5 unchanged sentences
Impact of COVID-19 on Sallie Mae
−Removed: During the first quarter of 2020, the outbreak of COVID-19 began to spread worldwide and has caused significant disruptions to the U.S.
−Removed: and world economies.
−Removed: The impact of COVID-19 has been felt by our colleagues, our customers, and our communities.
−Removed: In response to COVID-19, we implemented efforts to safeguard our team members and enabled a remote work environment.
−Removed: In addition, we took steps to help our customers during the crisis.
−Removed: Further, The Sallie Mae Fund, our charitable arm, made contributions to assist in our hometown communities.
−Removed: The COVID-19 crisis was unprecedented and had a significant impact on the economic environment globally and in the U.S.
−Removed: While we have highlighted below how we responded to the pandemic in 2020 and 2021, the pandemic continued to have lingering impacts on our financial results in 2022.
−Removed: As COVID-19 mutates into newer strains, there is a significant amount of uncertainty as to the length and breadth of the impact to the U.S.
+Added: The COVID-19 crisis was unprecedented and has had a significant impact on the economic environment globally and in the U.S.
+Added: On April 10, 2023, President Biden signed into law a joint resolution that immediately terminated the COVID-19 national emergency.
+Added: On June 3, 2023, President Biden signed into law the Fiscal Responsibility Act of 2023, and as a result, the U.S.
+Added: Department of Education announced the end of its COVID-19 student loan forbearance program.
+Added: Beginning on September 1, 2023, interest accrual on federal student loans resumed and in October 2023, payments by federal student loan borrowers resumed.
+Added: There still remains some uncertainty as to the length and breadth of the COVID-19 impact to the U.S.
economy and, consequently, on us.
−Removed: The information below should be read in conjunction with our COVID-19 pandemic risk factor, see Part I, Item 1A.
−Removed: “Risk Factors - Pandemic Risk ” in this annual report on Form 10-K.
−Removed: In addition, see the forward-looking and cautionary statements discussion in this annual report on Form 10-K.
−Removed: Forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that may cause actual results to be materially different from those reflected in such forward-looking statements.
−Removed: These factors include, among others, the risks and uncertainties set forth in Part I, Item 1A.
−Removed: “Risk Factors” and elsewhere in this annual report on Form 10-K.
−Removed: Financial Result s
−Removed: We continued to see an impact to our financial results as a direct result of COVID-19 in 2022.
−Removed: The economic upheaval that occurred in 2022 (e.g., higher inflation, higher interest rates, and lower stock market) as the country began to recover from the initial effects of the pandemic and the resulting government stimulus programs also affected our financial results and operations through increased loan yields and deposit costs, increased losses on loans and increased allowance for credit losses, increased employee compensation costs, and reduced staffing.
−Removed: Difficulty in hiring and retaining servicing and collections staff contributed to the higher charge-off rates in 2022, as did losses from the “gap year” program we implemented in 2020 to help our borrowers.
−Removed: During the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans, and in the fourth quarter of 2021 we increased them again for the remaining term of the underlying loans.
−Removed: These faster estimated prepayment speeds during the two-year reasonable and supportable period reflected the significant improvement in economic forecasts at the time, as well as the implementation of an updated prepayment speed model.
−Removed: We experienced higher prepayments during the COVID-19 pandemic, when unemployment rates were elevated, than we would have expected based upon our experience during past financial crises.
−Removed: In 2022, as interest rates rose from the low levels experienced during the pandemic, we saw prepayments slow down, which resulted in an increase in our allowance for credit losses.
−Removed: Private Education Loans (held for investment) in forbearance as a percentage of held for investment Private Education Loans in repayment and forbearance was 1.8 percent at December 31, 2022, compared to 1.9 percent at December 31, 2021.
−Removed: The forbearance rate on December 31, 2022 was lower than on December 31, 2021 due to our ending disaster forbearance related to COVID-19 in June 2021 and our adoption of the previously announced planned credit administration practices changes.
−Removed: Delinquencies at December 31, 2022, as a percentage of Private Education Loans in repayment, increased to 3.8 percent from 3.3 percent at December 31, 2021.
−Removed: The increase in delinquencies was primarily due to the ending of the disaster forbearance program related to COVID-19, the adoption of new credit administration practices changes in the latter part of 2021, and operational challenges we experienced during 2022.
−Removed: 2022 Form 10-K — SLM CORPORATION 51
−Removed: For the start of the 2021-2022 academic year, the majority of colleges, universities, and trade schools returned to in-person classes while offering full residential options.
−Removed: For the start of the 2022-2023 academic year, we continued to see colleges, universities, and trade schools returning to in-person classes and full residential options.
−Removed: While these schools moved away from an emphasis on hybrid and online classes, some colleges maintained the option for online classes as a safety precaution.
−Removed: For some students, going back to school in the fall of 2020 was not an option because of the pandemic or for other reasons.
−Removed: Therefore, some students took a “gap year” before returning to school.
−Removed: In 2020, for those students that had unexpectedly separated from school, we had provided an extension of time, until the fall of 2021, to re-enroll before beginning their grace period that occurs upon separation from school and prior to entering full principal and interest repayment status.
−Removed: At December 31, 2020, $1.0 billion of Private Education Loans had been granted this extended period of time.
−Removed: Beginning September 30, 2021, we no longer granted this “gap year” extension.
−Removed: Losses on these “gap year” loans, which totaled $59 million, were higher than expected and contributed to the higher charge-offs in 2022.
−Removed: On March 27, 2020, then President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which, among other things, allows us to (i) elect to suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as troubled debt restructurings (“TDRs”), and (ii) suspend any determination of a loan modified as a result of the effects of COVID-19 as being a TDR, including impairment for accounting purposes.
−Removed: Furthermore, on December 27, 2020, the Consolidated Appropriations Act, 2021 (“CAA”) was signed into law.
−Removed: The CAA provides for additional COVID-19 focused relief and extends certain provisions of the CARES Act.
−Removed: We elected to suspend TDR accounting for modifications of loans that occurred as a result of COVID-19 for the applicable period of the CARES Act and CAA relief.
−Removed: The relief from TDR guidance applied to modifications of loans that were not more than 30 days past due as of December 31, 2019, and that occurred during the period beginning on March 1, 2020, and ending on the earlier of (i) 60 days after the date on which the national emergency related to the COVID-19 outbreak is terminated, or (ii) January 1, 2022.
−Removed: We continued to apply TDR accounting to those loans that were more than 30 days past due as of December 31, 2019 and were subsequently modified through December 31, 2021.
−Removed: Effective January 1, 2022, we adopted Accounting Standards Update (“ASU”) No.
−Removed: 2022-02, “Troubled Debt Restructurings and Vintage Disclosures” (“ASU No.
−Removed: 2022-02”), which eliminated the accounting guidance for TDRs while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Credit Losses —Adoption of ASU No.
−Removed: 2022-02 ‘Troubled Debt Restructurings and Vintage Disclosures’ ” for additional details about the adoption of the new accounting guidance.
−Removed: Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopt 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.
−Removed: The Bank elected to use this option.
−Removed: 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.
−Removed: On January 1, 2022, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes.
−Removed: 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.
−Removed: 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.
−Removed: This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
−Removed: 52 SLM CORPORATION — 2022 Form 10-K
−Removed: At December 31, 2022, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:
−Removed: 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
−Removed: (Dollars in thousands) January 1, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2022
−Removed: Retained earnings $ 952,639 $ (57,859) $ (58,429) $ (209,088) $ 627,263
−Removed: Allowance for credit losses 1,143,053 (55,811) (49,097) (259,536) 778,609
−Removed: Liability for unfunded commitments 115,758 (2,048) (9,333) (26,094) 78,283
−Removed: Deferred tax asset 306,171 — — (76,542) 229,629
−Removed: Customers and Credit Performance
−Removed: COVID-19 had a far reaching, negative impact on individuals and businesses.
−Removed: Specifically, COVID-19 materially disrupted business operations throughout the country, resulting in supply chain disruptions and inflationary pressures.
−Removed: As a result, we expected many of our individual customers to experience financial hardship, creating a challenge to meet credit standards for new loan originations and making it difficult, if not impossible, to fulfill their payment obligations to us without temporary assistance.
−Removed: We monitored key metrics as early warning indicators of financial hardship, including changes in weekly unemployment claims, enrollment in auto-debit payments, requests for new forbearances, enrollment in hardship payment plans, and early delinquency metrics.
−Removed: As a result of the negative impact on employment from COVID-19, our customers experienced higher levels of financial hardship, which initially led to elevated levels of forbearance, as we provided disaster forbearance to borrowers who requested it.
−Removed: We saw higher levels of delinquencies and defaults as borrowers who had received disaster forbearance from us re-entered repayment status.
−Removed: For the year ended December 31, 2022, we considered the multiple economic forecasts in estimating our allowance for credit losses.
−Removed: We could experience significant changes in our allowance for credit losses if there are significant changes in the rate of occurrence and the severity of infections from COVID-19 increases.
−Removed: The process for determining our allowance contemplates material external factors that may require management adjustments.
−Removed: We used Moody’s Analytics economic forecasts in estimating the losses on our loan portfolio.
−Removed: Historically, we have utilized disaster forbearance to assist borrowers affected by material events, typically federally-declared disasters, including hurricanes, wildfires, floods, and the COVID-19 pandemic.
−Removed: 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 later in this Form 10-K.
−Removed: In accordance with regulatory guidance that encouraged lenders to work constructively with customers who were affected by COVID-19, we invoked this same disaster forbearance program to assist our customers through COVID-19 and offered this program across our operations.
−Removed: During 2021, we ended all COVID-19 disaster forbearances and at December 31, 2022, there were no loans under a disaster forbearance program related to COVID-19.
−Removed: We continue to adapt and evolve our customer care and collections practices to meet the needs of our customers, while operating in a safe and sound manner.
−Removed: See also “— Financial Results” in this section for further discussion of the impact of the COVID-19 pandemic on students returning to college campuses.
−Removed: Our Team Members
−Removed: Our team members have been affected by COVID-19 in many ways, including sickness, disruptions due to unexpected school and day-care closings, family underemployment or unemployment, and learning how to work remotely with, in some cases, new tools and technology to learn and support that work.
−Removed: Our goal has been to support our team members during the present uncertainty while meeting the needs of our customers and providing business continuity.
−Removed: In April 2022, we returned to our offices, with most team members working under a hybrid model of some days in the office and other days working from home.
−Removed: We have robust pandemic and business continuity plans that include our business units and technology environments.
−Removed: When COVID-19 was declared a pandemic, we activated our pandemic response plan.
−Removed: Sallie Mae’s response was initiated by the Incident Management Office (“IMO”), a group of key stakeholders representing members of senior and executive management.
−Removed: The IMO directed the activities of the operational response group to address the
−Removed: 2022 Form 10-K — SLM CORPORATION 53
−Removed: health and safety of our workforce, assist customers, sustain business operations, and address the management of other ongoing pandemic activities.
−Removed: In response to a growing infected population across the United States in 2020, we executed plans for social-distancing and mask wearing in our facilities, implemented work-from-home contingencies and instituted a voluntary vaccination incentive program for our team members.
−Removed: As the impact of the virus progressed, we expanded remote-working capabilities for our teams and consulted with regulators about our plans.
−Removed: We closely monitored directives and guidance from both the Centers for Disease Control and Prevention and local health departments to ensure compliance with any requirements.
−Removed: We also completed a series of additional steps to appropriately ensure data security through compliance with our telecommuting policy.
−Removed: The policy is designed to create a secure at-home work environment that protects our customers’ information and transactions while also providing the necessary technology capabilities to enable effective remote-working for our team members.
−Removed: In addition, we enhanced the functionality of our chatbot, IVR, mobile app, and website features to help our customers manage their accounts.
−Removed: Most team members currently are working on a hybrid model of some days in the office and the other days working from home.
−Removed: Liquidity and Capital
−Removed: Over the course of 2019, we significantly increased our overall liquidity position for risk management purposes and enhanced our liquidity stress testing regime.
−Removed: As a result of these efforts, we currently believe our liquidity position is stable and we expect to be able to fund our business operations.
−Removed: Because of the disruptions in the capital markets that occurred at the onset of the pandemic, in the first quarter of 2020 we implemented our Contingency Funding Plan, which entailed monitoring and reporting to management our liquidity position and the health of deposit and asset-backed securities markets.
−Removed: In times of financial distress, we often see a flight to quality, where investors seek safer places to invest their money, such as insured bank deposits and in securities such as U.S.
−Removed: Treasuries and government- sponsored debt and mortgage-backed securities.
−Removed: We saw similar trends in the marketplace during this crisis and expect that as a well-capitalized insured depository institution, we will have ample access to deposit markets.
−Removed: As pandemic-related capital market disruptions abated, we de-activated the Contingency Funding Plan in October 2020, but have continued to remain watchful for signs of renewed market stress as the pandemic evolves.
−Removed: Maintaining our focus on earnings quality as well as prudent liquidity management, we actively managed the cost of our retail deposits downward in response to the rapid downturn in short-term interest rates in 2020.
