UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☑
ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
For the fiscal year ended December 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
☐
ACT OF 1934
For the transition period from to
Commission file number 001-13251
SLM Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
300 Continental Drive
(Address of principal executive offices)
Newark,
Delaware
52-2013874
(I.R.S. Employer
Identification No.)
19713
(Zip Code)
(302) 451-0200
(Registrant’s Telephone Number, Including Area Code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $.20 per share
Floating Rate Non-Cumulative Preferred Stock, Series B, par value $.20 per share
SLM
SLMBP
The NASDAQ Global Select Market
The NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act. (Check one):
☑
☐
☐
Large accelerated filer
Non-accelerated filer
Emerging growth company
Accelerated filer ☐
Smaller reporting company ☐
(Do not check if a smaller reporting company)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of voting common stock held by non-affiliates of the Registrant as of June 30, 2023 was $3.7 billion (based on closing sale price
of $16.32 per share as reported for the NASDAQ Global Select Market).
As of January 31, 2024, there were 220,349,715 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement relating to the Registrant’s 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual
Report on Form 10-K.
Auditor Name:
KPMG LLP Auditor Location:
McLean, Virginia
Auditor Firm ID:
185
SLM CORPORATION
TABLE OF CONTENTS
Forward-Looking and Cautionary Statements
Available Information
PART I.
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4. Mine Safety Disclosures
PART II.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Item 6.
Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Impact of COVID-19 on Sallie Mae
Key Financial Measures
Strategic Imperatives
Results of Operations
Financial Condition
Liquidity and Capital Resources
Critical Accounting Policies and Estimates
Risk Management
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III.
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV.
Item 15. Exhibits, Financial Statement Schedules
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FORWARD-LOOKING AND CAUTIONARY STATEMENTS
References in this Annual Report on Form 10-K to “we,” “us,” “our,” “Sallie Mae,” “SLM,” and the “Company”
refer to SLM Corporation and its subsidiaries, except as otherwise indicated or unless the context otherwise
requires.
This Annual Report on Form 10-K contains “forward-looking” statements and information based on
management’s current expectations as of the date of this report. Statements that are not historical facts, including
statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future
events, are forward-looking statements. This includes, but is not limited to: statements regarding future
developments surrounding COVID-19 or any other pandemic, including, without limitation, statements regarding the
potential impact of COVID-19 or any other pandemic on the Company’s business, results of operations, financial
condition, and/or cash flows; our expectation and ability to pay a quarterly cash dividend on our common stock in
the future, subject to the determination by our Board of Directors, and based on an evaluation of our earnings,
financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks,
and uncertainties; the Company’s 2024 guidance; the Company’s three-year horizon outlook; the Company’s
expectation and ability to execute loan sales and share repurchases; the Company’s projections regarding
originations, net charge-offs, non-interest expenses, earnings, balance sheet position, and other metrics; any
estimates related to accounting standard changes; and any estimates related to the impact of credit administration
practices changes, including the results of simulations or other behavioral observations. Forward-looking statements
are subject to risks, uncertainties, assumptions, and other factors that may cause actual results to be materially
different from those reflected in such forward-looking statements. These factors include, among others, the risks
and uncertainties set forth in Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K and
subsequent filings with the Securities and Exchange Commission (“SEC”); the societal, business, and legislative/
regulatory impact of pandemics and other public heath crises; increases in financing costs; limits on liquidity;
increases in costs associated with compliance with laws and regulations; failure to comply with consumer
protection, banking, and other laws; changes in accounting standards and the impact of related changes in
significant accounting estimates, including any regarding the measurement of our allowance for credit losses and
the related provision expense; any adverse outcomes in any significant litigation to which we are a party; credit risk
associated with our exposure to third-parties, including counterparties to our derivative transactions; and changes in
the terms of education loans and the educational credit marketplace (including changes resulting from new laws and
the implementation of existing laws). We could also be affected by, among other things: changes in our funding
costs and availability; reductions to our credit ratings; cybersecurity incidents, cyberattacks, and other failures or
breaches of our operating systems or infrastructure, including those of third-party vendors; damage to our
reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting
programs and the adverse effects of such initiatives on our business; changes in the demand for educational
financing or in financing preferences of lenders, educational institutions, students, and their families; changes in law
and regulations with respect to the student lending business and financial institutions generally; changes in banking
rules and regulations, including increased capital requirements; increased competition from banks and other
consumer lenders; the creditworthiness of our customers; changes in the general interest rate environment,
including the rate relationships among relevant money-market instruments and those of our earning assets versus
our funding arrangements; rates of prepayment on the loans that we own; changes in general economic conditions
and our ability to successfully effectuate any acquisitions; and other strategic initiatives. The preparation of our
consolidated financial statements also requires us to make certain estimates and assumptions, including estimates
and assumptions about future events. These estimates or assumptions may prove to be incorrect. All forward-
looking statements contained in this Annual Report on Form 10-K are qualified by these cautionary statements and
are made only as of the date of this report. We do not undertake any obligation to update or revise these forward-
looking statements to conform such statements to actual results or changes in our expectations.
