What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-22 · 374 added, 554 removed, 887 unchanged (51% of the section changed)

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Through this discussion and analysis, we intend to provide the reader with some narrative context for how our management views our consolidated financial statements, additional context within which to assess our operating results, and information on the quality and variability of our earnings, liquidity, and cash flows.

Impact of COVID-19 on Sallie Mae

The COVID-19 crisis was unprecedented and has had a significant impact on the economic environment globally and in the U.S.

On April 10, 2023, President Biden signed into law a joint resolution that immediately terminated the COVID-19 national emergency.

On June 3, 2023, President Biden signed into law the Fiscal Responsibility Act of 2023, and as a result, the U.S.

Department of Education announced the end of its COVID-19 student loan forbearance program.

Beginning on September 1, 2023, interest accrual on federal student loans resumed and in October 2023, payments by federal student loan borrowers resumed.

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.

The following discussion and analysis presents a review of our business and operations as of and for the year ended December 31, 2024.

Strategic Imperatives

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

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

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

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

Key Financial Measures

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The growth of our business and the strength of our financial condition are primarily driven by our ability to achieve our annual Private Education Loan origination goals while sustaining credit quality and maintaining cost-efficient funding sources to support our originations.

Net Interest Income

Net Interest Income and Net Interest Margin

Most of our earnings are generated from the interest income earned on assets in our education loan portfolios, net of the interest expense we pay on the funding for those loans.

We report these earnings as net interest income.

We also often refer to the net interest margin, which is the net interest yield earned on our interest-earning assets less the rate paid on our related interest-bearing liabilities.

The majority of our interest income comes from our Private Education Loan portfolio.

FFELP Loans have a lower net interest yield and carry lower risk than Private Education Loans, as a result of the federal government guarantee supporting FFELP Loans.

We also often refer to the net interest margin, which is the net interest yield earned on our interest-earning assets less the rate paid on our related interest-bearing liabilities.

As interest rates change, changes in the cost of our interest-bearing liabilities tend to lag slightly compared to changes in the yields on our interest-earning assets, which could impact our net interest margin in any given period.

Loan Sales and Secured Financings

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Consequently, our operating results may be significantly affected by whether we choose to sell loans and recognize current gains on sale or continue to hold or finance loans, thereby retaining some or all the net interest income from those loans.

In 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.”

In 2024, we recognized $255 million in gains from the sale of approximately $3.69 billion of our Private Education Loans, including $3.42 billion of principal and $274 million in capitalized interest, to unaffiliated third parties.

2024 Form 10-K — SLM CORPORATION 45

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

During the third quarter of 2024, we transferred our remaining FFELP Loan portfolio to loans held for sale and subsequently sold the FFELP Loan portfolio to an unaffiliated third party in the fourth quarter of 2024.

We wrote down the FFELP Loan portfolio to its estimated fair value through an adjustment to the allowance for credit losses of $8 million in 2024.

For additional information, see Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment.”

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.

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.

See “ — Critical Accounting Policies and Estimates — Allowance for Credit Losses” in this Item 7.

Allowances for credit losses are an important indicator of management’s perspective on the future performance of a loan portfolio.

Each quarter, management makes an adjustment to the allowance for credit losses to reflect its most up-to-date estimate of future losses by recording a charge against quarterly revenues known as provision expense.

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Losses on our Private Education Loans are affected by risk characteristics such as loan status (in-school, grace, forbearance, repayment, and delinquency), loan seasoning (number of months in active repayment), underwriting criteria (e.g., credit scores), presence of a cosigner, servicing and collections practices, and the current economic environment.

See “CREDIT RISK - Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial condition, results of operations, and/or cash flows .

” in Part I, Item 1A.

“Risk Factors” for additional information.

See Item 1A “Risk Factors — CREDIT RISK — Defaults on our loans could adversely affect our business, financial condition, results of operations, and/or cash flows” for additional information.

Losses typically emerge once a borrower separates from school and enters full principal and interest repayment after the borrower’s grace period (six months, typically) ends.

As a larger proportion of our Private Education Loan portfolio enters full principal and interest repayment in the coming years, we would expect the amount of charge-offs to increase.

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.

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

As a larger proportion of our Private Education Loan portfolio enters full principal and interest repayment in the coming years, we would expect the dollar amount of charge-offs to increase.

Prior to the sale of our remaining FFELP Loan portfolio in the fourth quarter of 2024, our allowance for credit losses for FFELP Loans and related periodic provision expense was small because we generally bore a maximum of three percent loss exposure due to the federal guarantee on such loans.

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

Charge-Offs and Delinquencies

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

2024 Form 10-K — SLM CORPORATION 46

Funding Sources

Though we rely primarily on deposits and loan securitizations to fund our loan originations, we also have access to a multi-lender secured borrowing facility (the “Secured Borrowing Facility”) and, from time to time, we access the debt capital markets through unsecured bond issuances.

For additional information, see “—Borrowings — Long-term Borrowings” below in this Item 7.

We utilize brokered, retail, and other core deposits to meet funding needs and enhance our liquidity position.

These deposits can be term or liquid deposits.

Our term brokered deposits have terms from three months to ten years.

Our term brokered deposits have original terms from three months to ten years.

Retail deposits are sourced through a direct banking platform and serve as an important source of diversified funding.

Brokered deposits are sourced through a network of brokers and provide a stable source of funding.

In addition, we accept certain

48 SLM CORPORATION — 2023 Form 10-K

deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors.

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.

In addition, we accept certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors.

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

Loan Securitizations

We have diversified our funding sources by issuing term ABS and by entering into the Secured Borrowing Facility.

Term ABS financing provides long-term funding for our Private Education Loan portfolio at attractive interest rates and at terms that effectively match the average life of the assets.

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

The Secured Borrowing Facility provides an extremely flexible source of funds that can be drawn upon on short notice to meet funding needs within the Bank.

Borrowings under our Secured Borrowing Facility are accounted for as secured financings.

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.

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.

In 2020, we began accepting certain deposits based on SOFR.

In the second quarter of 2021, we began issuing variable-rate Private Education Loans that are indexed to SOFR.

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.

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.

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.

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.

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.

“Risk Factors - INTEREST RATE RISK” in this Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.

Strategic Imperatives

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

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

In addition, we continue to seek to better inform the external narrative about student lending and Sallie Mae.

We also strive to maintain a rigorous and predictable capital allocation and return program to create shareholder value.

We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work.

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.

Acquisition of Scholly

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.

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

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.

2024 Form 10-K — SLM CORPORATION 47

2023-A Securitization

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.

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.

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

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.

We sold $568 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $568 million of gross proceeds.

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.

2023 Loan Sales and 2023-B and 2023-D Transactions

The transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates.

We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales.

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

On May 16, 2023, we amended our Secured Borrowing Facility to extend the maturity of the facility.

The amount that can be borrowed under the facility is $2 billion.

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

Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances.

The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until May 15, 2024.

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).

Sale of Credit Card Loan Portfolio

In May 2023, we sold our Credit Card loan portfolio to a third party.

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

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

During the year ended December 31, 2023, we repurchased 22 million shares of our common stock at a total cost of $349 million under Rule 10b5-1 trading plans authorized under our share repurchase programs.