−Removed: As the economy recovered and inflation increased in 2022, we saw deposit rates increase as market rates began to rise.
−Removed: In addition, we were able to access the brokered deposit, asset-backed security, and unsecured debt markets throughout 2021 and 2022.
−Removed: We manage our capital position through a rigorous capital stress testing regime.
−Removed: As a result, we believe that, given the quality of our Private Education Loan portfolio, we have sufficient capital to withstand our current estimate in the event of a downturn.
−Removed: If circumstances surrounding COVID-19 change in a significantly more adverse way, however, it is possible our liquidity and regulatory capital position could be materially and adversely affected, which could materially and adversely impact our business operations and our overall financial condition.
−Removed: See “Liquidity and Capital Resources” and “Borrowings” in Item 7 for additional discussion of our capital and funding activities.
−Removed: Regulatory agencies have also provided regulatory capital relief to financial institutions as a result of the crisis.
−Removed: See “ — Financial Results” for additional discussion regarding the regulatory relief.
−Removed: We are regulated by the FDIC, the UDFI, and the CFPB.
−Removed: These agencies have encouraged regulated entities to work constructively with customers affected by COVID-19 and have provided guidance regarding loan modifications.
−Removed: The federal banking regulators have stated that working with customers who are current on existing loans, either individually or as part of a program for creditworthy customers who are experiencing short-term financial or operational problems as a result COVID-19, generally would not be considered TDRs (as hereinafter defined).
−Removed: For modification programs, such as forbearance, designed to provide short-term relief for current customers affected by COVID-19, we may presume that customers who are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining TDR status, and thus no further TDR analysis was required for each loan modification in the program.
−Removed: In addition, the federal banking regulators have indicated their examiners will exercise judgment in reviewing loan modifications, including TDRs, and will not automatically adversely risk-rate credits that are affected by COVID-19, including those considered TDRs.
−Removed: Regardless of whether modifications result in loans being considered TDRs or adversely classified, the federal banking regulators have indicated their examiners will not criticize prudent efforts to modify the terms of existing loans to affected customers.
−Removed: 54 SLM CORPORATION — 2022 Form 10-K
The following discussion and analysis presents a review of our business and operations as of and for the year ended December 31, 2023.
16 unchanged sentences
Consequently, our operating results may be significantly affected by whether we choose to sell loans and recognize current gains on sale or continue to hold or finance loans, thereby retaining some or all the net interest income from those loans.
−Removed: In 2022, we recognized $328 million in gains from the sale of approximately $3.34 billion of our Private Education Loans, including $3.13 billion of principal and $217 million in capitalized interest, to unaffiliated third-parties.
+Added: In 2023, we recognized $164 million in gains from the sale of approximately $3.15 billion of our Private Education Loans, including $2.93 billion of principal and $226 million in capitalized interest, to an unaffiliated third party.
For additional information, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment.”
+Added: 2023 Form 10-K — SLM CORPORATION 47
Allowance for Credit Losses
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.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Credit Losses.” Allowances for credit losses are an important indicator of management’s perspective on the future performance of a loan portfolio.
+Added: See “ — Critical Accounting Policies and Estimates — Allowance for Credit Losses.” Allowances for credit losses are an important indicator of management’s perspective on the future performance of a loan portfolio.
Each quarter, management makes an adjustment to the allowance for credit losses to reflect its most up-to-date estimate of future losses by recording a charge against quarterly revenues known as provision expense.
1 unchanged sentence
The allowance for credit losses and provision expense rise in periods of high loan origination, when future charge-offs are expected to increase, and fall when future charge-offs are expected to decline.
−Removed: We bear the full credit exposure on our Private Education Loans and Credit Cards.
+Added: We bear the full credit exposure on our Private Education Loans.
Losses on our Private Education Loans are affected by risk characteristics such as loan status (in-school, grace, forbearance, repayment, and delinquency), loan seasoning (number of months in active repayment), underwriting criteria (e.g., credit scores), presence of a cosigner, servicing and collections practices, and the current economic environment.
−Removed: See “CREDIT RISK - Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial position, results of operations, and/or cash flows .
−Removed: ” in Item 1A.
+Added: See “CREDIT RISK - Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial condition, results of operations, and/or cash flows .
+Added: ” in Part I, Item 1A.
“Risk Factors” for additional information.
1 unchanged sentence
As a larger proportion of our Private Education Loan portfolio enters full principal and interest repayment in the coming years, we would expect the amount of charge-offs to increase.
−Removed: 2022 Form 10-K — SLM CORPORATION 55
Our allowance for credit losses for FFELP Loans and related periodic provision expense are small because we generally bear a maximum of three percent loss exposure due to the federal guarantee on such loans.
5 unchanged sentences
Management focuses on delinquencies as well as the progression of loans from early to late stage delinquency as a key metric in estimating the allowance for credit losses and tailoring its future collections strategies.
−Removed: We manage our charged-off loans through a mix of in-house collectors, third-party collectors, and sales to third-parties.
+Added: 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.
Operating Expenses
11 unchanged sentences
These deposits can be term or liquid deposits.
−Removed: Our term brokered deposits have terms as long as seven years.
−Removed: Interest rates on a portion of our long-term deposits are swapped into one-month LIBOR.
−Removed: This structure has the effect of transforming the interest rate characteristics of these deposits to match the index on which the majority of our assets reset, thereby minimizing our exposure to interest rate risk.
+Added: Our term brokered deposits have terms from three months to ten years.
Retail deposits are sourced through a direct banking platform and serve as an important source of diversified funding.
Brokered deposits are sourced through a network of brokers and provide a stable source of funding.
−Removed: 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.
−Removed: We diversify our funding sources with deposits from Educational 529 savings plan and Health Savings plans.
+Added: In addition, we accept certain
+Added: 48 SLM CORPORATION — 2023 Form 10-K
+Added: deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors.
+Added: We diversify our funding sources with deposits from Educational 529 savings plans and Health Savings plans.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.6 billion of our deposit totals as of December 31, 2023.
5 unchanged sentences
Borrowings under our Secured Borrowing Facility are accounted for as secured financings.
−Removed: 56 SLM CORPORATION — 2022 Form 10-K
LIBOR Transition
Following announcements by the UKFCA, which regulates LIBOR, and ICE Benchmark Administration Limited, the administrator of LIBOR, publication of 1-week and 2-month USD LIBOR and all tenors for other currencies ceased after December 31, 2021.
−Removed: While publication of the remaining USD settings is expected to cease after June 30, 2023, U.S.
−Removed: banking and other global financial services regulators directed regulated institutions to cease entering into new LIBOR-based contracts as soon as practicable and in any event by the end of 2021.
+Added: Publication of the remaining USD settings ceased after June 30, 2023 (the “LIBOR Cessation Date”).
In 2020, we launched a formal cross-functional replacement project with the goal of ensuring a smooth transition to a replacement index for our LIBOR-based assets and obligations with minimal negative impact on our customers, investors, and the Company’s business, financial condition, and results of operations.
−Removed: The Chief Financial Officer and the project team monitor developments, assess impacts, propose plans and, with the approval of an executive committee, implement changes.
−Removed: The Chief Financial Officer and/or project team reports status regularly to our Board of Directors.
In 2020, we began accepting certain deposits based on SOFR.
1 unchanged sentence
In May 2022, we renewed the Secured Borrowing Facility with an index based on SOFR and, in the third quarter of 2022, we began issuing ABS that are indexed to SOFR.
−Removed: Substantially all our assets, liabilities, and off-balance sheet items referencing LIBOR are comprised of Private Education Loans originated before April 2021, deposits, variable-rate ABS issued before 2022, and derivatives.
−Removed: In addition, our Series B Preferred Stock is indexed to LIBOR.
−Removed: We plan to transition these exposures to LIBOR by changing them to an alternative reference rate, either through modification or replacement, by June 30, 2023.
−Removed: Approximately $192 million of our variable-rate ABS (those issued before November 2017) do not have fallback provisions for an alternative reference rate and we intend to rely upon the safe harbors provided by recently passed federal legislation to transition these ABS to an alternative reference rate.
−Removed: Generally, the safe harbors will shield parties from liability and damages for transitioning certain USD LIBOR-indexed contracts (generally, those that do not have provisions for an alternative reference rate) to a benchmark replacement rate based on SOFR and selected by the Federal Reserve Board.
−Removed: We have evaluated the potential basis risk associated with a mismatch in variable-rate assets and liabilities, including any mismatches related to (i) legacy assets and liabilities that remain indexed to LIBOR up to June 2023 and newly issued assets and liabilities that are, or will be, indexed to SOFR and (ii) term SOFR-indexed assets and liabilities and average SOFR assets and liabilities.
−Removed: In all such cases, we have determined the basis risk is immaterial on an aggregate basis.
−Removed: The chart below depicts our current LIBOR exposure at December 31, 2022.
−Removed: 2022 Form 10-K — SLM CORPORATION 57
−Removed: As of December 31, 2022
−Removed: (dollars in thousands) LIBOR
−Removed: Private Education Loans $ 6,501,635
−Removed: FFELP Loans 513,839
−Removed: Available-for-sale investments 48,637
−Removed: Total Assets $ 7,064,111
−Removed: Deposits $ 1,872,647
−Removed: Private Education Loan term securitizations - no contractual fallback 192,366
−Removed: Private Education Loan term securitizations - alternative reference rate fallback 524,123
−Removed: Total Liabilities 2,589,136
−Removed: Total Equity (preferred stock) 251,070
−Removed: Total Liabilities and Equity $ 2,840,206
−Removed: Off-Balance Sheet:
−Removed: Pay LIBOR derivative notional $ 1,528,186
−Removed: Receive LIBOR derivative notional 1,314,660
−Removed: Total derivative notional 2,842,846
−Removed: Total Off-Balance Sheet $ 2,842,846
+Added: In the second quarter of 2023, our derivatives were transitioned by the CME and LCH into instruments on which the LIBOR coupon remained in effect until the first repricing date after the LIBOR Cessation Date.
+Added: In the third quarter of 2023, all our remaining assets, liabilities, and off-balance sheet items referencing LIBOR transitioned to reference SOFR plus the applicable spread adjustment on their respective first repricing dates after the LIBOR Cessation Date.
+Added: These items were comprised of Private Education Loans originated before April 2021, deposits, variable-rate ABS, derivatives, as well as our Series B Preferred Stock.
+Added: Approximately $76 million of our variable-rate ABS (those issued before November 2017) did not have fallback provisions for an alternative reference rate and we relied upon the safe harbors provided by federal legislation to transition these ABS rates from LIBOR to SOFR.
See Part I, Item 1A.
−Removed: “Risk Factors” in this Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.
+Added: “Risk Factors - INTEREST RATE RISK” in this Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.
Strategic Imperatives
4 unchanged sentences
We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work.
−Removed: We also continue to strengthen our risk and compliance function, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk.
+Added: We also continue to strengthen our risk and compliance functions, enhance and build upon our risk management framework, and assess and monitor enterprise-wide risk.
During 2023, we made the following progress on the above corporate strategic imperatives.
−Removed: Acquisition of Nitro College
−Removed: On March 4, 2022, we completed the acquisition of Nitro, which provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.
−Removed: The addition of Nitro brought innovative products, tools, and resources to help students and families confidently navigate their higher education journey.
−Removed: The acquisition of Nitro enhances future strategic growth opportunities for Sallie Mae and expands our digital marketing capabilities, reduces the cost to acquire customer accounts, and accelerates our progress to become a broader education solutions provider helping students to, through, and immediately after college.
−Removed: For additional information on this transaction, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Business Combination,” and Note 10, “Goodwill and Acquired Intangible Assets.”
−Removed: 2022 Loan Sales and 2022-A, 2022-B, and 2022-D Transactions
−Removed: During 2022, we sold $3.34 billion of our Private Education Loans, including $3.13 billion of principal and $217 million in capitalized interest, to unaffiliated third parties.
−Removed: The transactions qualified for sale treatment and removed
−Removed: 58 SLM CORPORATION — 2022 Form 10-K
−Removed: the balance of the loans from our balance sheet on the respective settlement dates.
−Removed: We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales.
−Removed: These sales resulted in our recognizing a gain of $328 million during the year ended December 31, 2022.
−Removed: For additional information regarding these transactions, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment” and Note 12, “Borrowings - Unconsolidated VIEs.”
+Added: Acquisition of Scholly
+Added: On July 21, 2023, we completed the previously announced acquisition of several key assets of Scholly, which is engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products that offer custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers.
+Added: The addition of Scholly assets will support our mission of providing students with the confidence needed to successfully navigate the higher education journey.
+Added: For additional information on this transaction, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Business Combinations,” and Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K.
+Added: 2023 Form 10-K — SLM CORPORATION 49
+Added: 2023-A Securitization
+Added: On March 15, 2023, we executed our $579 million SMB Private Education Loan Trust 2023-A term ABS transaction, which was accounted for as a secured financing.
+Added: We sold $579 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $572 million of gross proceeds.