2023 Form 10-K — SLM CORPORATION 1
AVAILABLE INFORMATION
Our website address is www.salliemae.com. Copies of our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, and Current Reports on Form 8-K, as well as any amendments to those reports, and our Proxy
Statements and any significant investor presentations, are available free of charge through our website as soon as
reasonably practicable after they are electronically filed with, or furnished to, the SEC. The SEC maintains a website
at www.sec.gov that contains all such filed or furnished reports and other information. In addition, copies of our
Board Governance Guidelines, Code of Business Conduct (which includes the code of ethics applicable to our
Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) and the governing charters
for each committee of our Board of Directors are available free of charge on our website, as well as in print, to any
stockholder upon request. We intend to disclose any amendments to or waivers of our Code of Business Conduct
(to the extent applicable to our Principal Executive Officer, Principal Financial Officer, or Principal Accounting
Officer) by posting such information on our website. Information contained or referenced on our website is not
incorporated by reference into and does not form a part of this Annual Report on Form 10-K.
2 SLM CORPORATION — 2023 Form 10-K
PART I.
Item 1. Business
Our Company Mission
SLM Corporation, more commonly known as Sallie Mae, is the premier financial brand in higher education. As
an education solutions company, our mission is to power confidence as students begin their unique journeys. We
support students and families navigating to, through, and immediately after higher education. We simplify the
college planning process and advance higher education access and completion by providing free tools, resources,
scholarships, and responsible financing options.
We believe education, in all forms, is the foundation for success, an equalizer of opportunities, and a proven
pathway to economic mobility. Higher education increases lifetime wages and enables economic mobility. For
example, data from the U.S. Bureau of Labor and Statistics confirms those with bachelor’s degrees earn 68 percent
more than those with a high school diploma.1 Those with advanced degrees earn an even greater percentage than
those with a high school diploma.1 This effect is multigenerational, as children of parents who are college educated
are more likely to earn a bachelor’s degree than students whose parents did not go to college. Most would agree
our society prospers and becomes more economically inclusive when each of its members is provided access to
post-secondary education.2 Education represents a transformative investment in one’s future that yields our
country’s next nurses, teachers, engineers, business leaders, and more.
Our History
While the Sallie Mae name has existed for more than 50 years, the company that operates as Sallie Mae
today, SLM Corporation, was formed in late 2013 and includes its wholly-owned subsidiary, Sallie Mae Bank, an
industrial bank established in 2005 (the “Bank”). On April 30, 2014, we legally separated (the “Spin-Off”) from
another public company that is now named Navient Corporation (“Navient”), which is in the education loan
management, servicing, asset recovery, and consolidation loan business. Navient retained all assets and liabilities
generated prior to the Spin-Off other than those explicitly retained by us pursuant to the Separation and Distribution
Agreement executed in connection with the Spin-Off (the “Separation and Distribution Agreement”). We are a
consumer banking business and did not retain any assets or liabilities generated prior to the Spin-Off other than
those explicitly retained by us pursuant to the Separation and Distribution Agreement. We sometimes refer to the
company that existed prior to the Spin-Off as “pre-Spin-Off SLM.”
Our principal executive offices are located at 300 Continental Drive, Newark, Delaware 19713. Additionally, we
have offices in New Castle, Delaware; Salt Lake City, Utah; Indianapolis, Indiana; Newton, Massachusetts; and
Sterling, Virginia. Our telephone number is (302) 451-0200.