Business — Human Capital Resources and Talent Development” for a discussion regarding our mission-led culture.

50 SLM CORPORATION — 2023 Form 10-K

Results of Operations

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Acquired intangible assets impairment and amortization expense 5 66 8 (61) (92) 58 725

Restructuring expenses — — 1 — — (1) (100)

Total non-interest expenses 642 685 559 (43) (6) 126 23

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Declared dividends per common share $ 0.46 $ 0.44 $ 0.44 $ 0.02 5 % $ — — %

Due to rounding, amounts in this table may not sum to totals.

2024 Form 10-K — SLM CORPORATION 48

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

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

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

• 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.

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.

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

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

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

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

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

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

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

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

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

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

• Provision for credit losses in 2024 was $409 million, compared with $345 million in the year-ago period.

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).

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.

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

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

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

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

• Gains on sales of loans, net, were $255 million in 2024, compared with $160 million in the year-ago period.

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.

The increase in gains on sales of loans was primarily the result of selling approximately $3.69 billion of Private Education Loans in 2024, compared with the sale of approximately $3.15 billion of Private Education Loans in the year-ago period.

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

We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023.

• Gains (losses) on securities, net, were $3 million in gains in 2023, compared with a net loss of $60 million in the year-ago period.

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

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

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

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

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

• Other income was $113 million in 2024, compared with $84 million in the year-ago period.

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.

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

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

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

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

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

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

• In 2024, we recorded $5 million in impairment and amortization of acquired intangible assets, compared with $66 million in the year-ago period.

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

This write-down occurred because we 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.

In 2023, we recorded $10 million in amortization expense of acquired intangible assets, compared to $8 million in the year-ago period.

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

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

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

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

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

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

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

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

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,

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.

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.

The primary contributors to each of the identified drivers of change in net income for 2023 compared with 2022 are as follows:

• 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.

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.

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.

• 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.

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

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

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

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

• Provision for credit losses in 2023 was $345 million, compared with $633 million in 2022.

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

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

“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.

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.

• Gains on sales of loans, net, were $160 million in 2023, compared with $328 million in 2022.

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.

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.

• Gains (losses) on securities, net, was a loss of $60 million in 2022, compared with a gain of $39 million in 2021.

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

We also sold our Credit Card loan portfolio in May 2023 and recorded a $4 million loss on the sale in 2023.

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

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

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

As such, we wrote down the value based upon an estimate of the value of these securities.

The gain recorded in 2021 was primarily the result of a $35 million increase in the valuation of the same non-marketable securities.

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

• Other income was $84 million in 2023, compared with $67 million in 2022.

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

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due in April 2022.

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.

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

• For the year ended December 31, 2023, total operating expenses were $619 million, compared with $551 million in 2022.

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.

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

• In 2023, we recorded $66 million in impairment and amortization of acquired intangible assets, compared with $8 million in 2022.

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

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

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

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

For additional

2024 Form 10-K — SLM CORPORATION 50

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

• Income tax expense for the year ended December 31, 2023 was $197 million, compared with $162 million in 2022.

The effective tax rate increased in 2022 to 25.6 percent from 24.7 percent in 2021.

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”

We prepare financial statements in accordance with GAAP.

However, we also produce and report our after-tax earnings on a separate basis that we refer to as non-GAAP “Core Earnings.” The difference between our non-GAAP “Core Earnings” and GAAP results for periods presented generally is driven by the unrealized, mark-to-fair value gains (losses) on derivative contracts recognized in GAAP, but not in non-GAAP “Core Earnings.”

Non-GAAP “Core Earnings” recognizes the difference in accounting treatment based upon whether a derivative qualifies for hedge accounting treatment.

We enter into derivative instruments to economically hedge interest rate and cash flow risk associated with our portfolio.

We believe that our derivatives are effective economic hedges and, as such, are a critical element of our interest rate risk management strategy.

Those derivative instruments that qualify for hedge accounting treatment have their related cash flows recorded in interest income or interest expense along with the hedged item.

Some of our derivatives do not qualify for hedge accounting treatment and the stand-alone derivative must be marked-to-fair value in the income statement with no consideration for the corresponding change in fair value of the hedged item.

These gains and losses, recorded in “Gains (losses) on derivatives and hedging activities, net,” are primarily caused by interest rate volatility and changing credit spreads during the period as well as the volume and term of derivatives not receiving hedge accounting treatment.

Cash flows on derivative instruments that do not qualify for hedge accounting are not recorded in interest income and interest expense;

they are recorded in non-interest income:

“Gains (losses) on derivatives and hedging activities, net.”

The adjustments required to reconcile from our non-GAAP “Core Earnings” results to our GAAP results of operations, net of tax, relate to differing treatments for those derivative instruments used to hedge our economic risks that do not qualify for hedge accounting treatment.

The amount recorded in “Gains (losses) on derivatives and hedging activities, net” includes (i) the accrual of the current payment on the interest rate swaps that do not qualify for hedge accounting treatment, and (ii) the change in fair values related to future expected cash flows for derivatives that do not qualify for hedge accounting treatment.

For purposes of non-GAAP “Core Earnings,” we include in GAAP earnings the current period accrual amounts (interest reclassification) on the swaps and exclude the change in fair values for those derivatives not qualifying for hedge accounting treatment.

Non-GAAP “Core Earnings” is meant to represent what earnings would have been had these derivatives qualified for hedge accounting and there was no ineffectiveness.

Non-GAAP “Core Earnings” are not a substitute for reported results under GAAP.

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.

Our non-GAAP “Core Earnings” basis of presentation differs from GAAP in the way it treats derivatives as described above.

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.

There were no gains (losses) on derivative and hedging activities in the year ended December 31, 2023.

54 SLM CORPORATION — 2023 Form 10-K

Years Ended December 31,

(dollars in thousands) 2023 2022 2021

Unrealized gains (losses) on instruments not in a hedging relationship $ — $ (248) $ (23,216)

Interest reclassification — 243 23,360

Gains on derivatives and hedging activities, net $ — $ (5) $ 144

The following table reflects adjustments associated with our derivative activities.

Years Ended December 31,

(dollars in thousands, except per share amounts) 2023 2022 2021

Non-GAAP “Core Earnings” adjustments to GAAP:

GAAP net income $ 581,391 $ 469,014 $ 1,160,513

Preferred stock dividends 17,705 9,029 4,736

GAAP net income attributable to SLM Corporation common stock $ 563,686 $ 459,985 $ 1,155,777

Net impact of derivative accounting (1)

Net tax expense (2)

Total non-GAAP “Core Earnings” adjustments to GAAP — 188 17,601

Non-GAAP “Core Earnings” attributable to SLM Corporation common stock $ 563,686 $ 460,173 $ 1,173,378

GAAP diluted earnings per common share $ 2.41 $ 1.76 $ 3.61

Derivative adjustments, net of tax — — 0.06

Non-GAAP “Core Earnings” diluted earnings per common share $ 2.41 $ 1.76 $ 3.67

(1) Derivative Accounting:

Non-GAAP “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, but include current period accruals on the derivative instruments.

Under GAAP, for our derivatives held to maturity, the cumulative net unrealized gain or loss over the life of the contract will equal $0.