+Added: The Class A and Class B notes had a weighted average life of 5.06 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.53 percent.
2023-C Securitization
2 unchanged sentences
The Class A and Class B notes had a weighted average life of 4.93 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.69 percent.
+Added: 2023 Loan Sales and 2023-B and 2023-D Transactions
+Added: In 2023, we recognized $164 million in gains from the sale of approximately $3.15 billion of our Private Education Loans, including $2.93 billion of principal and $226 million in capitalized interest, to an unaffliated third party.
+Added: The transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates.
+Added: We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales.
+Added: For additional information regarding these transactions, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment” and Note 12, “Borrowings - Unconsolidated VIEs” in this Form 10-K.
Secured Borrowing Facility
5 unchanged sentences
The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 15, 2025 (or earlier, if certain material adverse events occur).
−Removed: Disposition of Credit Card Business
−Removed: We plan to exit and sell our credit card business to focus resources on our core business strategies.
−Removed: We processed completed credit card applications received through the end of December 2022.
−Removed: At December 31, 2022, we had $29 million in Credit Card receivables in loans held for sale.
+Added: Sale of Credit Card Loan Portfolio
+Added: In May 2023, we sold our Credit Card loan portfolio to a third party.
+Added: This transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date.
+Added: We recorded a loss of $4 million related to the sale in the second quarter of 2023.
Share Repurchases under our Rule 10b5-1 Trading Plans
1 unchanged sentence
Business — Human Capital Resources and Talent Development” for a discussion regarding our mission-led culture.
−Removed: 2022 Form 10-K — SLM CORPORATION 59
+Added: 50 SLM CORPORATION — 2023 Form 10-K
Results of Operations
17 unchanged sentences
Gains (losses) on securities, net 3 (60) 39 63 105 (99) (254)
−Removed: Gains on derivatives and hedging activities, net — — 50 — — (50) (100)
Other income 84 67 45 17 25 22 49
2 unchanged sentences
Total operating expenses 619 551 519 68 12 32 6
−Removed: Acquired intangible assets amortization expense 8 — — 8 100 — —
+Added: Acquired intangible assets impairment and amortization expense 66 8 — 58 725 8 100
Restructuring expenses — — 1 — — (1) (100)
8 unchanged sentences
Declared dividends per common share $ 0.44 $ 0.44 $ 0.20 $ — — % $ 0.24 120 %
−Removed: 60 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 51
GAAP Consolidated Earnings Summary
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022
−Removed: For the year ended December 31, 2022, net income was $469 million, or $1.76 diluted earnings per common share, compared with net income of $1.16 billion, or $3.61 diluted earnings per common share, for the year ended December 31, 2021.
−Removed: The year-over-year decrease was primarily attributable to higher provisions for credit losses, decreases in gains on sales of loans, net, and other income, and higher operating expenses, which were offset by an increase in total net interest income.
+Added: For the year ended December 31, 2023, net income was $581 million, or $2.41 diluted earnings per common share, compared with net income of $469 million, or $1.76 diluted earnings per common share, for the year ended December 31, 2022.
+Added: 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 the current year period compared with the year-ago period are as follows:
−Removed: • Net interest income in 2022 increased by $94 million compared with the year-ago period primarily due to a 50-basis point increase in our net interest margin, which more than offset a $922 million reduction in average interest-earning assets.
−Removed: Our net interest margin increased in the current period from the year-ago period because of a combination of factors, including an $855 million reduction in low-yielding average cash and other short-term investments, and a $367 million increase in average taxable securities.
+Added: • Net interest income in 2023 increased by $73 million compared with the year-ago period 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.
+Added: Our net interest margin increased in the current period from the year-ago period because of the dramatic increase in interest rates over the past year.
+Added: When interest rates rise, the yield on our interest-earning assets typically increases faster than our cost of funds.
+Added: As such, as rates increased in 2023, we saw our net interest margin increase.
+Added: • Provision for credit losses in 2023 was $345 million, compared with $633 million in the year-ago period.
+Added: 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 a result of the change in our defaulted loan recovery process).
+Added: In the year-ago period, 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 $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.
+Added: 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.
+Added: • Gains on sales of loans, net, were $160 million in 2023, compared with $328 million in the year-ago period.
+Added: 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 the year-ago period, and lower sales premiums received in 2023 compared to the year-ago period, which were attributable to higher interest rates in 2023.
+Added: We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023.
+Added: • Gains (losses) on securities, net, were $3 million in gains in 2023, compared with a net loss of $60 million in the year-ago period.
+Added: The gains on securities, net, in 2023 were related to the changes in mark-to-fair value of our trading investments.
+Added: During 2022, we determined that an investment in non-marketable equity securities was impaired.
+Added: As such, we wrote down the value by $60 million in 2022 based upon an estimate of the value of these securities.
+Added: • Other income was $84 million in 2023, compared with $67 million in the year-ago period.
+Added: The increase in other income compared with the year-ago period was primarily the result of a $13 million increase in third-party servicing fees from the year-ago period and a $2 million increase in Private Education Loan late fees compared with the year-ago period.
+Added: • For the year ended December 31, 2023, total operating expenses were $619 million, compared with $551 million in the year-ago period.
+Added: 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.
+Added: • In 2023, we recorded $66 million in impairment and amortization of acquired intangible assets, compared with $8 million in the year-ago period.
+Added: 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.
+Added: This write-down occurred because we plan 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.
+Added: In 2023, we recorded $10 million in amortization expense of acquired intangible assets, compared to $8 million in the year-ago period.
+Added: 52 SLM CORPORATION — 2023 Form 10-K
+Added: in amortization expense is related to our acquisition of several key assets of Scholly in the third quarter of 2023.
+Added: For additional information, see Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K.
+Added: • Income tax expense for the year ended December 31, 2023 was $197 million, compared with $162 million in the year-ago period.
+Added: The effective tax rate decreased in 2023 to 25.3 percent from 25.6 percent in the year-ago period.
+Added: The decrease in the effective rate for 2023 was primarily attributable to an increase in tax credits utilized in the year.
+Added: Year Ended December 31, 2022 Compared with Year Ended December 31, 2021
+Added: For the year ended December 31, 2022, net income was $469 million, or $1.76 diluted earnings per common share,
+Added: compared with net income of $1.16 billion, or $3.61 diluted earnings per common share, for the year ended December 31,
+Added: The year-over-year decrease was primarily attributable to higher provisions for credit losses, decreases in gains on
+Added: sales of loans, net, and other income, and higher operating expenses, which were offset by an increase in total net
+Added: interest income.
+Added: The primary contributors to each of the identified drivers of change in net income for 2022 compared with 2021 are as follows:
+Added: • Net interest income in 2022 increased by $94 million compared with 2021 primarily due to a 50-basis point increase in our net interest margin, which more than offset a $922 million reduction in average interest-earning assets.
+Added: Our net interest margin increased in 2022 from 2021 because of a combination of factors, including an $855 million reduction in low-yielding average cash and other short-term investments, and a $367 million increase in average taxable securities.
Historically, the yields on interest-earnings assets reprice more quickly than our cost of funds.
As such, as rates increased in 2022, the yields on our interest-earning assets increased 111 basis points, while the cost of our interest-bearing liabilities only increased 63 basis points, compared with 2021.
−Removed: The higher level of cash and other short-term investments in 2021 was primarily the result of the $4.2 billion Private Education Loan sale that occurred in 2021.
−Removed: • Provision for credit losses in 2022 was $633 million, compared with a negative provision of $33 million in the year-ago period.
+Added: The higher level of cash and other short-term investments in 2021 was primarily the result of $4.2 billion in Private Education Loan sales that occurred in 2021.
+Added: • Provision for credit losses in 2022 was $633 million, compared with a negative provision of $33 million in 2021.
During 2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to $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.
−Removed: We expect the lack of tenured collections staff and operational challenges to persist into 2023 and, to a lesser extent, 2024.
“Gap year” loans refer to loans to borrowers who took a “gap year” during the COVID-19 pandemic and entered full principal and interest repayment status starting in late 2021 and early 2022.
Losses on these “gap year” loans were higher than expected and contributed to the higher provision expense recorded in 2022 to cover the higher-than-expected losses.
−Removed: In the year-ago period, the provision for credit losses was favorably affected by improved economic forecasts in 2021 and faster prepayments speeds.
+Added: In 2021, the provision for credit losses was favorably affected by improved economic forecasts in 2021 and faster prepayments speeds.
In addition, during the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans.
The faster estimated prepayment speeds reflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model in the first quarter of 2021.
−Removed: • Gains on sales of loans, net, were $328 million in 2022, compared with $548 million in the year-ago period.
−Removed: Higher interest rates in 2022 compared with 2021 resulted in the amount the buyers were willing to pay on our loans in 2022 to decrease compared with the year-ago period.
−Removed: The decrease in gains on sales of loans, net, also was the result of $90 million less in Private Education Loan sales in 2022 when compared with the year-ago period.
−Removed: • Gains (losses) on securities, net was a loss of $60 million in 2022, compared with a gain of $39 million in the year ago period.
+Added: • Gains on sales of loans, net, were $328 million in 2022, compared with $548 million in 2021.
+Added: Higher interest rates in 2022 compared with 2021 resulted in the amount the buyers were willing to pay on our loans in 2022 to decrease compared with 2021.
+Added: The decrease in gains on sales of loans, net, also was the result of $90 million less in Private Education Loan sales in 2022 when compared with 2021.
+Added: • Gains (losses) on securities, net, was a loss of $60 million in 2022, compared with a gain of $39 million in 2021.
During 2022, we determined that an investment in non-marketable equity securities was impaired.
1 unchanged sentence
The gain recorded in 2021 was primarily the result of a $35 million increase in the valuation of the same non-marketable securities.
−Removed: • Other income was $67 million in 2022, compared with $45 million in the year-ago period.
−Removed: Other income in 2021 was negatively affected by a $5 million reduction in the tax indemnification receivable related to uncertain tax positions and by a $3 million loss from fees related to the redemption of $200 million of our 5.125 percent unsecured senior notes due in April 2022.
−Removed: Also, in the year ended December 31, 2022, we recorded a $10 million increase in third-party servicing fees and a $4 million increase in Private Education Loan late fees versus the year-ago period.
+Added: • Other income was $67 million in 2022, compared with $45 million in 2021.
+Added: Other income in 2021 was negatively affected by a $5 million reduction in the tax indemnification receivable related to uncertain tax positions and by a $3 million loss from fees related to the redemption of $200 million of our 5.125 percent unsecured senior notes
2023 Form 10-K — SLM CORPORATION 53
−Removed: • For the year ended December 31, 2022, total operating expenses were $551 million, compared with $519 million in the year-ago period.
+Added: due in April 2022.
+Added: Also, in the year ended December 31, 2022, we recorded a $10 million increase in third-party servicing fees and a $4 million increase in Private Education Loan late fees versus 2021.
+Added: • For the year ended December 31, 2022, total operating expenses were $551 million, compared with $519 million in 2021.
The increase in total operating expenses was primarily driven by transaction costs related to our acquisition of Nitro, higher personnel costs, and initiative spending.
• In 2022, we recorded $8 million in amortization of acquired intangible assets related to our acquisition of Nitro in the first quarter of 2022.
−Removed: For additional information, see Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets.”
−Removed: • Income tax expense for the year ended December 31, 2022 was $162 million, compared with $380 million in the year-ago period.
−Removed: The effective tax rate increased in 2022 to 25.6 percent from 24.7 percent in the year-ago period.
−Removed: The increase in the effective rate for 2022 was primarily due to an increase in the valuation allowance against future tax benefits, and lower-than-expected tax credits in 2022.
−Removed: Year Ended December 31, 2021 Compared with Year Ended December 31, 2020
−Removed: For the year ended December 31, 2021, net income was $1.16 billion, or $3.61 diluted earnings per common share, compared with net income of $881 million, or $2.25 diluted earnings per common share, for the year ended December 31, 2020.
−Removed: The year-over-year increase was primarily attributable to increases in gains on sales of loans, net, other income, lower provisions for credit losses, and lower operating expenses, which were offset by a decline in total net interest income.
−Removed: The primary contributors to each of the identified drivers of change in net income for 2021 compared with 2020 are as follows:
−Removed: • Net interest income in 2021 decreased by $85 million compared with 2020 primarily due to a $2.1 billion reduction in average loans outstanding.
−Removed: The decline in average loans outstanding was due to the sale of our Personal Loan portfolio that occurred in the third quarter of 2020 and the sale of $4.2 billion of Private Education Loans in 2021.
−Removed: Net interest margin in 2021 was unchanged from 2020 as the lower yield on our interest earning assets was offset by lower cost of funds.
−Removed: • Provisions for credit losses for the year ended December 31, 2021 decreased by $126 million compared with 2020.
−Removed: This decrease of $126 million in 2021 compared with 2020 was primarily the result of improving economic forecasts in 2021 and faster prepayment speeds.
−Removed: During the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans.