______________________
1 “Education pays, 2022,” Career Outlook, U.S. Bureau of Labor Statistics, May 2023.
2 https://research.collegeboard.org/trends/education-pays
2023 Form 10-K — SLM CORPORATION 3
Our Business
Our business is focused and aligned to strategic imperatives that set the foundation for our continued success.
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.
Private Education Loans
Our primary business is to originate and service high-quality Private Education Loans. “Private Education
Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or
federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance
Corporation (the “FDIC”). We serve more families than any other private student loan lender. We originated
approximately $6.4 billion of Private Education Loans in 2023, an increase of 7 percent from the year ended
December 31, 2022. As of December 31, 2023, we had $19.8 billion of Private Education Loans held for investment,
net, outstanding.
Our Private Education Loans serve primarily to bridge the gap between the cost of higher education and the
amount funded through family income and savings, scholarships and grants, and federal financial aid. We also
extend Private Education Loans as an alternative to similar federal education loan products where we believe our
rates are competitive.
Our primary Private Education Loan product is the Smart Option Student Loan, which emphasizes in-school
payment features that can produce shorter terms and reduce customers’ total finance charges. Customers generally
elect one of three Smart Option repayment types at the time of loan origination. The first two, interest only and fixed
payment options, require monthly payments while the student is in school and during the grace period thereafter,
and accounted for approximately half of the Private Education Loans the Bank originated during 2023. The third
repayment option is the more traditional deferred Private Education Loan product where customers are not required
to make payments while the student is in school and during the grace period after separation from school. (The
grace period for a Smart Option Student Loan generally runs for six months after the borrower separates from
school, but can run for up to 36 months for a small subset of graduate loans.) Lower interest rates on the interest
only and fixed payment options encourage customers to elect those options, which help customers reduce their total
loan cost compared with the traditional deferred option loan. Approximately half of our customers elect the in-school
repayment option. Making payments while in school helps customers become accustomed to making on-time
regular loan payments. We offer both variable-rate and fixed-rate loans.
We also offer six loan products for specific graduate programs of study. These include the Sallie Mae Law
School Loan, the Sallie Mae MBA Loan, the Sallie Mae Graduate School Loan for Health Professions, the Sallie
Mae Medical School Loan, the Sallie Mae Dental School Loan, and the Sallie Mae Graduate School Loan. These
products were designed to address the specific needs of graduate students, such as extended grace periods for
medical students.
We regularly review and update the terms of our Private Education Loan products. As a holder of Private
Education Loans, we bear the full credit risk of the customers. We manage this risk by underwriting and pricing
based on customized credit scoring criteria and the addition of qualified cosigners. For Private Education Loans
originated during the year ended December 31, 2023, our average FICO scores (representing the higher credit
scores of the cosigners or borrowers) at the time of original approval were 748, and approximately 87.5 percent of
those loans were cosigned. In addition, for all loans other than Bar Study loans and Residency and Relocation
loans, we require school certification of both the need for, and the amount of, every Private Education Loan we
originate (to prevent unnecessary borrowing beyond a school’s cost of attendance), and we disburse the loan
proceeds directly to the higher education institutions to ensure loan proceeds are applied directly to the student’s
education expenses.
4 SLM CORPORATION — 2023 Form 10-K
The core of our marketing strategy is to promote our products on campuses through financial aid offices as
well as through online and direct marketing to students and families. Our on-campus efforts with approximately
2,100 higher education institutions are actively managed by our relationship management team, the largest in the
industry, which has become a trusted resource for financial aid offices.
Our loans are high credit quality and the overwhelming majority of our customers manage their payments with
great success. Private Education Loans in repayment include loans on which customers 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. At December 31, 2023, 3.9 percent of Private Education Loans (held for investment) in repayment
were 30 days or more delinquent, and Private Education Loans (held for investment) in forbearance were
2.1 percent of loans in repayment and forbearance. In 2023, Private Education Loan net charge-offs as a
percentage of average loans in repayment were 2.44 percent.