(2) Non-GAAP “Core Earnings” tax rate is based on the effective tax rate at the Bank, where the derivative instruments are held.

The effective tax rate decreased in 2023 to 25.3 percent from 25.6 percent in 2022.

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

2024 Form 10-K — SLM CORPORATION 51

24 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.

56 SLM CORPORATION — 2023 Form 10-K

2024 Form 10-K — SLM CORPORATION 52

Rate/Volume Analysis - GAAP

5 unchanged sentences

Interest expense 108,174 108,440 (266)

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

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

Interest income $ 560,723 $ 537,107 $ 23,616

7 unchanged sentences

As of December 31, 2024

(dollars in thousands) Private

Loans Total Loans

(dollars in thousands) Total Loans

Investment (Private Education Loans)

Total loan portfolio:

In-school (1)

$ 3,997,092 $ 57 $ 3,997,149

Grace, repayment and other (2)

17,028,752 537,344 17,566,096

Repayment and other (2)

Total, gross 22,235,008

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

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

Allowance for loan losses (1,435,920)

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

10 unchanged sentences

$ 3,997,092 $ 57 $ 3,997,149

Grace, repayment and other (2)

Repayment and other (2)

17,028,752 537,344 17,566,096

1 unchanged sentence

Deferred origination costs and unamortized premium/(discount) 81,554 1,330 82,884

Allowance for credit losses (1,353,631) (3,444) (1,357,075)

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

Total loans held for investment portfolio, net $ 19,772,293 $ 534,064 $ 20,306,357

5 unchanged sentences

(dollars in thousands) Private

Cards Total Loans Held for Investment

Loans Total Loans

Total loan portfolio:

1 unchanged sentence

$ 3,659,323 $ 57 $ 3,659,380

Grace, repayment and other (2)

Repayment and other (2)

16,644,365 608,993 17,253,358

1 unchanged sentence

Deferred origination costs and unamortized premium/(discount) 69,656 1,549 71,205

Allowance for credit losses (1,158,977) (4,077) (2,281) (1,165,335)

Allowance for loan losses (1,353,631) (3,444) (1,357,075)

Total loans held for investment portfolio, net $ 19,019,713 $ 607,155 $ 19,626,868

3 unchanged sentences

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).

58 SLM CORPORATION — 2023 Form 10-K

2024 Form 10-K — SLM CORPORATION 54

As of December 31, 2021

4 unchanged sentences

$ 3,544,030 $ 82 $ — $ 3,544,112

Grace, repayment and other (2)(3)

Repayment and other (2)

17,172,833 695,134 25,014 17,892,981

1 unchanged sentence

Deferred origination costs and unamortized premium/(discount) 67,488 1,815 222 69,525

Allowance for credit losses (1,355,844) (4,378) (1,501) (1,361,723)

Allowance for loan losses (1,158,977) (4,077) (2,281) (1,165,335)

Total loans held for investment portfolio, net $ 19,625,374 $ 692,954 $ 22,955 $ 20,341,283

1 unchanged sentence

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

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

For further discussion, see “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool .”

(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.

For further discussion, see “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool .”

(2) Includes loans in deferment or forbearance.

2 unchanged sentences

(dollars in thousands) Private

Loans Personal

Cards Total Loans

Cards Total Loans Held for Investment

Total loan portfolio:

1 unchanged sentence

$ 3,582,394 $ 81 $ — $ 3,582,475

Grace, repayment and other (2)

Repayment and other (2)(3)

16,146,943 737,512 12,238 16,896,693

1 unchanged sentence

Deferred origination costs and unamortized premium/(discount) 63,475 1,993 230 65,698

Allowance for credit losses (374,300) (1,633) (65,877) (102) (441,912)

Allowance for loan losses (1,355,844) (4,378) (1,501) (1,361,723)

Total loans held for investment portfolio, net $ 18,436,968 $ 735,208 $ 10,967 $ 19,183,143

1 unchanged sentence

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

(3) Includes loans in deferment or forbearance.

5 unchanged sentences

FFELP Loans 413,338 2 574,218 3 662,194 3

Credit Cards (1)

— — — — 14,982 —

Total portfolio $ 21,534,883 100 % $ 21,613,919 100 % $ 21,238,931 100 %

(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

12 unchanged sentences

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

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

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

2 unchanged sentences

(dollars in thousands) Private

Cards Total Loans

Investment, net

Loans Total Loans

Held for Investment, net

Beginning balance $ 19,019,713 $ 607,155 $ 19,626,868

7 unchanged sentences

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

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

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

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

60 SLM CORPORATION — 2023 Form 10-K

2024 Form 10-K — SLM CORPORATION 56

Year Ended December 31, 2022

11 unchanged sentences

Allowance (194,654) 633 2,281 (191,740)

Transfer from loans held-for-sale 25,040 — — 25,040

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

Repayments and other (2,438,799) (49,545) (78,955) (2,567,299)

1 unchanged sentence

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

The amount of loans in full principal and interest repayment status in our Private Education Loans held for investment portfolio at December 31, 2023 decreased by 0.6 percent compared with December 31, 2022, and now totals 43 percent of our Private Education Loans held for investment portfolio at December 31, 2023.

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

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

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

decrease in consolidations is attributable to higher interest rates in 2023 that made it less competitive for consolidators.

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

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.

23 unchanged sentences

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

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

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

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.

9 unchanged sentences

Total Private Education Loans, gross $ 27,836 $ 819,979 $ 11,540,531 $ 9,846,662 $ 22,235,008

62 SLM CORPORATION — 2023 Form 10-K

2024 Form 10-K — SLM CORPORATION 58

Allowance for Credit Losses

Allowance for Credit Losses Activity

Allowance for Loan Losses Activity

Years Ended December 31,

(dollars in thousands) 2024 2023

4 unchanged sentences

(376,840) (380) (377,220) (420,095) (1,001) (421,096)

Write-downs arising from transfer of loans to held for sale (2)

— (8,297) (8,297) — — —

Recoveries 44,756 — 44,756 46,368 — 46,368

Provisions for credit losses:

Provisions for loan losses:

Provision, current period 357,067 4,010 361,077 240,347 2,224 242,571

Loan sale reduction to provision (235,955) — (235,955) (205,383) — (205,383)

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

Total provisions for credit losses (2)

Total provisions for loan losses (3)

121,112 4,010 125,122 34,964 2,224 37,188

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

(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.

(2) For the years ended December 31, 2023 and 2022, 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.

When the loan is funded, we transfer that liability to the allowance for credit losses.