−Removed: These faster estimated prepayment speeds during the two-year reasonable and supportable period reflect the significant improvement in economic forecasts, as well as the implementation of an updated prepayment speed model.
−Removed: In the fourth quarter of 2021, we increased our long-term estimate of prepayment speeds to reflected higher long-term prepayment experience.
−Removed: Partially offsetting these benefits were additional provisions to reflect the adoption of our credit administration practices changes and other management overlays.
−Removed: • Gains on sales of loans, net, were $548 million in 2021, compared with $238 million in 2020.
−Removed: The increase in gains on sales of loans was primarily the result of $1.14 billion in additional Private Education Loan sales in 2021 when compared with 2020 and improved pricing on the sale of those loans in 2021 compared with 2020.
−Removed: • Gains on derivatives and hedging activities, net, decreased $50 million in 2021 compared with 2020.
−Removed: The year ended December 31, 2020 was favorably impacted by a significant decrease in interest rates caused by the economic fallout from the COVID-19 pandemic, which made our receive fixed/pay variable interest rate swaps that are not designated as accounting hedges, but are economic hedges, to increase in value.
−Removed: • Gains (losses) on securities, net was a gain of $39 million in 2021, compared with a gain of $4 million in 2020.
−Removed: The gain recorded in 2021 was primarily the result of a $35 million increase in the valuation of our investment in non-marketable securities.
−Removed: • Other income increased $6 million in 2021 from 2020.
−Removed: The increase in other income compared with 2020 was primarily the result of a $26 million increase in third-party servicing fees, offset by an $11 million gain from the sale of our former Upromise subsidiary recognized in 2020 and $6 million in lower revenue related to our former Upromise subsidiary.
−Removed: In addition, other income during the year ended December 31, 2021 was negatively affected by a $3 million loss from fees related to the redemption of $200 million of our 5.125 percent unsecured senior notes due in April 2022.
−Removed: Third-party servicing fees increased in 2021 because we sold $4.24 billion in loans in 2021 where we retained servicing rights.
−Removed: 62 SLM CORPORATION — 2022 Form 10-K
−Removed: • For the year ended December 31, 2021, total operating expenses were $519 million, compared with $538 million in 2020.
−Removed: The decrease in total operating expenses was primarily driven by lower personnel costs as a result of the corporate reorganization that occurred in the second half of 2020, the divestiture of our former Upromise subsidiary in 2020, the sale of the Personal Loan portfolio in 2020, and lower initiative spending and improved servicing efficiencies in 2021.
−Removed: • In the third quarter of 2020, we implemented a restructuring plan that resulted in our recording a $26 million restructuring charge in the year ended December 31, 2020.
−Removed: These expenses were primarily related to involuntary termination benefit arrangements, as well as certain other costs, such as legal and consulting fees, that were incremental and incurred as a direct result of our 2020 restructuring plan.
−Removed: There were de minimis restructuring expenses recorded for the year ended December 31, 2021.
+Added: For additional information, see Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K.
• Income tax expense for the year ended December 31, 2022 was $162 million, compared with $380 million in 2021.
The effective tax rate increased in 2022 to 25.6 percent from 24.7 percent in 2021.
−Removed: The increase in the effective tax rate was primarily driven by higher state income tax expense related to an increase in our uncertain tax positions.
+Added: The increase in the effective rate for 2022 was primarily due to an increase in the valuation allowance against future tax benefits, and lower-than-expected tax credits in 2022.
Non-GAAP “Core Earnings”
15 unchanged sentences
Non-GAAP “Core Earnings” are not a substitute for reported results under GAAP.
−Removed: We provide a non-GAAP “Core Earnings” basis of presentation because (i) earnings per share computed on a non-GAAP “Core Earnings” basis is one of several measures we utilize in establishing management incentive compensation, and (ii) we believe it better reflects the financial results for derivatives that are economic hedges of interest rate risk, but which do not qualify for hedge accounting treatment.
+Added: We provide a non-GAAP “Core Earnings” basis of presentation because (i) earnings per share computed on a non-GAAP “Core Earnings” basis is one of several measures we utilize to evaluate management performance and allocate corporate resources, and (ii) we believe it better reflects the financial results for derivatives that are economic hedges of interest rate risk, but which do not qualify for hedge accounting treatment.
GAAP provides a uniform, comprehensive basis of accounting.
1 unchanged sentence
The following table shows the amount in “Gains (losses) on derivatives and hedging activities, net” that relates to the interest reclassification on the derivative contracts.
−Removed: 2022 Form 10-K — SLM CORPORATION 63
+Added: There were no gains (losses) on derivative and hedging activities in the year ended December 31, 2023.
+Added: 54 SLM CORPORATION — 2023 Form 10-K
Years Ended December 31,
11 unchanged sentences
Net impact of derivative accounting (1)
−Removed: 248 23,216 (10,164)
−Removed: Net tax expense (benefit) (2)
−Removed: 60 5,615 (2,481)
+Added: Net tax expense (2)
Total non-GAAP “Core Earnings” adjustments to GAAP — 188 17,601
7 unchanged sentences
(2) Non-GAAP “Core Earnings” tax rate is based on the effective tax rate at the Bank, where the derivative instruments are held.
−Removed: The following table reflects our provisions for credit losses and total portfolio net charge-offs:
−Removed: Years Ended December 31,
−Removed: (dollars in thousands) 2022 2021 2020
−Removed: Provisions for credit losses $ 633,453 $ (32,957) $ 93,133
−Removed: Total portfolio net charge-offs (389,502) (200,762) (216,036)
−Removed: 64 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 55
Financial Condition
6 unchanged sentences
FFELP Loans 574,218 7.19 662,194 4.62 718,186 3.43
−Removed: Personal Loans — — — — 582,552 12.43
Credit Cards 11,096 14.02 28,547 5.10 14,982 4.67
15 unchanged sentences
(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.
−Removed: 2022 Form 10-K — SLM CORPORATION 65
+Added: 56 SLM CORPORATION — 2023 Form 10-K
Rate/Volume Analysis - GAAP
29 unchanged sentences
(2) Includes loans in deferment or forbearance.
−Removed: 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.
−Removed: 66 SLM CORPORATION — 2022 Form 10-K
+Added: 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).
+Added: 2023 Form 10-K — SLM CORPORATION 57
As of December 31, 2022
(dollars in thousands) Private
−Removed: Cards Total Loans Held for Investment
+Added: Loans Total Loans
Total loan portfolio:
10 unchanged sentences
(2) Includes loans in deferment or forbearance.
−Removed: 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.
+Added: 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).
As of December 31, 2021
12 unchanged sentences
(1) Loans for customers still attending school and who are not yet required to make payments on the loans.
−Removed: 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 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.
−Removed: For further discussion, see “— Impact of COVID-19 on Sallie Mae — Financial Results.”
−Removed: (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.
−Removed: For further discussion, see “— Impact of COVID-19 on Sallie Mae — Financial Results.”
(2) Includes loans in deferment or forbearance.
−Removed: 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.
−Removed: 2022 Form 10-K — SLM CORPORATION 67
+Added: 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).
+Added: 58 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2020
(dollars in thousands) Private
−Removed: Loans Personal
Cards Total Loans Held for Investment
10 unchanged sentences
(1) Loans for customers still attending school and who are not yet required to make payments on the loans.
+Added: 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.
+Added: For further discussion, see “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool .”
+Added: (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.
+Added: For further discussion, see “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool .”
(3) Includes loans in deferment or forbearance.
−Removed: 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.
+Added: 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).
As of December 31, 2019
1 unchanged sentence
Loans Personal
−Removed: Loans Total Loans Held for Investment
+Added: Cards Total Loans
Total loan portfolio:
10 unchanged sentences
(2) Includes loans in deferment or forbearance.
−Removed: 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.
−Removed: 68 SLM CORPORATION — 2022 Form 10-K
+Added: 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).
+Added: 2023 Form 10-K — SLM CORPORATION 59
Average Loans Held for Investment Balances (net of unamortized premium/discount)
2 unchanged sentences
FFELP Loans 574,218 3 662,194 3 718,186 3
−Removed: Personal Loans — — — — 582,552 3
Credit Cards (1)
+Added: — — — — 14,982 —
Total portfolio $ 21,613,919 100 % $ 21,238,931 100 % $ 21,701,229 100 %
+Added: (1) Credit Card loans were transferred to loans held-for-sale at September 30, 2022 and subsequently sold in May 2023.
Loans Held for Investment, Net — Activity
1 unchanged sentence
(dollars in thousands) Private
−Removed: Cards Total Loans Held for Investment, net
+Added: Loans Total Loans
+Added: Held for Investment, net
Beginning balance $ 19,019,713 $ 607,155 $ 19,626,868
7 unchanged sentences
Allowance 18,526 (1,223) 17,303
−Removed: Transfer to loans held-for-sale — — (28,905) (28,905)
Repayments and other (2,375,342) (61,597) (2,436,939)
2 unchanged sentences
(dollars in thousands) Private
−Removed: Cards Total Loans Held for Investment, net
+Added: Cards Total Loans
+Added: Investment, net
Beginning balance $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283
7 unchanged sentences
Allowance (194,654) 633 2,281 (191,740)
−Removed: Transfer from loans held-for-sale 25,040 — — 25,040
+Added: Transfer to loans held-for-sale — — (28,905) (28,905)
Repayments and other (2,438,799) (49,545) (78,955) (2,567,299)
Ending balance $ 19,019,713 $ 607,155 $ — $ 19,626,868
−Removed: 2022 Form 10-K — SLM CORPORATION 69
+Added: 60 SLM CORPORATION — 2023 Form 10-K
Year Ended December 31, 2021
(dollars in thousands) Private
−Removed: Loans Personal
−Removed: Cards Total Loans Held for Investment, net
+Added: Cards Total Loans
+Added: Investment, net
Beginning balance $ 18,436,968 $ 735,208 $ 10,967 $ 19,183,143
−Removed: Day 1 CECL adjustment to allowance (1,060,830) (2,852) (79,183) (188) (1,143,053)
−Removed: Balance at January 1, 2020 21,835,685 780,964 904,460 3,630 23,524,739
Acquisitions and originations:
6 unchanged sentences
Allowance 196,868 300 (780) 196,388
−Removed: Transfer to loans held-for-sale (2,885,640) — — — (2,885,640)
+Added: Transfer from loans held-for-sale 25,040 — — 25,040
Repayments and other (2,357,023) (42,775) (50,232) (2,450,030)
4 unchanged sentences
“Loan consolidations to third parties” for the year ended December 31, 2023 total 11.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at December 31, 2023, or 4.9 percent of our total Private Education Loans held for investment portfolio at December 31, 2023, compared with the year-ago period of 16.2 percent of our Private Education Loan held for investment portfolio in full principal and interest repayment status, or 7.3 percent of our total Private Education Loans held for investment portfolio, respectively.
−Removed: The decrease in consolidations is attributable to higher interest rates in 2022 that made it less competitive for consolidators.
+Added: decrease in consolidations is attributable to higher interest rates in 2023 that made it less competitive for consolidators.
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.
−Removed: The “Repayments and other” category includes all scheduled repayments and returns, as well as voluntary prepayments, made on loans in repayment (including loans in full principal and interest repayment status) and also includes charge-offs.
+Added: 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.
Consequently, this category can be significantly affected by the volume of loans in repayment.
−Removed: Historically, voluntary prepayments and loan consolidations decrease when unemployment increases as borrowers and lenders look to conserve liquidity.
−Removed: While we saw a decrease in voluntary prepayments in the second quarter of 2020 (as compared to the first quarter of 2020) as a result of the COVID-19 pandemic, the decrease was not as significant as we expected based upon historical experience during higher unemployment periods and increased to closer to pre-pandemic levels in 2021.
−Removed: 70 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 61
Private Education Loan Originations
18 unchanged sentences
“Business - Our Business - Private Education Loans” for a further discussion.
−Removed: (2) 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.
+Added: (2) 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.
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.
1 unchanged sentence
(3) In December 2021, we discontinued offering our Parent Loan product.
−Removed: Applications for those loans received before the offering termination date were processed, with final disbursements under those loans occurring in mid-December 2022.
+Added: Applications for those loans received before the offering termination date were processed, and final disbursements under those loans occurred in February 2023.
(4) Represents the higher credit score of the cosigner or the borrower.
−Removed: 2022 Form 10-K — SLM CORPORATION 71
+Added: Private Education Loan Maturitie s
+Added: The following table summarizes the remaining maturities of our Private Education Loan portfolio.