Sallie Mae Bank
The Bank, which is regulated by the Utah Department of Financial Institutions (the “UDFI”), the FDIC, and the
Consumer Financial Protection Bureau (the “CFPB”), offers traditional savings products, such as high-yield savings
accounts, money market accounts, and certificates of deposit (“CDs”), originates Private Education Loans, and
manages a loan portfolio that also includes loans insured or guaranteed under the previously existing Federal
Family Education Loan Program (“FFELP Loans”). At December 31, 2023, the Bank had total assets of $29.1 billion,
including $19.8 billion of Private Education Loans (held for investment), net, and $534 million of FFELP Loans (held
for investment), and total deposits of $21.9 billion.
Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to
sustain our Private Education Loan originations and achieve other business goals. Our ability to obtain such funding
is dependent, in part, on the capital levels of the Bank and its compliance with other applicable regulatory
requirements. At the time of this filing, there are no regulatory restrictions on our ability to obtain deposit funding or
the interest rates we offer other than those restrictions generally applicable to all FDIC-insured banks of similar
charter and size. We maintained our diversified funding base by raising $1.1 billion in term funding collateralized by
pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market in 2023. This brought our
total ABS funding outstanding at December 31, 2023 to $4.2 billion, or 21 percent of our total Private Education
Loans held for investment portfolio. We plan to continue to use ABS funding, market conditions permitting. This
helps us better match-fund our assets and avoids excessive reliance on deposit funding.
See the subsection titled “Regulation of Sallie Mae Bank” under “Supervision and Regulation” for additional
details about the Bank.
SmartyPig
Our SmartyPig™ product is a free, FDIC-insured, online, goal-based savings account that helps consumers
save for long- and short-term goals. Its tiered interest rates reward consumers for growing their savings. At
December 31, 2023, we had $329 million in SmartyPig deposits.
Credit Cards
In May 2023, we sold our portfolio of credit card loans (“Credit Cards”) 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.
2023 Form 10-K — SLM CORPORATION 5
Our Lending Philosophy
Sallie Mae is committed to responsible lending and encourages responsible borrowing by advising students
and families to follow this three-step approach to paying for higher education:
Start with money you won’t have to pay back. Supplement savings and income by maximizing
scholarships, grants, and work-study.
Explore federal student loans. Explore federal student loan options by completing the Free Application for
Federal Student Aid (“FAFSA”).
Consider a responsible private student loan. Fill the gap between available resources and any
remaining costs of higher education.
The best interests of our customers are front-and-center and integral to our responsible lending philosophy.
We reward financial responsibility, emphasize building good credit, and provide flexible repayment terms to help
customers manage and eliminate debt. We also embed customer protections in our products. To ensure applicants
borrow only what they need to cover their school’s cost of attendance, we actively engage with schools and require
school certification before we disburse a Private Education Loan (except for Bar Study loans and Residency and
Relocation loans). To help applicants understand their loan and its terms, we provide multiple, customized
disclosures explaining the applicant’s interest rate, whether the interest rate is fixed or variable, and the loan’s total
cost under the available repayment options. Our Private Education Loans generally feature (i) no origination fees
and no prepayment penalties, (ii) an interest rate reduction for those who enroll in and make monthly payments
through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv)
a choice of repayment options, (v) a choice of either a variable or fixed interest rate, and (vi) loan forgiveness in the
case of death or permanent disability of the student borrower.
Our Approach to Assisting Students and Families Borrowing and Repaying Private Education Loans
Approximately half of our Private Education Loan customers elect an in-school repayment option. By making
in-school payments, customers learn to establish good repayment patterns, reduce their total loan cost, and
graduate with less debt. We send monthly communications to customers while they are in school, even if they have
no monthly payments scheduled, to keep them informed and encourage them to reduce the amount they will owe
when they leave school.
Some customers transitioning from school to the work force may require more time before they are financially
capable of making full payments of principal and interest. Sallie Mae created a Graduated Repayment Period
program (the “GRP”) to assist borrowers with additional payment flexibility, allowing eligible customers to make
interest-only payments instead of full principal and interest payments for a period of 12 months if they elect within a
specified time frame to participate in the GRP. The time frame for electing to participate in the GRP begins six
months before expiration of a borrower’s grace period and extends until 12 months after the expiration of the grace
period. The 12-month interest-only payments under the GRP begin upon expiration of a borrower’s grace period or
election of the GRP, whichever is later.