Consolidated Statements of Income

Provisions for Credit Losses Reconciliation

Years Ended December 31,

(dollars in thousands) 2023 2022

Private Education Loan provisions for credit losses:

Provisions for loan losses $ 34,964 $ 236,023

Provisions for unfunded loan commitments 308,275 396,521

Total Private Education Loan provisions for credit losses 343,239 632,544

Other impacts to the provisions for credit losses:

FFELP Loans 2,224 (20)

Credit Cards — 929

Total 2,224 909

Provisions for credit losses reported in consolidated statements of income $ 345,463 $ 633,453

2023 Form 10-K — SLM CORPORATION 63

Years Ended December 31, (dollars in thousands) Private

1 unchanged sentence

Portfolio Private

Loans Personal Loans Credit Cards Total

Loans Credit Cards Total

Beginning balance $ 1,158,977 $ 4,077 $ 2,281 $ 1,165,335 $ 1,355,844 $ 4,378 $ 1,501 $ 1,361,723

Transfer from unfunded commitment liability (1)

344,310 — — 344,310 301,655 — — 301,655

(427,416) (613) (3,215) (431,244) (229,591) (321) (356) (230,268)

Recoveries 41,737 — 5 41,742 29,494 — 12 29,506

Provisions for loan losses:

Provision, current period 410,254 (20) 3,301 413,535 (233,852) 20 1,124 (232,708)

Loan sale reduction to provision (174,231) — — (174,231) (66,460) — — (66,460)

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

Total provisions for loan losses (3)

236,023 (20) 929 236,932 (298,425) 20 1,124 (297,281)

Ending balance $ 1,353,631 $ 3,444 $ — $ 1,357,075 $ 1,158,977 $ 4,077 $ 2,281 $ 1,165,335

(1) See Notes to Consolidated Financial Statements, Note 6, “Allowance for Credit Losses and Unfunded Loan Commitments,” in this Form 10-K for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2) Represents fair value adjustments on loans transferred to held for sale.

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

2024 Form 10-K — SLM CORPORATION 59

Year Ended December 31,

(dollars in thousands) Private

Loans Personal Loans Credit

Beginning balance $ 374,300 $ 1,633 $ 65,877 $ 102 $ 441,912

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

6 unchanged sentences

Recoveries 24,021 — 4,984 2 29,007

Provisions for credit losses:

Provisions for loan losses:

Provision, current period 148,673 412 40,485 1,328 190,898

1 unchanged sentence

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

Total provisions for credit losses (3)

Total provisions for loan losses (3)

(218,789) 412 (2,431) 1,328 (219,480)

Ending balance $ 1,355,844 $ 4,378 $ — $ 1,501 $ 1,361,723

(2) Represents fair value adjustments on loans sold.

(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.

When the loan is funded, we transfer that liability to the allowance for credit losses.

Provision for Credit Losses

Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income.

Consolidated Statements of Income

12 unchanged sentences

Provisions for credit losses reported in consolidated statements of income 408,515 345,463 633,453 (32,957) 93,133

64 SLM CORPORATION — 2023 Form 10-K

Year Ended December 31,

(dollars in thousands) Private

Loans Personal Loans Credit

Beginning balance $ 277,943 $ 977 $ 62,201 $ — $ 341,121

(208,978) (822) (74,313) (1) (284,114)

Recoveries 25,765 — 5,206 — 30,971

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

2024 Form 10-K — SLM CORPORATION 60

Private Education Loan Allowance for Credit Losses

1 unchanged sentence

Private Education Loans held for investment in full principal and interest repayment status were 42 percent of our total Private Education Loans held for investment portfolio at December 31, 2024, compared with 43 percent at December 31, 2023.

For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “—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.

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

2024 Form 10-K — SLM CORPORATION 61

21 unchanged sentences

Private Education Loans, net $ 20,902,158 $ 19,772,293 $ 19,019,713

Percentage of Private Education Loans in repayment 73.3 % 74.5 % 74.9 %

Delinquencies as a percentage of Private Education Loans in repayment 3.9 % 3.8 % 3.3 %

Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance 2.1 % 1.8 % 1.9 %

Percentage of loans in repayment 72.4 % 73.3 % 74.5 %

Delinquencies as a percentage of loans in repayment 3.7 % 3.9 % 3.8 %

Percentage of loans in forbearance:

Percentage of loans in an extended grace period (4)

1.6 % 1.1 % 0.7 %

Percentage of loans in hardship and other forbearances (5)

0.9 % 1.0 % 1.1 %

(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.

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.

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.

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.

See additional discussion in “— Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool.”

66 SLM CORPORATION — 2023 Form 10-K

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

(4) We calculate the percentage of loans in an extended grace period as the ratio of (a) Private Education Loans in forbearance in an extended grace period numerator to (b) Private Education Loans in repayment and forbearance denominator.

An extended grace period aligns with The Office of the Comptroller of the Currency definition of an additional, consecutive, one-time period during which no payment is required for up to six months after the initial grace period.

We typically grant this extended grace period to customers who may be having difficulty finding employment before the full principal and interest repayment period starts or once it has begun.

Loans in forbearance in an extended grace period were approximately $253 million, $168 million, and $114 million at December 31, 2024, 2023, and 2022, respectively.

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

(5) We calculate the percentage of loans in hardship and other forbearances as the ratio of (a) Private Education Loans in hardship and other forbearances (excluding loans in an extended grace period) numerator to (b) Private Education Loans in repayment and forbearance denominator.

If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations, which may include a short-term hardship forbearance.

Loans in hardship and other forbearances (excluding loans in an extended grace period) were approximately $152 million, $156 million, and $165 million at December 31, 2024, 2023, and 2022, respectively.

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

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

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

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

2024 Form 10-K — SLM CORPORATION 62

Item 7 for additional details.

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

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

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

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

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

The percentage of loans in hardship and other forbearances remained relatively consistent at 1.0 percent and 1.1 percent, respectively at December 31, 2023 and December 31, 2022.

2024 Form 10-K — SLM CORPORATION 63

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

Years Ended December 31,

(dollars in thousands) 2024 2023 2022 2021 2020

Beginning balance $ 1,353,631 $ 1,158,977 $ 1,355,844 $ 374,300 $ 277,943

Allowance for loan losses, beginning balance $ 1,335,105 $ 1,353,631 $ 1,158,977 $ 1,355,844 $ 374,300

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

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

Transfer from unfunded commitment liability (1)

Transfer from allowance for unfunded loan commitments (1)

311,787 320,237 344,310 301,655 320,808

Provision for credit losses:

Provision, current period 240,347 410,254 (233,852) 148,673 279,570

Provision for current period 357,067 240,347 410,254 (233,852) 148,673

Loan sale reduction to provision (235,955) (205,383) (174,231) (66,460) (161,793)

Loans transferred (to) from held-for-sale — — — 1,887 (205,669)

Total provision 34,964 236,023 (298,425) (218,789) 279,570

Total provisions (2)

121,112 34,964 236,023 (298,425) (218,789)

Net charge-offs:

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Net charge-offs (332,084) (373,727) (385,679) (200,097) (181,305)

Ending Balance $ 1,335,105 $ 1,353,631 $ 1,158,977 $ 1,355,844 $ 374,300

Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized (2)

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

Allowance for unfunded loan commitments, beginning balance (1)

112,962 124,924 72,713 110,044 2,481

Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment (2)(3)(4)

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

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

Provision (2)(3)

283,393 308,275 396,521 264,324 312,613

Allowance coverage of net charge-offs 3.57 3.51 5.79 7.48 2.04

Transfer to allowance for loan losses (311,787) (320,237) (344,310) (301,655) (320,808)

Allowance for unfunded loan commitments, ending balance (1)

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

Total allowance for credit losses, ending balance $ 1,520,488 $ 1,448,067 $ 1,478,555 $ 1,231,690 $ 1,465,888

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

Allowance for loan losses coverage of net charge-offs 4.32 3.57 3.51 5.79 7.48

Net charge-offs as a percentage of average loans in repayment (4)

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$ 16,106,751 $ 15,409,814 $ 15,129,550 $ 15,511,212 $ 14,304,821

Accrued interest to be capitalized (2)

$ 1,203,357 $ 936,837 $ 947,391 $ 973,201 $ —

Accrued interest to be capitalized on loans in repayment (2)(4)

$ 435,807 $ 324,384 $ 312,537 $ 308,655 $ —

(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.

