016-A transaction and subsequent securitizations that are treated as on-balance sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period of time) an “eligible horizontal residual interest” comprised of residual certificates representing at least five percent of the fair value of all ABS interests issued in the securitization transaction, determined as of the date of transfer.

With any securitizations, including any loan sale transactions structured as securitizations, that are treated as off-balance sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction or a single interest entitling the holder to five percent of any amounts payable by the trustee in respect of each interest issued by the issuing trust.

With any securitizations, including any loan sale transactions structured as securitizations, that are treated as off-balance

20 SLM CORPORATION — 2022 Form 10-K

sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction;

for future off-balance securitizations, we may also comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) a single interest entitling the holder to five percent of any amounts payable by the trustee in respect of each interest issued by the issuing trust.

Anti-Money Laundering, the USA PATRIOT Act, and U.S.

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laws and regulations applicable to U.S.

20 SLM CORPORATION — 2021 Form 10-K

In December 2013, the U.S.

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We further adapted to the changing environment in 2021, and now offer remote, in-office, and hybrid options so our team may work in a manner best suited for them and their positions.

We continue to provide team members with the tools and resources necessary to support their success and drive performance of the Company.

We continue to provide

2022 Form 10-K — SLM CORPORATION 21

team members with the tools and resources necessary to support their success and drive performance of the Company.

Our team members are involved in the communities in which they live and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program.

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We also provide matching gifts for team members to support their interests and needs and those of their communities.

2021 Form 10-K — SLM CORPORATION 21

22 SLM CORPORATION — 2022 Form 10-K

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 1. Business