+Added: As of December 31, 2023
+Added: (dollars in thousands) One year or less After one year to five years After five years to 15 years After 15 years Total
+Added: Fixed-rate $ 7,781 $ 332,489 $ 7,197,507 $ 6,448,014 $ 13,985,791
+Added: Variable-rate 23,535 620,602 4,602,806 1,793,110 7,040,053
+Added: Total Private Education Loans, gross $ 31,316 $ 953,091 $ 11,800,313 $ 8,241,124 $ 21,025,844
+Added: 62 SLM CORPORATION — 2023 Form 10-K
Allowance for Credit Losses
6 unchanged sentences
(420,095) (1,001) (421,096) (427,416) (613) (3,215) (431,244)
−Removed: Loan sales — — — — — — — —
Recoveries 46,368 — 46,368 41,737 — 5 41,742
23 unchanged sentences
Provisions for credit losses reported in consolidated statements of income $ 345,463 $ 633,453
−Removed: 72 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 63
Years Ended December 31, (dollars in thousands) Private
−Removed: Loans Personal Loans Credit Cards Total
+Added: Loans Credit Cards Total
Portfolio Private
12 unchanged sentences
Loan sale reduction to provision (66,460) — — (66,460) (161,793) — (42,916) — (204,709)
−Removed: Loans transferred to held-for-sale (205,669) — — — (205,669) — — — — —
+Added: Loans transferred (to) from held-for-sale 1,887 — — 1,887 (205,669) — — — (205,669)
Total provisions for credit losses (3)
3 unchanged sentences
(2) Represents fair value adjustments on loans sold.
−Removed: (3) For the year ended December 31, 2020, below is a reconciliation of the provision for credit losses reported in the consolidated statements of income.
+Added: (3) For the years ended December 31, 2021 and 2020, below is a reconciliation of the provision for credit losses reported in the consolidated statements of income.
When a new loan commitment is made, we record the CECL allowance as a liability for unfunded commitments by recording a provision for credit losses.
2 unchanged sentences
Provisions for Credit Losses Reconciliation
−Removed: Year Ended December 31,
+Added: Years Ended December 31,
(dollars in thousands) 2021 2020
7 unchanged sentences
Credit Cards 1,124 1,328
+Added: Total 1,144 (691)
Provisions for credit losses reported in consolidated statements of income $ (32,957) 93,133
−Removed: 2022 Form 10-K — SLM CORPORATION 73
−Removed: Year Ended December 31, (dollars in thousands) Private
−Removed: Loans Personal Loans Total
+Added: 64 SLM CORPORATION — 2023 Form 10-K
+Added: Year Ended December 31,
+Added: (dollars in thousands) Private
+Added: Loans Personal Loans Credit
Beginning balance $ 277,943 $ 977 $ 62,201 $ — $ 341,121
(208,978) (822) (74,313) (1) (284,114)
−Removed: Loan sales (1)
−Removed: (1,216) — — (1,216)
Recoveries 25,765 — 5,206 — 30,971
−Removed: Provisions for loan losses 169,287 980 74,317 244,584
+Added: Total provisions for credit losses 279,570 1,478 72,783 103 353,934
Ending balance $ 374,300 $ 1,633 $ 65,877 $ 102 $ 441,912
−Removed: (1) Represents fair value adjustments on loans sold.
Private Education Loan Allowance for Credit Losses
In establishing the allowance for Private Education Loan losses as of December 31, 2023, 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.
−Removed: Private Education Loans held for investment in full principal and interest repayment status were 45 percent of our total Private Education Loans held for investment portfolio at both December 31, 2022, and December 31, 2021.
+Added: Private Education Loans held for investment in full principal and interest repayment status were 43 percent of our total Private Education Loans held for investment portfolio at December 31, 2023, compared with 45 percent at December 31, 2022.
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 “—Allowance for Credit Losses,” “— Critical Accounting Policies and Estimates — Allowance for Credit Losses,” and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-K.
−Removed: 74 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 65
The table below presents our Private Education Loans held for investment portfolio delinquency trends.
23 unchanged sentences
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance 2.1 % 1.8 % 1.9 %
−Removed: (1) At December 31, 2020, the loans in the “in-school/grace/deferment” category above include $401 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or for other reasons, and who then received an extension of time from us to re-enroll before beginning their grace period.
−Removed: At December 31, 2020, the loans in the “in forbearance” category above include $30 million of Private Education Loans whose borrowers 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.
−Removed: At December 31, 2020, the loans in the “in repayment” category above include $609 million of Private Education Loans whose borrowers 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.
−Removed: This program ended in September 2021.
−Removed: For further discussion, see “— Impact of COVID-19 on Sallie Mae — Financial Results.”
(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).
1 unchanged sentence
(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.
−Removed: Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 3.8 percent at December 31, 2022 from 3.3 percent at December 31, 2021, and the forbearance rate decreased to 1.8 percent at December 31, 2022 from 1.9 percent at December 31, 2021.
−Removed: The increase in delinquencies and the reduction in forbearance at December 31, 2022, compared with the prior year, were due to a combination of factors, including our new credit administration practices changes that imposed additional requirements for those borrowers requesting forbearance, operational challenges in 2022, including a shortage and lack of tenured collections staff, and the cessation of the use of disaster forbearance related to COVID-19.
+Added: Delinquencies as a percentage of Private Education Loans (held for investment) in repayment increased to 3.9 percent at December 31, 2023 from 3.8 percent at December 31, 2022, and the forbearance rate increased to 2.1 percent at December 31, 2023 from 1.8 percent at December 31, 2022.
+Added: The increase in delinquencies in 2023 compared with 2022 was primarily attributable to new loan modification programs initiated in the fourth quarter of 2023 that require borrowers to remain in their respective delinquency buckets until three consecutive payments are made under the modified loan terms before being brought current.
+Added: The increase in delinquencies and reduction in forbearance at December 31, 2022, compared with 2021, were due to a combination of factors, including our new credit administration practices changes that imposed additional requirements for those borrowers requesting forbearance, operational challenges in 2022, including a shortage and lack of tenured collections staff, and the cessation of the use of disaster forbearance related to COVID-19.
We stopped providing COVID-19 related disaster forbearances in June 2021.
−Removed: See additional discussion in “ — Impact of COVID-19 on Sallie Mae — Customers and Credit Performance” and “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool.”
−Removed: 2022 Form 10-K — SLM CORPORATION 75
+Added: See additional discussion in “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool.”
+Added: 66 SLM CORPORATION — 2023 Form 10-K
The following table summarizes changes in the allowance for Private Education Loan (held for investment) losses.
15 unchanged sentences
Net charge-offs (373,727) (385,679) (200,097) (181,305) (183,213)
−Removed: Loan sales (2)
−Removed: — — — — (1,216)
Ending Balance $ 1,335,105 $ 1,353,631 $ 1,158,977 $ 1,355,844 $ 374,300
3 unchanged sentences
8.43 % 8.76 % 7.32 % 9.28 % — %
−Removed: Allowance as a percentage of the ending total loan balance 6.67 % 5.59 % 6.87 % 1.61 % 1.36 %
−Removed: Allowance as a percentage of the ending loans in repayment (4)
−Removed: 8.95 % 7.47 % 9.48 % 2.23 % 1.90 %
Allowance coverage of net charge-offs 3.57 3.51 5.79 7.48 2.04
15 unchanged sentences
(1) See Notes to Consolidated Financial Statements, Note 8, “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.
−Removed: (2) Represents fair value adjustments on loans sold.
−Removed: (3) Related metrics and ending balances for the years ended December 31, 2019 and 2018, respectively, are not available, as CECL had not yet been adopted, and the allowance for credit losses only covered expected losses over the next twelve months.
−Removed: (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.
−Removed: (5) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest payment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
+Added: (2) Related metrics and ending balances for the year ended December 31, 2019 are not available, as CECL had not yet been adopted, and the allowance for credit losses only covered expected losses over the next twelve months.
+Added: (3) 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).
+Added: (4) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest payment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance).
As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics.
2 unchanged sentences
and delinquency and forbearance percentages.
−Removed: 76 SLM CORPORATION — 2022 Form 10-K
−Removed: Charge-offs increased in the year ending December 31, 2022 compared with the year-ago period because of a combination of factors, including the previously announced credit administration practices changes the Company implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance, as well as a shortage and lack of tenured collections staff, and other operational challenges during much of 2022.
+Added: Charge-offs decreased in the year ending December 31, 2023 compared with the year-ago period because of a combination of factors, including improved staffing levels and new loan modification programs.
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.
−Removed: Also contributing to the increase in the full-year 2022 charge-offs compared with the prior year were $59 million in losses on loans whose borrowers took a “gap year” during the pandemic.
−Removed: “Gap year” loans refer to loans to borrowers who took a “gap year” during the COVID pandemic and entered full principal and interest repayment status starting in late 2021 and early 2022.
+Added: Also contributing to the increase in the full-year 2022 charge-offs compared with 2021 were $59 million in losses on loans whose borrowers took a “gap year” during the pandemic.
+Added: “Gap year” loans refer to loans to
+Added: 2023 Form 10-K — SLM CORPORATION 67
+Added: borrowers who took a “gap year” during the COVID-19 pandemic and entered full principal and interest repayment status starting in late 2021 and early 2022.
Losses on these “gap year” loans were higher than expected and contributed to the higher charge-offs in 2022.
Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool
−Removed: We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loan.
−Removed: These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
+Added: We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans.
+Added: 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 alternative.
Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers.
18 unchanged sentences
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.
−Removed: During COVID-19, our customers experienced higher levels of financial hardship, which initially led to higher levels of forbearance.
−Removed: 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.
−Removed: Beginning in June 2021, we stopped granting disaster forbearance in response to the COVID-19 pandemic.
−Removed: As borrowers in the various delinquency buckets exit disaster forbearance and begin to enter repayment, we expect elevated levels of losses on this
−Removed: 2022 Form 10-K — SLM CORPORATION 77
−Removed: segment of our customers.
−Removed: We expect that, left unabated, this deterioration in delinquency and default rates may persist until economic conditions return to pre-pandemic levels.
Management continually monitors our credit administration practices and may periodically modify these practices based upon performance, industry conventions, and/or regulatory feedback.
−Removed: In light of these considerations, we previously announced certain planned changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted.
−Removed: Prior to implementation of the previously announced changes, borrowers could receive consecutive forbearance grants without intervening payments of principal and interest, if they satisfied all eligibility requirements.
−Removed: We commenced testing in October 2019 for some of the previously announced planned changes on a very small percentage of our total portfolio and in March 2020 we began to expand the number of borrowers who would be subject to the new credit administration practices.
−Removed: However, due to the COVID-19 pandemic, in April 2020 we postponed our efforts so that we could be more flexible in dealing with our customers’ financial hardship.
−Removed: In October 2020, we re-initiated a multi-phased deployment of certain previously announced credit administration practices changes.
−Removed: In October 2021, we announced additional planned changes to our credit administration practices, which we implemented in December 2021.
+Added: In light of these considerations, we previously announced certain changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted.
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 disaster forbearance and certain assistance we grant to borrowers who are still in school do not apply toward the 12-month limit.
2 unchanged sentences
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.
−Removed: 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.
+Added: We also now count the
+Added: 68 SLM CORPORATION — 2023 Form 10-K
+Added: number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.
We also offer rate and term modifications to customers experiencing more severe hardship.
−Removed: Currently, we temporarily reduce the contractual interest rate on a loan to 4.0 percent for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan.
+Added: In the fourth quarter of 2023, we developed additional modification programs tailored to the financial condition of individual borrowers.
+Added: Pursuant to these additional modification programs, for our borrowers experiencing the most severe financial conditions, we currently may reduce the contractual interest rate on a loan to as low as 2.0 percent for the remaining life of the loan and also permanently extend the final maturity of the loan.
+Added: Other borrowers experiencing severe hardship may not require as much assistance, however, given their circumstances.
+Added: In those instances, we may reduce the contractual interest rate on a loan to a rate greater than 2.0 percent, and up to 8.0 percent, for a temporary period of two to four years, and in some instances may also permanently extend the final maturity of the loan.
+Added: When we give a borrower facing financial difficulty an interest rate reduction under our programs, we evaluate their ability to pay and provide customized repayment terms based upon their financial condition.
As part of demonstrating the ability and willingness to pay, the customer must make three consecutive monthly payments at the reduced payment to qualify for the program.
−Removed: The combination of the rate reduction and maturity extension helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate.
−Removed: We currently limit the granting of a permanent extension of the final maturity date of the loan under our loan modification program to one time over the life of the loan.
−Removed: We also currently permit two consecutive rate reductions to 4.0 percent so long as the borrower qualifies and makes three consecutive monthly payments at the reduced payment in connection with each rate reduction.
−Removed: We currently require 12 months of positive payment performance after the interest rate adjusts upward to its previous rate (at the end of the rate reduction periods) before the borrower may be eligible for a forbearance or certain other repayment alternatives, however.
+Added: We believe by tailoring the modification programs to the borrower’s current financial condition and not having a one size fits all approach, we increase the likelihood the borrower will be able to make the modified payments and avoid default.
+Added: This approach of giving different interest rate reductions to different borrowers experiencing more severe hardship also helps us better manage the overall assistance we provide to borrowers.
+Added: We currently limit the granting of a permanent extension of the final maturity date of a loan under our loan modification programs to one time over the life of the loan.
+Added: We also currently permit two consecutive rate reductions so long as the borrower qualifies and makes three consecutive monthly payments at the reduced payment in connection with each rate reduction.