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

Total accrued interest receivable $ 1,549,415 $ 1,354,565 $ 1,177,562 $ 1,187,123 $ 1,168,895

(1) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet.

See Notes to Consolidated Financial Statements, Note 6, “Allowance for Credit Losses and Unfunded Loan Commitments” in this Form 10-K for a summary of the activity in the allowance for and balance of unfunded loan commitments.

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

(3) Includes incremental provision for new commitments and changes to provision for existing commitments.

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

(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.

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

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;

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

the allowance as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable;

and delinquency and forbearance percentages.

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.

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.

“Gap year” loans refer to loans to

2024 Form 10-K — SLM CORPORATION 64

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

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.

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.

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

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

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

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

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

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

Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter requirements for delinquent borrowers.

Using forbearance extends the original term of the loan by the term of forbearance taken.

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Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however.

We grant forbearance through our servicing centers to borrowers who are current in their payments and through our collections centers to certain borrowers who are delinquent.

Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter payment requirements for delinquent borrowers.

We view the population of borrowers that use forbearance positively because the borrowers are either proactively reaching out to us to obtain assistance in managing their obligations or are working with our collections center to bring their loans current.

Forbearance may be granted through our servicing centers to customers who are exiting their grace period, and to other customers who are current in their payments, to provide temporary payment relief.

In these circumstances, a customer’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time.

At the end of the forbearance period, the customer will enter repayment status as current and is expected to begin making scheduled monthly payments.

Forbearance may also be granted through our collections centers to customers who are delinquent in their payments.

If specific payment requirements are met, the forbearance can cure the delinquency and the customer is returned to a current repayment status.

Forbearance as a collection tool is used most effectively when applying historical experience and our judgment to a customer’s unique situation.

We leverage updated customer information and other decision support tools to best determine who will be granted forbearance based on our expectations as to a customer’s ability and willingness to repay their obligation.

This strategy is aimed at assisting customers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans.

In most instances, we require one payment, as an indication of a customer’s willingness and ability to repay, before granting forbearance to delinquent borrowers.

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.

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

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

In these circumstances, a borrower’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time.

At the end of the forbearance period, for borrowers who were current when they entered forbearance, or those who were delinquent but met specific payment requirements curing their delinquency, the borrower will enter repayment status as current.

In all instances, the borrowers are expected to begin making scheduled monthly payments at the end of their forbearance periods.

This strategy is aimed at assisting borrowers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans.

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

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

Management continually monitors our credit administration practices and may periodically modify these practices based upon performance, industry conventions, and/or regulatory feedback.

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.

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

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

This required period of positive payment performance does not apply, however, to forbearances granted during the first six months following a borrower’s grace period and is not required for a borrower to receive a contractual interest rate reduction.

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

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

We also now count the

68 SLM CORPORATION — 2023 Form 10-K

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.

In the fourth quarter of 2023, we developed additional modification programs tailored to the financial condition of individual borrowers.

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.

Other borrowers experiencing severe hardship may not require as much assistance, however, given their circumstances.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

2024 Form 10-K — SLM CORPORATION 65

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

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

Following modification, borrowers who are delinquent but meet specific payment requirements curing their delinquency will be brought current.

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

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

Delinquency Trends by Active Repayment Status

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

2023 Form 10-K — SLM CORPORATION 69

As of December 31, 2024

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Deferred origination costs and unamortized premium/(discount) 103

Allowance for credit losses (1,335)

Allowance for loan losses (1,436)

Total Private Education Loans, net $ 20,902

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

2024 Form 10-K — SLM CORPORATION 66

As of December 31, 2023

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Deferred origination costs and unamortized premium/(discount) 81

Allowance for credit losses (1,354)

Allowance for loan losses (1,335)

Total Private Education Loans, net $ 19,772

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 %

70 SLM CORPORATION — 2023 Form 10-K

As of December 31, 2022

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Deferred origination costs and unamortized premium/(discount) 70

Allowance for credit losses (1,159)

Allowance for loan losses (1,354)

Total Private Education Loans, net $ 19,020

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 %

2024 Form 10-K — SLM CORPORATION 67

Private Education Loans Held for Investment Types

The following table provides information regarding the loans in repayment balance and total loan balance by Private Education Loan held for investment product type for the years ended December 31, 2024 and 2023.

As of December 31, 2023 (dollars in thousands) Signature and

Other Parent Loan (1)

Smart Option Career

As of December 31, 2024 (dollars in thousands) Smart Option Graduate

Loan Other (1)

$ in repayment (2)

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$ in total $ 19,710,266 $ 2,067,468 $ 457,274 $ 22,235,008

As of December 31, 2022 (dollars in thousands) Signature and

Other Parent Loan (1)

Smart Option Career

As of December 31, 2023 (dollars in thousands) Smart Option Graduate

Loan Other (1)

$ in repayment (2)

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$ in total $ 18,764,200 $ 1,750,814 $ 510,830 $ 21,025,844

(1) Other includes our Parent Loan and Career training loan products.

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

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

2023 Form 10-K — SLM CORPORATION 71

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans held for investment.

The following table provides information regarding accrued interest receivable on our Private Education Loans.

The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest.

The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on that loan in that month.

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.

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.

The allowance for credit losses considers both the collectibility of principal and accrued interest.

The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses.

Private Education Loans

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December 31, 2020 $ 1,168,895 $ 4,354 $ 4,467

(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.

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.

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.

72 SLM CORPORATION — 2023 Form 10-K

(1) The allowance for uncollectible interest at December 31, 2024, 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, 2024, 2023, 2022, 2021, and 2020, relates to $164 million, $151 million, $240 million, $240 million, and $196 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized.

The accrued interest receivable that is/was expected to be capitalized ($1.4 billion, $1.2 billion, $937 million, $947 million, and $973 million, respectively, at December 31, 2024, 2023, 2022, 2021, and 2020) is/was reserved for in the allowance for credit losses.

2024 Form 10-K — SLM CORPORATION 68

Liquidity and Capital Resources

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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.

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.

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 and $8.0 billion of our deposit total as of December 31, 2023 and December 31, 2022, respectively.

The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.

At December 31, 2024 and December 31, 2023, our sources of liquidity included liquid investments with unrealized losses of $105.8 million and $128.9 million, respectively.

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

As the Bank has grown, we have improved our liquidity stress testing practices to align more closely with the industry, which resulted in our adopting increased liquidity requirements.

Beginning in the second quarter of 2019, we began to increase our liquidity levels by increasing cash and marketable investments held as part of our ongoing efforts to enhance our ability to maintain a strong risk management position.

By early 2020 and continuing through 2023, we held a significant liquidity buffer of cash and securities, which we expect to maintain through 2024.

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

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

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(1) This amount will be used primarily to originate Private Education Loans at the Bank.

2023 Form 10-K — SLM CORPORATION 73

Average Balances

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(1) This amount will be used primarily to originate Private Education Loans at the Bank.

2024 Form 10-K — SLM CORPORATION 69

The following table summarizes total deposits.

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Our total deposits of $21.1 billion were comprised of $9.5 billion in brokered deposits and $11.6 billion in retail and other deposits at December 31, 2024, compared with total deposits of $21.7 billion, which were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and other deposits, at December 31, 2023.

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.

Interest-bearing deposits as of December 31, 2024 and 2023 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposit accounts (“MMDAs”), and retail and brokered CDs.

Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core.

These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.0 billion of our deposit total as of December 31, 2024, compared with $7.6 billion at December 31, 2023.

Some of our deposit products are serviced by third-party providers.

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

74 SLM CORPORATION — 2023 Form 10-K

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

Accrued interest on deposits was $92 million and $91 million at December 31, 2024 and 2023, respectively.

2024 Form 10-K — SLM CORPORATION 70

Counterparty Exposure

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All derivative contracts entered into by the Bank are covered under CSAs or clearinghouse agreements and require collateral to be exchanged based on the net fair value of derivatives with each counterparty.

Our exposure is limited to the value of the derivative contracts in a gain position, less any collateral held by us and plus collateral posted with the counterparty.

Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position, less any collateral held by us and plus collateral posted with the counterparty.

Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk.

1 unchanged sentence

All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement.

As of December 31, 2023, $1.8 billion notional of our derivative contracts were cleared on the CME and $0.1 billion were cleared on the LCH.

The derivative contracts cleared through the CME and LCH represent 92.6 percent and 7.4 percent, respectively, of our total notional derivative contracts of $1.9 billion at December 31, 2023.

As of December 31, 2024, $850 million notional of our derivative contracts were cleared on the CME and $71 million were cleared on the LCH.

The derivative contracts cleared through the CME and LCH represent 92.3 percent and 7.7 percent, respectively, of our total notional derivative contracts of $921 million at December 31, 2024.

For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative.

1 unchanged sentence

Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).

Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.

Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted.

When there is a net negative exposure, we consider our exposure to the counterparty to be zero.

At December 31, 2023 and 2022, we had a net positive exposure (derivative gain positions to us, less collateral held by us, and plus collateral posted with counterparties) related to derivatives of $9 million and $12 million, respectively.

At December 31, 2024 and 2023, we had a net positive exposure (derivative gain/loss positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $5 million and $9 million, respectively.

We have liquidity exposure related to collateral movements between us and our derivative counterparties.

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In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S.

Basel III regulatory capital requirements.

Basel Ill regulatory capital requirements.

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.

3 unchanged sentences

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

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

On January 1, 2024, an additional 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes.

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

76 SLM CORPORATION — 2023 Form 10-K

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.

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

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

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

2024 Form 10-K — SLM CORPORATION 72

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

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

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Amounts for the Year Ended Phase-In

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

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

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

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

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

The Bank’s required and actual regulatory capital amounts and ratios under U.S.

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

Basel III are shown in the following table.

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

The capital ratios would remain above the U.S.

Basel III well capitalized thresholds if the unrealized loss became fully recognized into capital.

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

Minimum Requirements Plus Buffer (1)(2)

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2024 Form 10-K — SLM CORPORATION 73

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC.

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

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The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein.

The Bank declared $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.

“Business — Supervision and Regulation — Regulation of Sallie Mae Bank — Dividends and Share Repurchase Programs,” regarding the expectation that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under the share repurchase programs.

See also Part I, Item 1A.

The Bank declared $570 million, $550 million, and $700 million in dividends to the Company for the years ended December 31, 2024, 2023, and 2022, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends.

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

“Risk Factors — GENERAL RISKS” for possible limitations on the payments of our dividends.

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Secured Financings

On May 16, 2023, we amended our Secured Borrowing Facility to extend the maturity of the facility.

The amount that can be borrowed under the facility is $2 billion.

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

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

Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances.

The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until May 15, 2024.

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.

For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in this Form 10-K.

78 SLM CORPORATION — 2023 Form 10-K

Short-term borrowings have a remaining term to maturity of one year or less.

The Secured Borrowing Facility’s contractual maturity is two years from the date of inception or renewal (one-year revolving period plus a one-year amortization period);

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

The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on June 13, 2026 (or earlier, if certain material adverse events occur).

The one-year revolving period plus the one-year amortization period results in a contractual maturity that is two years from the date of inception or renewal;

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

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

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

2024 Form 10-K — SLM CORPORATION 74

Long-term Borrowings

Unsecured Debt

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

Unsecured Financing Transactions

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

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

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

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

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

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

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

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

Secured Financings

2023 Transactions

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.

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.

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.

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.

We sold $568 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $568 million of gross proceeds.

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.

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

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.

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.

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

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

Secured Financing Transactions

The following summarizes those Private Education Loan Trust term ABS issued in 2023 and 2024 in which we retained 100 percent of the residual class certificates.

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

Notes Issued Gross

Proceeds Weighted Average

Cost of Funds (2)

Weighted Average Life

(in years) of Class A and Class B Notes

(Dollars in thousands)

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

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

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

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

2024-E ABS Transaction August 14, 2024 944,645 868,000 867,743 SOFR plus 1.42%

2024-F ABS Transaction November 6, 2024 732,445 680,000 679,981 SOFR plus 1.08%

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

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

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

SMB Private Education Loan Trust Loan Principal Capitalized

Interest Total Loans

(Dollars in thousands)

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

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

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

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

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

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

Total 2024 $ 2,150,266 177,337 $ 2,327,603

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

2024 Form 10-K — SLM CORPORATION 75

Pre-2023 Transactions

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All borrowings at the Window must be fully collateralized.

We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window.

We can pledge asset-backed and mortgage-backed securities, as well as Private Education Loans, to the FRB as collateral for borrowings at the Window.

Generally, collateral value is assigned based on the estimated fair value of the pledged assets.

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We did not utilize this facility in the years ended December 31, 2024 and 2023.

2023 Form 10-K — SLM CORPORATION 79

Contractual Loan Commitments

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As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters).

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

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

At December 31, 2023, we had a $113 million reserve recorded in “Other Liabilities” to cover expected losses that may occur during the one-year loss emergence period on these unfunded commitments.

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

Contractual Cash Obligations

In addition to our contractual loan commitments, we have certain other contractual cash obligations and commitments.

This includes contractual principal obligations associated with long-term Bank deposits, secured borrowings, unsecured debt, and lease obligations.

These include contractual principal obligations associated with long-term Bank deposits, secured borrowings, unsecured debt, and lease obligations.

Our material contractual cash obligations relate to Bank deposits.

At December 31, 2023, we had $5.1 billion of principal obligations related to Bank deposits due in the next year, and $11.0 billion thereafter.

At December 31, 2023, our contractual cash obligations due in the next year for secured borrowings and lease obligations were $724 million and $7 million, respectively, and our contractual cash obligations due thereafter for our secured borrowings, unsecured debt, and lease obligations were $3.5 billion, $1.0 billion, and $31 million, respectively.