We also now limit the number of interest rate reductions to twice over the life of the loan.
−Removed: Although we are not regulated by the Office of the Comptroller of the Currency, we have reviewed their student lending guidelines when considering and assessing our practices in certain areas.
−Removed: Now that we have implemented the previously announced credit administration practices changes, we believe our current collection and servicing practices generally align with the guidelines for student lending published by the Office of the Comptroller of the Currency.
While there are limitations to our estimate of the future impact of the various credit administration practices changes we have implemented, we expect that the credit administration practices described above, including the changes we implemented in 2021, will accelerate periodic defaults and will increase periodic defaults in our Private Education Loan held for investment portfolio.
For 2021, we increased our allowance for credit losses as a result of the new credit administration practices.
−Removed: In the fourth quarter of 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term.
−Removed: This change reflects our estimate that the elevated default rates experienced in the latter half of 2022 will continue into 2023 and then decline over time.
+Added: In 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term.
+Added: This change reflected our estimate that the elevated default rates experienced in the latter half of 2022 that continued into 2023 would eventually decline over time.
Among the measures that we have implemented and may modify further and expect may partly offset or moderate any acceleration of or increase in defaults will be greater focus on the risk assessment process to ensure borrowers are mapped to the appropriate program, better utilization of existing loss mitigation programs (e.g., GRP and rate modifications), the use of a program offering short-term payment reductions (permitting interest-only payments for up to six months) for certain early-stage delinquencies, and implementation of potential new risk mitigation and collection strategies.
−Removed: 78 SLM CORPORATION — 2022 Form 10-K
−Removed: The full impact of these changes to our collections practices described above will only be realized over the long term.
−Removed: When we calculated the allowance for credit losses under CECL at December 31, 2022, our loan loss reserves were significantly affected because we expect the life of loan defaults on our overall Private Education Loan portfolio to increase, in part as a result of the changes to our credit administration practices described above.
−Removed: We expect to learn more about how our borrowers are reacting to these changes to credit administration practices and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.
+Added: We expect to learn more about how our borrowers are reacting to changes in our credit administration practices and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.
As discussed above, we will continue to monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback.
5 unchanged sentences
Approximately 76 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status fewer than 25 months.
+Added: 2023 Form 10-K — SLM CORPORATION 69
As of December 31, 2023
14 unchanged sentences
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 1.21 % 0.35 % 0.19 % 0.13 % 0.18 % — % 2.06 %
−Removed: 2022 Form 10-K — SLM CORPORATION 79
As of December 31, 2022
14 unchanged sentences
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 1.07 % 0.28 % 0.17 % 0.12 % 0.17 % — % 1.81 %
+Added: 70 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2021
14 unchanged sentences
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 1.14 % 0.28 % 0.20 % 0.13 % 0.16 % — % 1.91 %
−Removed: 80 SLM CORPORATION — 2022 Form 10-K
Private Education Loans Held for Investment Types
13 unchanged sentences
(1) In December 2021, we discontinued offering our Parent Loan product.
−Removed: Applications for those loans received before the offering termination date continued to be processed, with final disbursements under those loans occurring until mid–December 2022.
+Added: Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in February 2023.
(2) In May 2022, we discontinued offering our Career Training loan product.
−Removed: Applications for those loans received before the offering termination date will continue to be processed, with final disbursements under those loans to occur until May 2023.
−Removed: (3) 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.
+Added: Applications for those loans received before the offering termination date continued to be processed, and final disbursements under those loans occurred in September 2023.
+Added: (3) 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).
+Added: 2023 Form 10-K — SLM CORPORATION 71
Accrued Interest Receivable
3 unchanged sentences
The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school, and the current expected credit losses on accrued interest that will be capitalized is included in our allowance for credit losses.
−Removed: The allowance for uncollectible interest shown below represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period.
−Removed: The allowance for this portion of interest is included in our allowance for credit losses.
−Removed: The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due portfolio for all periods presented.
Private Education Loans
8 unchanged sentences
December 31, 2019 $ 1,366,158 $ 2,390 $ 5,309
−Removed: (1) The allowance for uncollectible interest at December 31, 2022, 2021, and 2020 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2022 relates to $240 million of accrued interest receivable on those loans that are not expected to be capitalized).
−Removed: The accrued interest receivable that is expected to be capitalized ($937 million at December 31, 2022) is reserved in the allowance for credit losses.
−Removed: 2022 Form 10-K — SLM CORPORATION 81
+Added: (1) The allowance for uncollectible interest at December 31, 2023, 2022, 2021, and 2020 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2023, 2022, 2021, and 2020, relates to $151 million, $240 million, $240 million, and $196 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized.
+Added: The accrued interest receivable that is/was expected to be capitalized ($1.2 billion, $937 million, $947 million, and $973 million, respectively, at December 31, 2023, 2022, 2021, and 2020) is/was reserved for in the allowance for credit losses.
+Added: Related ending balances for the year ended December 31, 2019 are not available, as CECL had not yet been adopted, and the allowance for uncollectible losses only covered expected losses over the next twelve months.
+Added: 72 SLM CORPORATION — 2023 Form 10-K
Liquidity and Capital Resources
1 unchanged sentence
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.
−Removed: To achieve these objectives, we analyze and monitor our liquidity needs, 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.
−Removed: It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan sales under all but the most dire emergency conditions.
+Added: 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.
+Added: Interest-bearing deposits as of December 31, 2023 and December 31, 2022 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposit accounts (“MMDAs”), and retail and brokered CDs.
+Added: Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core.
+Added: These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.6 billion and $8.0 billion of our deposit total as of December 31, 2023 and December 31, 2022, respectively.
+Added: The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.
+Added: At December 31, 2023 and December 31, 2022, our sources of liquidity included liquid investments with unrealized losses of $128.9 million and $184.5 million, respectively.
+Added: 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.
Our liquidity management is governed by policies approved by our Board of Directors.
21 unchanged sentences
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
−Removed: 82 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 73
Average Balances
16 unchanged sentences
Our total deposits of $21.7 billion were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and other deposits at December 31, 2023, compared with total deposits of $21.4 billion, which were comprised of $9.9 billion in brokered deposits and $11.5 billion in retail and other deposits, at December 31, 2022.
−Removed: Interest bearing deposits as of December 31, 2022 and 2021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposit accounts (“MMDAs”), and retail and brokered CDs.
−Removed: Interest bearing deposits include deposits from Educational 529 and Health Savings plans that diversify our funding sources and add deposits we consider to be core.
+Added: Interest bearing deposits as of December 31, 2023 and 2022 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity MMDAs, and retail and brokered CDs.
+Added: Interest bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core.
These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.6 billion of our deposit total as of December 31, 2023, compared with $8.0 billion at December 31, 2022.
12 unchanged sentences
(1) Includes the effect of interest rate swaps in effective hedge relationships.
−Removed: 2022 Form 10-K — SLM CORPORATION 83
+Added: 74 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2023 and 2022, there were $478 million and $615 million, respectively, of deposits exceeding FDIC insurance limits.
32 unchanged sentences
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3 — %
−Removed: 84 SLM CORPORATION — 2022 Form 10-K
+Added: 2023 Form 10-K — SLM CORPORATION 75
Regulatory Capital
20 unchanged sentences
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.
+Added: In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S.
+Added: Basel III regulatory capital requirements.
+Added: The proposed changes to the regulatory capital requirements generally would amend or introduce approaches and methodologies that would apply to banking organizations with total consolidated assets of $100 billion or more or to banking organizations with significant trading activity.
+Added: The proposed rule therefore would not affect the Bank’s capital requirements or the calculation of its capital ratios.
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.
1 unchanged sentence
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.
−Removed: On January 1, 2022, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes.
−Removed: 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.
−Removed: 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.
+Added: On January 1 of 2023 and 2022, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes.
+Added: On January 1, 2024, an additional 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes.
+Added: On January 1, 2025, the remaining 25 percent of the adjusted transition amounts will be phased in for regulatory capital purposes, with the phased-in amounts included in regulatory capital at the beginning of the year.
+Added: 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
+Added: 76 SLM CORPORATION — 2023 Form 10-K
+Added: 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.
−Removed: 2022 Form 10-K — SLM CORPORATION 85
At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:
−Removed: 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
−Removed: (Dollars in thousands) January 1, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2022
+Added: Transition Amounts Phase-In
+Added: Amounts for the Year Ended Phase-In
+Added: Amounts for the Year Ended Remaining Adjusted Transition Amounts to be Phased-In
+Added: (Dollars in thousands) December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2023
Retained earnings $ 836,351 $ (209,088) $ (209,088) $ 418,175
5 unchanged sentences
The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated.
+Added: 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.
+Added: At December 31, 2023 and December 31, 2022, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $115 million and $160 million, net of tax of $37 million and $52 million, respectively.
+Added: The capital ratios would remain above the U.S.
+Added: Basel III well capitalized thresholds if the unrealized loss became fully recognized into capital.
Minimum Requirements Plus Buffer (1)(2)
13 unchanged sentences
(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.
−Removed: (3) For December 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022.
−Removed: 86 SLM CORPORATION — 2022 Form 10-K
+Added: (3) For December 31, 2023 and 2022, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed above that were phased in at the beginning of 2023 and 2022.
+Added: 2023 Form 10-K — SLM CORPORATION 77
The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC.
Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.
−Removed: The Bank declared $700 million, $1.4 billion, and $579 million in dividends to the Company 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.
+Added: The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein.
+Added: The Bank declared $550 million, $700 million, and $1.4 billion in dividends to the Company for the years ended December 31, 2023, 2022, and 2021, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends.
See Part I, Item 1.
5 unchanged sentences
The following table summarizes our secured borrowings at December 31, 2023 and 2022.
−Removed: For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings.”
+Added: For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in this Form 10-K.
As of December 31,
12 unchanged sentences
Short-term Borrowings
−Removed: Unsecured Debt
−Removed: On November 15, 2021, we redeemed our $200 million, 5.125 percent Senior Notes due April 5, 2022.
−Removed: The Senior Notes were redeemed at 101.39 percent of their principal amount, plus the accrued and unpaid interest thereon through the redemption date.
−Removed: As a result of the redemption, we recognized a $3 million loss on the transaction.
−Removed: At December 31, 2022, and December 31, 2021, there were no borrowings outstanding classified as short-term.
Secured Financings
4 unchanged sentences
The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until May 15, 2024.
−Removed: The scheduled amortization period, during which amounts
−Removed: 2022 Form 10-K — SLM CORPORATION 87
−Removed: outstanding under the Secured Borrowing Facility must be repaid, ends on May 16, 2024 (or earlier, if certain material adverse events occur).
+Added: The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 15, 2025 (or earlier, if certain material adverse events occur).
At both December 31, 2023 and December 31, 2022, there were no secured borrowings outstanding under the Secured Borrowing Facility.
−Removed: For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings.”
+Added: For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in this Form 10-K.
+Added: 78 SLM CORPORATION — 2023 Form 10-K
Short-term borrowings have a remaining term to maturity of one year or less.
9 unchanged sentences
2023 Transactions
+Added: On March 15, 2023, we executed our $579 million SMB Private Education Loan Trust 2023-A term ABS transaction, which was accounted for as a secured financing.
+Added: We sold $579 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $572 million of gross proceeds.
+Added: The Class A and Class B notes had a weighted average life of 5.06 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.53 percent.
+Added: On December 31, 2023, $591 million of our Private Education Loans, including $551 million of principal and $40 million in capitalized interest, were encumbered because of this transaction.
On August 16, 2023, we executed our $568 million SMB Private Education Loan Trust 2023-C term ABS transaction, which was accounted for as a secured financing.
1 unchanged sentence
The Class A and Class B notes had a weighted average life of 4.93 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.69 percent.
−Removed: At December 31, 2022, $635 million of our Private Education Loans, including $597 million of principal and $38 million in capitalized interest, were encumbered because of this transaction.
+Added: On December 31, 2023, $620 million of our Private Education Loans, including $579 million of principal and $41 million in capitalized interest, were encumbered because of this transaction.
2022 Transactions
−Removed: On May 19, 2021, we executed our $531 million SMB Private Education Loan Trust 2021-B term ABS transaction, which was accounted for as a secured financing.
−Removed: We sold $531 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $529 million of gross proceeds.
−Removed: The Class A and Class B notes had a weighted average life of 4.26 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.77 percent.
−Removed: At December 31, 2022, $410 million of our Private Education Loans, including $389 million of principal and $21 million in capitalized interest, were encumbered because of this transaction.
−Removed: On August 18, 2021, we executed our $527 million SMB Private Education Loan Trust 2021-D term ABS transaction, which was accounted for as a secured financing.
−Removed: We sold $527 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $525 million of gross proceeds.
−Removed: The Class A and Class B notes had a weighted average life of 4.22 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.69 percent.
−Removed: At December 31, 2022, $425 million of our Private Education Loans, including $403 million of principal and $22 million in capitalized interest, were encumbered because of this transaction.
−Removed: On November 9, 2021, we executed our $534 million SMB Private Education Loan Trust 2021-E term ABS transaction, which was accounted for as a secured financing.