At December 31, 2024, we had $7.8 billion of principal obligations related to Bank deposits due in the next year, and $7.7 billion due thereafter.

At December 31, 2024, our contractual cash obligations due in the next year for secured borrowings, unsecured debt, and lease obligations were $824 million, $500 million, and $7 million, respectively, and our contractual cash obligations due thereafter for our secured borrowings, unsecured debt, and lease obligations were $4.6 billion, $500 million, and $27 million, respectively.

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

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See Notes to Consolidated Financial Statements, Note 12, “Stockholders’ Equity” in this Form 10-K for additional details.

Arrangements with Navient Corporation

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.

The majority of these agreements were transitional in nature with most having terms that have expired.

In the case of the loan servicing and administration agreement for those FFELP Loans that we hold and Navient services for us, the agreement is scheduled to expire or be renewed by the end of 2026.

We continue to have exposure to risks related to Navient’s creditworthiness.

If we are unable to obtain indemnification payments from Navient, our results of operations and financial condition could be materially and adversely affected.

We briefly summarize below some of the most significant agreements and relationships we continue to have with Navient.

For additional information regarding the Separation and Distribution Agreement and the other ancillary agreements, see our Current Report on Form 8-K filed on May 2, 2014.

Separation and Distribution Agreement

The Separation and Distribution Agreement addresses, among other things, the following activities:

• the obligation of each party to indemnify the other against liabilities retained or assumed by that party pursuant to the Separation and Distribution Agreement and in connection with claims of third parties;

• the allocation among the parties of rights and obligations under insurance policies;

• 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.

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.

If for any reason Navient is unable or unwilling to pay claims made against it, our costs, operating expenses, cash flows, and financial condition could be materially and adversely affected over time.

Indemnification Obligations

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

Some significant examples of the types of indemnification obligations Navient has under the Separation and Distribution Agreement and related ancillary agreements include:

• Navient is required to indemnify the Company and the Bank for any liabilities, costs, or expenses they may incur arising from any action or threatened action related to the servicing, operations, and collections activities of pre-Spin-Off SLM and its subsidiaries with respect to Private Education Loans and FFELP Loans that were assets of the Bank or Navient at the time of the Spin-Off;

provided that written notice was provided to Navient on or prior to April 30, 2017, the third anniversary date of the Spin-Off.

Navient is not required to indemnify for changes in law or changes in prior existing interpretations of law that occur on or after April 30, 2014.

• 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.

As of December 31, 2023, the remaining balance of the indemnification receivable related to those uncertain tax positions was zero.

Long-Term Arrangements

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.

The tax sharing agreement governs the respective rights, responsibilities, and obligations of us and Navient after the Spin-Off relating to taxes, including with respect to the payment of taxes, the preparation and filing of tax returns, and the conduct of tax contests.

Under this agreement, each party is generally liable for taxes attributable to its business.

The agreement also addresses the allocation of tax liabilities that are incurred as a result of the Spin-Off and related transactions.

2024 Form 10-K — SLM CORPORATION 76

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This method requires us to project future principal and interest cash flows on our loans in those portfolios.

To estimate the future expected cash flows, we use a vintage-based model that considers life of loan loss expectations, prepayments, defaults, recoveries, and any other adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date.

To estimate the future expected cash flows, we use statistical loan-level models that consider life of loan expectations for defaults, prepayments, recoveries, and any other qualitative adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date.

These cash flows are discounted at the loan’s effective interest rate to calculate the present value of those cash flows.

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We have elected to report the entire change in present value as credit loss expense.

In determining the loss rates used for the vintage-based approach, we start with our historical loss rates, stratify the loans within each vintage, and then adjust the loss rates based upon economic factors forecasted over a reasonable and supportable forecast period.

We estimate future default rates used in our current expected credit losses at a loan level using historical loss experience, current borrower characteristics, current conditions, and economic factors forecasted over a reasonable and supportable period.

At the end of the reasonable and supportable forecast period, we immediately revert our forecasted economic factors to long-term historical averages.

We estimate future prepayment speeds used in our current expected credit losses at a loan level using historical prepayment experience, current borrower characteristics, current conditions, and economic factors forecasted over a reasonable and supportable period.

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.

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.

In estimating our current expected credit losses, we use a combination of expected economic scenarios coupled with our historical experience to derive a base case adjusted for any qualitative factors (as described below).

In estimating future default rates and prepayment speeds in our current expected credit losses, we use a combination of expected economic scenarios coupled with our historical experience and adjust for any qualitative factors (as described below).

We also develop an adverse and favorable economic scenario.

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

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

We use historical experience and economic forecasts to estimate future prepayment speeds.

At the end of the two-year reasonable and supportable forecast for prepayments, we immediately revert to our historical long-term prepayment rates.

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

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

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

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

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

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

2024 Form 10-K — SLM CORPORATION 77

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

These 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.

82 SLM CORPORATION — 2023 Form 10-K

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

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

If actual future performance in delinquency, charge-offs, and recoveries is significantly different than estimated, or management assumptions or practices were to change, this could materially affect the estimate of the allowance for credit losses, the timing of when losses are recognized, and the related provision for credit losses on our consolidated statements of income.

When calculating our allowance for credit losses and liability for unfunded commitments, we incorporate several inputs that are subject to change period to period.

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• Weighting of economic forecasts;

• Prepayment speeds;

• Recovery rates.

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.

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.

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

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

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

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

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

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

At December 31, 2021, December 31, 2022, and December 31, 2023, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively.

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

In 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.

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.

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

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

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

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.

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.

In the second quarter of 2024, we implemented a loan-level future default rate model that includes current portfolio characteristics and forecasts of real gross domestic product and college graduate unemployment.

In the second quarter of 2024, we also implemented a future prepayment speeds model to include forecasts of real gross domestic product, retail sales, SOFR, and the U.S.

10-year treasury rate.

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

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

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

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

2024 Form 10-K — SLM CORPORATION 78

A 100-basis point increase or decrease in the following inputs to the CECL loss model is estimated to change the allowance as follows:

Estimated Increase (Decrease) to the Allowance for Credit Losses (1)

(Dollars in millions) +100 Basis Points -100 Basis Points

College graduate unemployment rate (2)

$ 62,135 $ (85,010)

Prepayment speeds (2)

(16,453) 16,528

Recovery rates (3)

(17,402) 17,402

(1) Based on our Private Education Loan Portfolio at December 31, 2023.

(2) The estimated impacts of changes 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 will not change.

(3) The estimated change in the recovery rate is based on long-term assumptions.

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.

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.

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

Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in our allowance for credit losses as of December 31, 2024 of $177 million or 11.6 percent.

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

These scenarios do not reflect our current expectations as of December 31, 2024, nor do they capture other qualitative adjustments or all the potential unknown variables that could arise in the forecast periods, but they provide an approximation of possible outcomes under hypothetical pessimistic conditions.

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

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

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

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

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

2024 Form 10-K — SLM CORPORATION 79

Key Credit Quality Indicators - Private Education Loans

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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.

84 SLM CORPORATION — 2023 Form 10-K

existence of a cosigner lowers the likelihood of default as well.

The 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.

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Previously, we used a mix of in-house collectors and sales to third parties.

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.

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

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

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As part of concluding on the adequacy of the allowance for credit losses for Private Education Loans, we review key allowance and loan metrics.

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

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;

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

the allowance as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable;

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.

Adoption of ASU No.

2022-02, “Troubled Debt Restructurings and Vintage Disclosures”

On March 31, 2022, the FASB issued ASU No.

2022-02, “Troubled Debt Restructurings and Vintage Disclosures” (“ASU No.

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.

Information about modifications in periods before adoption is not required to be provided.

2022-02 also requires that entities disclose current-period gross charge-offs by year of origination.

For entities that have adopted the amendments in CECL, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption of the amendments in ASU No.

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.

We elected to early adopt all aspects of ASU No.

2022-02 prospectively for the period beginning January 1, 2022.

The adoption was immaterial to our consolidated financial statements.

Troubled Debt Restructurings

For the year ended December 31, 2021, the allowance for our TDR portfolio was included in our overall allowance for Private Education Loans.

In estimating the expected defaults for our Private Education Loans that were considered TDRs, we followed the same discounted cash flow process described above but used the historical loss rates related to past TDR loans.

The appropriate gross loss rates were determined for each individual loan by evaluating loan maturity, risk characteristics, and macroeconomic conditions.

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.

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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.

Prior to January 1, 2022, we classified a loan as a TDR due to forbearance using a two-step process.

The first step was to identify a loan that was in full principal and interest repayment status and received more than three months of forbearance in a 24-month period;

however, during the first nine months after a loan had entered full principal and interest repayment status, we did not count up to the first six months of forbearance received during that period against the three-month policy limit.

The second step was to evaluate the creditworthiness of the loan by examining its most recent refreshed FICO score.

Loans that met the criteria in the first test and had a FICO score above a certain threshold (based on the most recent quarterly FICO score refresh) were not classified as TDRs.

Loans that met the criteria in the first test and had a FICO score under the threshold (based on the most recent quarterly FICO score refresh) were classified as TDRs.

A loan also became a TDR when it was modified to reduce the interest rate on the loan (regardless of when such modification occurred and/or whether such interest rate reduction was temporary).

Once a loan qualified for TDR status, it remained a TDR for allowance purposes for the remainder of its life.

About half our loans that were considered TDRs involved a temporary forbearance of payments and did not change the contractual interest rate of the loan.

Off-Balance Sheet Exposure for Contractual Loan Commitments

4 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.

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Uncollectible Interest

1 unchanged sentence

The accrued interest on these loans will be capitalized and increase the unpaid principal balance of the loans when the borrower exits the grace period after separation from school.

The discounted cash flow approach described above considers both the collectability of principal as well as this portion of accrued interest that is expected to capitalize to the balance of the loan.

Therefore, the allowance for this portion of accrued interest balance is included in our allowance for credit losses.

The discounted cash flow approach does not consider interest accrued on loans that are in a full principal and interest repayment status or in interest-only repayment status.

We separately capture the amount of expected uncollectible interest associated with these loans using historical experience to estimate the uncollectible interest for the next four months at each period-end date.

The discounted cash flow approach and the allowance for credit losses described above consider both the collectability of principal and accrued interest.

The allowance for uncollectible interest estimates the additional uncollectible interest that is not captured in the allowance for credit losses.

The allowance for uncollectible interest uses historical experience to estimate the uncollectible interest on loans for which payment in full of principal or interest is not expected.

This amount is recorded as a reduction of interest income.

1 unchanged sentence

Allowance for FFELP Loan Losses

During the third quarter of 2024, we transferred our FFELP Loan portfolio to loans held for sale as we planned to sell our FFELP Loan portfolio.

At that time, we wrote down this loan portfolio to its estimated fair value through an adjustment to the allowance for credit losses of $8 million.

We subsequently sold the FFELP Loan portfolio to a third party in the fourth quarter of 2024.

FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement.

These insurance obligations are supported by contractual rights against the United States.

For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims.

For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims.

For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement.

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

We use the gross loss approach when estimating the allowance for credit losses for the unguaranteed portion of our FFELP Loans.

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

The allowance for FFELP Loan losses uses historical experience of customer default behavior.

We apply the default rate projections, net of applicable risk sharing, to our FFELP Loans for the current period to perform our quantitative calculation.

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.

86 SLM CORPORATION — 2023 Form 10-K

For loans disbursed on or after July 1, 2006, owners receive 97 percent reimbursement on all qualifying claims.

For loans disbursed after October 1, 1993, and before July 1, 2006, owners receive 98 percent reimbursement on all qualifying claims.

For loans disbursed prior to October 1, 1993, owners receive 100 percent reimbursement.

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

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

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

The allowance for FFELP Loan losses used historical experience of customer default behavior.

We applied the default rate projections, net of applicable risk sharing, to our FFELP Loans for the relevant period to perform our quantitative calculation.

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

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Risk Management

5 unchanged sentences

The Board of Directors has oversight of key policies as well as the risk management framework developed and administered by the management team.

We have a robust process to escalate meaningful departures from our risk appetite statements to the Board.

We also have a process that is designed to escalate meaningful departures from our risk appetite statements to the Board.

The Board of Directors oversees the continued development of the risk management framework.

13 unchanged sentences

Compliance with our risk appetite is monitored using a set of risk metrics, with defined thresholds and limits, for each risk category.

The Enterprise Risk Committee provides oversight of the risk appetite standard with escalation to the Board of Directors, as appropriate.

The management-level Enterprise Risk Committee provides oversight of the risk appetite standard with escalation to the Board of Directors, as appropriate.

Board of Directors Committee Structure

We have a robust Board of Directors committee structure as outlined below that facilitates oversight, effective challenge, and escalation of risk and control issues .

We have a Board of Directors committee structure as outlined below that facilitates oversight, effective challenge, and escalation of risk and control issues .

• Financial Risk Committee.

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

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

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

management culture.

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

• Audit Committee .

2 unchanged sentences

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.

• Compensation Committee .

The Compensation Committee assists the Board of Directors in fulfilling its oversight responsibilities related to the compensation and benefits of our Chief Executive Officer (“CEO”) and the non-employee members of the Board of Directors, our incentive compensation and benefits practices for employees of all levels, and management’s succession planning.

Additionally, the Compensation Committee provides oversight of human capital management, including in the areas of diversity, equity, and inclusion.

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

• Preferred Stock Committee.

23 unchanged sentences

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

Annually, Internal Audit performs an 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.

88 SLM CORPORATION — 2023 Form 10-K

Annually, Internal Audit performs an

2024 Form 10-K — SLM CORPORATION 83

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

Risk Categories

36 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.

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Our liquidity risk activities are centralized within our Corporate Finance department, which is responsible for developing and executing our funding strategy.

1 unchanged sentence

Liquidity risks are overseen and recommendations approved primarily through ALCO.

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

The Financial Risk Committee of our Board of Directors is

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

Operational Risk .

13 unchanged sentences

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

90 SLM CORPORATION — 2023 Form 10-K

2024 Form 10-K — SLM CORPORATION 85

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

What changed 10-K

Item 7. Management’s Discussion and Analysis