+Added: On August 9, 2022, we executed our $575 million SMB Private Education Loan Trust 2022-C term ABS transaction, which was accounted for as a secured financing.
We sold $575 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $575 million of gross proceeds.
−Removed: The Class A and Class B notes had a weighted average life of 4.15 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.69 percent.
+Added: The Class A and Class B notes had a weighted average life of 4.69 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.76 percent.
At December 31, 2023, $543 million of our Private Education Loans, including $513 million of principal and $30 million in capitalized interest, were encumbered because of this transaction.
2 unchanged sentences
At December 31, 2023, $4.02 billion of our Private Education Loans, including $3.90 billion of principal and $128 million in capitalized interest, were encumbered as a result of these transactions.
−Removed: 88 SLM CORPORATION — 2022 Form 10-K
Other Borrowing Sources
10 unchanged sentences
We did not utilize this facility in the years ended December 31, 2023 and 2022.
+Added: 2023 Form 10-K — SLM CORPORATION 79
Contractual Loan Commitments
11 unchanged sentences
At December 31, 2023, 220 million shares were issued and outstanding and 36 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.
−Removed: See Notes to Consolidated Financial Statements, Note 14, “Stockholders’ Equity” for additional details.
+Added: See Notes to Consolidated Financial Statements, Note 14, “Stockholders’ Equity” in this Form 10-K for additional details.
Arrangements with Navient Corporation
−Removed: In connection with the Spin-Off, we entered into a Separation and Distribution Agreement.
+Added: In connection with the Spin-Off, we entered into the Separation and Distribution Agreement.
We also entered into various other ancillary agreements with Navient to effect the Spin-Off and provide a framework for our relationship with Navient thereafter, such as a transition services agreement, a tax sharing agreement, an employee matters agreement, a loan servicing and administration agreement, a joint marketing agreement, a key services agreement, a data sharing agreement, and a master sublease agreement.
3 unchanged sentences
If we are unable to obtain indemnification payments from Navient, our results of operations and financial condition could be materially and adversely affected.
−Removed: 2022 Form 10-K — SLM CORPORATION 89
−Removed: Pursuant to the terms of the Spin-Off and applicable law, Navient is responsible for all liabilities (whether accrued, contingent, or otherwise and whether known or unknown) arising out of or resulting from the conduct of pre-Spin-Off SLM and its subsidiaries’ businesses prior to the Spin-Off, other than certain specifically identified liabilities relating to the conduct of our consumer banking business for which the Bank is responsible.
−Removed: Nonetheless, given the prior usage of the Sallie Mae and SLM names by entities now owned by Navient, we and our subsidiaries may from time to time be improperly named as defendants in legal proceedings where the allegations at issue are the legal responsibility of Navient.
−Removed: Most of these legal proceedings involve matters that arose in whole or in part in the ordinary course of business of pre-Spin-Off SLM.
−Removed: Likewise, as the period of time since the Spin-Off increases, so does the likelihood any allegations that may be made may be in part for our own actions in a post-Spin-Off time period and in part for Navient’s conduct in a pre-Spin-Off time period.
−Removed: We will not be providing information on these proceedings unless there are material issues of fact or disagreement with Navient as to the bases of the proceedings or responsibility therefor that we believe could have a material, adverse impact on our business, assets, financial condition, liquidity, or outlook if not resolved in our favor.
We briefly summarize below some of the most significant agreements and relationships we continue to have with Navient.
5 unchanged sentences
• the creation of a governance structure by which matters related to the separation and other transactions contemplated by the Separation and Distribution Agreement are to be managed.
+Added: 80 SLM CORPORATION — 2023 Form 10-K
The Separation and Distribution Agreement provides specific processes and procedures pursuant to which we may submit claims for indemnification to Navient.
7 unchanged sentences
• In connection with the Spin-Off, we recorded a liability related to uncertain tax positions of $27 million for which we are indemnified by Navient.
−Removed: As of December 31, 2022, the remaining balance of the indemnification receivable related to those uncertain tax positions was $3 million.
+Added: As of December 31, 2023, the remaining balance of the indemnification receivable related to those uncertain tax positions was zero.
Long-Term Arrangements
−Removed: The loan servicing and administration agreement governs the terms by which Navient provides servicing, administration, and collection services for the Bank’s portfolio of FFELP Loans, as well as servicing history information
−Removed: 90 SLM CORPORATION — 2022 Form 10-K
−Removed: with respect to Private Education Loans previously serviced by Navient and access to certain promissory notes in Navient’s possession.
+Added: The loan servicing and administration agreement governs the terms by which Navient provides servicing, administration, and collection services for the Bank’s portfolio of FFELP Loans, as well as servicing history information with respect to Private Education Loans previously serviced by Navient and access to certain promissory notes in Navient’s possession.
The term of the loan servicing and administration agreement has been extended to December 31, 2026.
5 unchanged sentences
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.
−Removed: Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies” includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.
+Added: Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies” in this Form 10-K includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods.
3 unchanged sentences
Allowance for Credit Losses
−Removed: Adoption of CECL
−Removed: On January 1, 2020, we adopted ASU No.
−Removed: 2016-13 (“CECL”) using the modified retrospective method and it had a material impact on how we record and report our financial condition and results of operations and on regulatory capital.
−Removed: The following table illustrates the impact of the cumulative effect adjustment made upon adoption of CECL:
−Removed: January 1, 2020
−Removed: (Dollars in thousands) As reported under CECL Pre-CECL Adoption Impact of CECL Adoption
Allowance for Credit Losses
−Removed: Private Education Loans $ 1,435,130 $ 374,300 $ 1,060,830
−Removed: FFELP Loans 4,485 1,633 2,852
−Removed: Personal Loans 145,060 65,877 79,183
−Removed: Credit Cards 290 102 188
−Removed: Total $ 1,584,965 $ 441,912 $ 1,143,053
−Removed: Deferred tax asset $ 415,540 $ 109,369 $ 306,171
−Removed: Allowance for credit losses:
−Removed: Off-balance sheet exposures $ 118,239 $ 2,481 $ 115,758
−Removed: Retained Earnings $ 897,873 $ 1,850,512 $ (952,639)
−Removed: This transition adjustment is inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
−Removed: Under CECL, for all loans carried at amortized cost, upon loan origination we are required to measure our allowance for credit losses based on our estimate of all current expected credit losses over the remaining contractual term of the assets.
−Removed: Updates to that estimate each period are recorded through provision expense.
−Removed: The estimate of credit losses must be based on historical experience, current conditions, and reasonable and supportable forecasts.
−Removed: CECL does not mandate the use of any specific method for estimating credit loss, permitting companies to use judgment in selecting the approach that is most appropriate in their circumstances.
−Removed: 92 SLM CORPORATION — 2022 Form 10-K
−Removed: Allowance for Credit Losses
We maintain 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.
9 unchanged sentences
The reasonable and supportable forecast period is meant to represent the period in which we believe we can estimate the impact of forecasted economic factors in our expected losses.
−Removed: At the end of the reasonable and supportable forecast period, we immediately revert our forecast of expected losses to our historical averages.
+Added: At the end of the reasonable and supportable forecast period, we immediately revert our forecasted economic factors to long-term historical loss conditions.
We use a two-year reasonable and supportable forecast period, although this period is subject to change as our view evolves on our ability to reasonably forecast economic conditions to estimate future losses.
5 unchanged sentences
We use historical experience and economic forecasts to estimate future prepayment speeds.
−Removed: As with our loss forecasts, at the end of the two-year reasonable and supportable forecast for prepayments, we immediately revert to our historical long-term prepayment rates.
+Added: At the end of the two-year reasonable and supportable forecast for prepayments, we immediately revert to our historical long-term prepayment rates.
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).
−Removed: These qualitative factors include, but are not limited to, changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off and recovery practices not already included in the analysis, and the effect of other external factors such as legal and regulatory requirements on the level of estimated current expected credit losses.
+Added: These qualitative factors include, but are not limited to, changes in lending policies and procedures, including changes in underwriting standards, changes in servicing policies and collection administration practices, 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.
+Added: 82 SLM CORPORATION — 2023 Form 10-K
The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes.
7 unchanged sentences
• Recovery rates.
−Removed: 2022 Form 10-K — SLM CORPORATION 93
Management overlays can encompass a broad array of factors not captured by model inputs, including but not limited to, changes in servicing policies, collection administration practices, state law changes that could impact servicing and collection practices, and observed differences between forecasted and actual results.
In the fourth quarter of 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term.
−Removed: This change reflects our estimate that the elevated default rates experienced in the latter half of 2022 will continue into 2023 and then decline over time.
+Added: This change reflected our estimate that the elevated default rates experienced in the latter half of 2022 would continue into 2023 and then decline over time.
This estimate of future losses, like other aspects of our estimate of current expected credit losses, is susceptible to significant changes.
Of the model inputs outlined above, economic forecasts, weighting of economic forecasts, prepayments speeds, 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.
−Removed: In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, the home price index, and median family income in determining the adequacy of the allowance for credit losses.
+Added: 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.
4 unchanged sentences
Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.
−Removed: During 2022, we experienced slower prepayment rates due to the rising interest rate environment.
+Added: In 2023, we experienced slower prepayment rates due to the rising interest rate environment.
Historically, when rates rise loan prepayments and consolidation activity by third parties decline, and when rates decline loan prepayments and consolidation activity increase.
−Removed: During 2022, we reduced our estimates of future prepayment speeds to reflect the impact of the rising rate environment.
+Added: During 2023, our estimates of future prepayment speeds reflect the 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.
Slower prepayment speeds increase the allowance for credit losses because the loss rates applied in the future periods are applied to higher loan balances.
1 unchanged sentence
As a result, during 2021 we increased our estimate of prepayment speeds to reflect higher short-term and long-term prepayment experience, which had a beneficial impact on the allowance for credit losses at that time.
+Added: 2023 Form 10-K — SLM CORPORATION 83
A 100-basis point increase or decrease in the following inputs to the CECL loss model is estimated to change the allowance as follows:
10 unchanged sentences
(3) The estimated change in the recovery rate is based on long-term assumptions.
−Removed: A 100-basis point increase or decrease in the home price index or median family income does not result in material changes to our allowance for credit losses.
+Added: A 100-basis point increase or decrease in the retail sales or median family income does not result in material changes to our allowance for credit losses.
Increases in the weighting of economic forecasts resulting in greater weight given to more severe economic forecasts would result in an increase in the allowance for credit losses.
−Removed: The estimated impacts of changes in the above table were calculated for the two-year reasonable and supportable period, but were not calculated for the remaining periods since long-term assumptions used to calculate the allowance for
−Removed: 94 SLM CORPORATION — 2022 Form 10-K
−Removed: the remaining periods are based on longer term averages and only change when we determine there is a fundamental change that will affect long-term rates.
+Added: The estimated impacts of changes in the above table were calculated for the two-year reasonable and supportable period, 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 long-term rates.
Below we describe in further detail our policies and procedures for the allowance for credit losses as they relate to our Private Education Loan and FFELP Loan portfolios.
−Removed: During the third quarter of 2022, we reclassified our Credit Card loan portfolio to loans held-for-sale, as we plan to exit and sell our credit card business.
−Removed: During the third quarter of 2020, we sold our entire Personal Loan portfolio.
+Added: 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
16 unchanged sentences
Loan seasoning affects credit risk because a loan with a history of making payments generally has a lower incidence of default than a loan with a history of making infrequent or no payments.
−Removed: The existence of a cosigner lowers the likelihood of default as well.
+Added: 84 SLM CORPORATION — 2023 Form 10-K
+Added: existence of a cosigner lowers the likelihood of default as well.
We monitor and update these credit quality indicators in the analysis of the adequacy of our allowance for credit losses on a quarterly basis.
−Removed: We collect on defaulted loans through a mix of in-house collectors, third-party collectors, and sales to third-parties.
−Removed: For December 31, 2022 and 2021, 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.
+Added: In the second quarter of 2023, we changed how we collect on defaulted loans.
+Added: Previously, we used a mix of in-house collectors and sales to third parties.
+Added: We will continue to sell a segment of defaulted loans immediately after charge-off but will no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead will continue our collection efforts using in-house collectors and third-party collectors.
+Added: This improved our estimate of recovery rates for the year ended December 31, 2023.
+Added: 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.
+Added: 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.
+Added: 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.
Consequently, the loss estimates for these loans are generally low while the borrower is in school and then increase upon the end of the grace period after separation from school.
−Removed: At both December 31, 2022 and 2021, 24 percent 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.
−Removed: Our collection policies for Private Education Loans allow for periods of nonpayment for certain borrowers requesting an extended grace period upon leaving school or experiencing temporary difficulty meeting payment obligations.
−Removed: This is referred to as forbearance and is considered in estimating the allowance for credit losses.
+Added: At December 31, 2023 and 2022, 25 percent and 24 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.
+Added: 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.
As part of concluding on the adequacy of the allowance for credit losses for Private Education Loans, we review key allowance and loan metrics.
−Removed: The most relevant of these metrics considered are the allowance as a percentage of ending total loans and accrued interest to be capitalized and of ending loans in repayment and accrued interest to be capitalized on loans in repayment, delinquency percentages, and forbearance percentages.
+Added: The most relevant of these metrics considered are the allowance coverage of net charge-offs ratio;
+Added: the allowance as a percentage of ending total loans and accrued interest to be capitalized and of ending loans in repayment and accrued interest to be capitalized on loans in repayment;
+Added: and delinquency and forbearance percentages.
We consider a Private Education Loan to be delinquent if the borrower has not made a required payment prior to the 31st day after such payment was contractually due.
−Removed: 2022 Form 10-K — SLM CORPORATION 95
Adoption of ASU No.
2 unchanged sentences
2022-02, “Troubled Debt Restructurings and Vintage Disclosures” (“ASU No.
−Removed: 2022-02”), which eliminates the accounting guidance for TDRs while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.
+Added: 2022-02”), which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.
The enhanced disclosures are required to be provided for modifications made starting in the period of adoption.
3 unchanged sentences
Early adoption of the amendments in ASU No.
−Removed: 2022-02 is permitted if an entity has adopted CECL.
+Added: 2022-02 was permitted if an entity has adopted CECL.
The amendments should be applied prospectively.
For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method.
−Removed: We have elected to early adopt all aspects of ASU No.
+Added: We elected to early adopt all aspects of ASU No.
2022-02 prospectively for the period beginning January 1, 2022.
5 unchanged sentences
Our TDR portfolio was comprised mostly of loans with interest rate reductions and loans with forbearance usage greater than three months, as further described below.
−Removed: We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations, achieve better student outcomes, and increase the collectability of the loans.
−Removed: These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
−Removed: When we give a borrower facing financial difficulty an interest rate reduction, we temporarily reduce the rate (currently to 4.0 percent) for a two-year period and, in the vast majority of cases, permanently extend the final maturity of the loan.
−Removed: The combination of these two loan term changes helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate.
+Added: We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans.
+Added: 2023 Form 10-K — SLM CORPORATION 85
+Added: 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 alternative.
+Added: Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers.
Prior to January 1, 2022, we classified a loan as a TDR due to forbearance using a two-step process.
13 unchanged sentences
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.
−Removed: 96 SLM CORPORATION — 2022 Form 10-K
Uncollectible Interest
19 unchanged sentences
Once the quantitative calculation is performed, we review the adequacy of the allowance for credit losses and determine if qualitative adjustments need to be considered.
−Removed: 2022 Form 10-K — SLM CORPORATION 97
+Added: 86 SLM CORPORATION — 2023 Form 10-K
Risk Management
15 unchanged sentences
Finally, the Internal Audit function comprises the “third line of defense.” The Internal Audit function provides opinions to the Board of Directors on the effectiveness of the first and second lines of defense, as reflected in audit reports.
−Removed: Risk Management Policy and Risk Appetite Framework
−Removed: The Risk Management Policy and Risk Appetite Framework are designed to establish a stable risk and control environment across the enterprise.
+Added: Risk Management Policy and Risk Appetite Standard
+Added: The Risk Management Policy and Risk Appetite Standard are designed to establish a stable risk and control environment across the enterprise.
The policy, which is approved by the Board of Directors, outlines the framework used to ensure that risk and control issues across the enterprise are identified, assessed, measured, monitored, and reported.
−Removed: The Risk Management Policy, the Risk Appetite Framework, and the related policies and procedures constitute the core of the risk management program.
+Added: The Risk Management Policy, the Risk Appetite Standard, and the related policies and procedures constitute the core of the risk management program.
Sallie Mae leverages risk appetite to outline the level of risk we are willing to accept within each risk category, as described below, in pursuit of our business objectives.
−Removed: Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk type.
−Removed: The Enterprise Risk Committee (the “ERC”) provides oversight of the risk appetite framework with escalation to the Board of Directors, as appropriate.
+Added: Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk category.
+Added: The Enterprise Risk Committee provides oversight of the risk appetite standard with escalation to the Board of Directors, as appropriate.
Board of Directors Committee Structure
2 unchanged sentences
The Financial Risk Committee assists the Board of Directors in fulfilling its risk management oversight responsibilities with regard to the Company’s major financial risks, including credit risk, market risk, and liquidity risk.
−Removed: The Financial Risk Committee, along with the Operational and Compliance Risk Committee, provides oversight of the development, maintenance, and monitoring of the Company’s risk management framework, risk governance structure, and risk appetite statement and thresholds, and the promotion of our risk management culture.
+Added: The Financial Risk Committee, along with the Operational and Compliance Risk Committee, provides oversight of the development, maintenance, and monitoring of the Company’s risk management framework, risk governance structure, and risk appetite statements, metrics, and associated limits and thresholds, and the promotion of our risk management culture.
The Financial Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer.
• Operational and Compliance Risk Committee.
−Removed: 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 security risk, and model risk.
−Removed: 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 statement and
−Removed: 98 SLM CORPORATION — 2022 Form 10-K
−Removed: thresholds, and the promotion of our risk management culture.
−Removed: The Operational and Compliance Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer.
+Added: 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.
+Added: 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 management culture.
+Added: 2023 Form 10-K — SLM CORPORATION 87
+Added: Operational and Compliance Risk Committee receives periodic updates on compliance with the framework from the Chief Risk Officer.
• Audit Committee .
−Removed: The Audit Committee is responsible for oversight of the quality and integrity of our financial statements, accounting and reporting processes, the performance of the internal audit function, and the qualifications, hiring, performance, and independence of our independent registered accounting firm.
+Added: The Audit Committee is responsible for oversight of the quality and integrity of our financial statements, accounting and reporting processes, the performance of the Internal Audit function, and the qualifications, hiring, performance, and independence of our independent registered public accounting firm.
• Nominations and Governance Committee.
−Removed: The Nominations and Governance Committee recommends to the Board appropriate standards of corporate governance, and assists the Board of Directors in fulfilling its obligations with regard to oversight of the operations of the Board, the qualifications and independence of directors, nominations to the Board of Directors, and compliance with the corporate governance standards.
+Added: The Nominations and Governance Committee recommends to the Board of Directors appropriate standards of corporate governance, and assists the Board of Directors in fulfilling its obligations with regard to oversight of the operations of the Board of Directors, the qualifications and independence of directors, nominations to the Board of Directors, and compliance with the corporate governance standards.
The Nominations and Governance Committee also provides oversight of the ESG matters of the Company.
5 unchanged sentences
Management-Level Committee Structure
−Removed: Executive Committee (“EC”) .
+Added: Executive Committee .
The EC is authorized by the Board of Directors to assist the CEO in the general supervision of the business of the Company.
6 unchanged sentences
The Credit Committee is responsible for credit and counterparty risk, product pricing, and credit and collections operations.
−Removed: • Operational Risk Committee (“ORC”) .
−Removed: The ORC is the oversight body for risk related to inadequate or failed internal processes, people, and systems or from external events.
−Removed: It also reviews information technology risk and regulatory and legal risks.
+Added: • Operational and Compliance Risk Committee .
+Added: The OCRC is the oversight body for the identification, assessment, remediation, measurement, and reporting of operational and compliance risks.
• Asset and Liability Committee (“ALCO”).
ALCO is responsible for the strategy, processes, and authorities with which the Bank’s interest rate risk, liquidity, and capital adequacy are managed.
+Added: • 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.
3 unchanged sentences
Internal Audit
−Removed: Internal Audit provides independent assurance to the Audit Committee of the Board of Directors and management as to the adequacy and effectiveness of our risk management, control, and governance processes, and assists management by providing objective assurance, advisory, and consulting services designed to add value and improve operations.
−Removed: Internal Audit regularly monitors and 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.
−Removed: 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 their annual Internal Audit plan.
−Removed: The Internal Audit function provides challenge to the first and second lines of defense and also provides opinions to the Board of Directors on the effectiveness of the first and second lines of defense.
−Removed: 2022 Form 10-K — SLM CORPORATION 99
+Added: Internal Audit provides independent assurance to the Audit Committee of the Board of Directors as to the adequacy and effectiveness of our risk management, control, and governance processes.
+Added: Internal Audit also assists management by providing objective assurance, credible challenge, and consulting services around matters involving risk management.
+Added: 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.
+Added: 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.
+Added: 88 SLM CORPORATION — 2023 Form 10-K
Risk Categories
4 unchanged sentences
Strategic Risk .
−Removed: Strategic risk is the risk of opportunity costs or of adverse impacts to the value of future business from external threats or from internal constraints and/or failings.
−Removed: The overall development of the strategic plan includes extensive engagement with the Board of Directors.
+Added: Strategic risk is the risk of:
+Added: adverse impacts to enterprise value, current or anticipated earnings, capital, or franchise value arising from the Company’s competitive and market position and evolving forces in the industry that can affect that position;
+Added: lack of responsiveness to these conditions;
+Added: strategic decisions to change the Company’s scale, market position, or operating model;
+Added: or failure to appropriately consider implementation risks inherent in the Company’s strategy.
+Added: The overall development of the Company’s strategic plan includes extensive engagement with the Board of Directors.
Similarly, the Board of Directors provides oversight and effective challenge on performance relative to the strategic plan.
10 unchanged sentences
Credit risk exposure is managed primarily through the Credit Committee, and regular reporting on credit programs and credit metrics is provided to the Financial Risk Committee of the Board of Directors.
−Removed: Market risk is the risk of adverse impacts to earnings, capital, or reputation resulting from changes in market conditions and prices.
+Added: Market risk is the risk of adverse impacts to earnings, capital, or reputation resulting from fluctuations in market conditions such as changes in interest rates, foreign exchange rates, commodity prices, equity prices, and other financial market factors.
We are exposed to various types of market risk, in particular the risk of loss resulting from interest rate risk, basis risk, and other risks that arise through the management of our investment, debt, and loan portfolios.
4 unchanged sentences
Liquidity Risk .
−Removed: Liquidity risk is the risk of adverse impacts to earnings, capital, reputation, or survival resulting from not being able to meet the Company’s financial obligations when they become due.
+Added: Liquidity risk is the risk of adverse impacts to earnings, capital, reputation, or survival resulting from not being able to meet the Company’s financial obligations when they become due, whether due to a lack of available funding or the inability to liquidate assets in a timely and cost-effective manner.
Our primary liquidity needs include our ongoing ability to:
4 unchanged sentences
Ultimately, our liquidity risk relates to our ability to access the capital markets at reasonable rates and to maintain deposits and other funding sources through the Bank, as well as our maintenance of a reserve of cash and unencumbered highly liquid investment securities that may be readily converted to cash if needed.
+Added: 2023 Form 10-K — SLM CORPORATION 89
Our liquidity risk activities are centralized within our Corporate Finance department, which is responsible for developing and executing our funding strategy.
2 unchanged sentences
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.
−Removed: 100 SLM CORPORATION — 2022 Form 10-K
Operational Risk .
−Removed: Operational risk is the risk of adverse impacts to earnings, capital, or reputation resulting from inadequate or failed internal processes, people, and systems, or from external events that are not directly attributable to
−Removed: other risk categories.
+Added: Operational risk is the risk of adverse impacts to earnings, capital, or reputation resulting from inadequate or failed internal processes, people, and systems, or from external events.
Operational risk is pervasive in that it exists in all business lines, functional units, legal entities, and geographic locations.
Operational risk exposures are managed through a combination of first line of defense and control activities and second line of defense oversight.
−Removed: The ORC is the management committee responsible for operational risk, and it supports the EC in its oversight duties.
−Removed: The ORC is responsible for escalation to the EC, as appropriate.
+Added: The OCRC is the management committee responsible for operational risk, and it supports the EC in its oversight duties.
+Added: The OCRC is responsible for escalation to the EC, as appropriate.
Additionally, our key risk indicators include operational risk metrics, thresholds, and limits and are included in the periodic reporting to the Operational and Compliance Risk Committee of the Board of Directors.
+Added: Cybersecurity risk is one of our significant operational risks.
+Added: We provide more detailed information on our cybersecurity risk management, strategy, and governance in Part I, Item 1C.
+Added: of this Form 10-K.
Compliance Risk.
−Removed: 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.
+Added: 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.
Primary ownership and responsibility for compliance risk is placed with the first line of defense to identify and manage.
−Removed: Compliance supports these activities by providing extensive training, monitoring, and testing of the processes, policies, and procedures utilized by the first line of defense, maintaining relevant legal and regulatory requirements, and working in close coordination with our Legal department.
+Added: Our Compliance function supports these activities by providing extensive training, monitoring, and testing of the processes, policies, and procedures utilized by the first line of defense, maintaining relevant legal and regulatory requirements, and working in close coordination with our Legal department.
Compliance risk metrics and regular reporting on compliance programs are provided to the Operational and Compliance Risk Committee of the Board of Directors.
−Removed: 2022 Form 10-K — SLM CORPORATION 101
+Added: 90 SLM CORPORATION — 2023 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.