Our experience has taught us the successful transition from school to full principal and interest repayment
status involves making and carrying out a financial plan. As customers approach the principal and interest
repayment period on their loans, Sallie Mae engages with them and communicates what to expect during the
transition. In addition, SallieMae.com provides educational content for customers on how to organize loans, set up a
monthly budget, and understand repayment obligations. Examples are provided to help explain how payments are
applied and allocated, and how the accrued interest on alternative repayment programs could affect the cost of
customers’ loans. The site also provides important information on benefits available to servicemembers under the
Servicemembers Civil Relief Act (the “SCRA”).
After graduation, a student borrower may apply for the cosigner to be released from the loan. This option is
available after 12 principal and interest payments are made and the student borrower demonstrates an ability to
assume sole responsibility for repayment of the loan. In the event of a cosigner’s death, the student borrower
automatically continues as the sole individual on the loan with the same terms.
6 SLM CORPORATION — 2023 Form 10-K
If a customer’s account becomes delinquent, our collection teams work with the customer and/or the cosigner
to understand their ability to make ongoing payments. 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. These can include extended repayment schedules, temporary interest rate reductions, in some cases
permanent interest rate reductions, and, if appropriate, short-term hardship forbearance. These arrangements are
suited to the customer’s individual circumstances and ability to make payments. When we grant forbearance, we
counsel customers on the effect forbearance will have on their loan balance. See Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for
Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” for
additional information about our credit administration practices.
Customer Service
We perform the origination, servicing, and collections activities for all of our Private Education Loans with
dedicated representatives assisting customers with various needs, including the military personnel customers who
may be eligible for military benefits. We expect the Bank or affiliates of the Bank to retain servicing of all Private
Education Loans the Bank originates, regardless of whether the loans are held, sold, or securitized.
Over the past few years, we have implemented several improvements in our ability to interact with our loan
customers, including:
•
•
•
•
an integrated platform with customer-centric capabilities that allows self-service and empowers our
servicing and collections agents, thus streamlining our processes and providing efficiencies;
an on-line chat function for application support and customer service related inquires;
a mobile application accessible through smart phones; and
expansion of customer surveys to gain feedback on areas for improvement within our originations,
servicing, and collections functions.
Customer Success
We continue to adapt our business to best serve the needs of families who see us as a trusted advisor and
partner. We are strongly invested in our customers’ success. Of total customers, approximately 96 percent of loans
in repayment are in good standing, and, on average, fewer than 3 percent of loans default annually.
In 2022, we acquired the assets of Epic Research Education Services, LLC, which did business as Nitro
College (“Nitro”). Nitro provides resources that help students and families evaluate how to responsibly pay for
college and manage their financial responsibilities after graduation.
The acquisition of Nitro enhanced future strategic growth opportunities and expanded our digital marketing
capabilities, reduced the cost to acquire customer accounts, and accelerated our progress to become a broader
education solutions provider helping students to, through, and immediately after higher education. In 2024, we plan
to transition the related Nitro branding to the Sallie and Sallie Mae brands and platforms.
In 2023, we completed the acquisition of several key assets of Scholly, Inc. (“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 supports
our mission of providing students with the confidence needed to successfully navigate the higher education journey.
2023 Form 10-K — SLM CORPORATION 7
Key Drivers of Private Education Loan Market Growth
The size of the Private Education Loan market is based primarily on three factors: college enrollment levels,
the costs of attending college, and the availability of funds from the federal government to pay for a college
education. The amounts students and their families can contribute toward college costs and the availability of
scholarships and institutional grants are also important. If the cost of education increases at a pace exceeding the
sum of family income, savings, federal lending, and scholarships, more students and families can be expected to
rely on Private Education Loans. If enrollment levels or college costs decline, or the availability of federal education
loans, grants, or subsidies and scholarships significantly increases, Private Education Loan demand could
decrease.
We focus primarily on students attending public and private not-for-profit four-year degree granting institutions.
We lend to some students attending two-year and for-profit schools. Due to the low cost of two-year programs,
federal grant and loan programs are typically sufficient for the funding needs of these students. Approximately
16 percent or $997 million of our 2023 Private Education Loan originations were for students attending for-profit
schools. The for-profit schools where we continue to do business are primarily focused on career training and health
care fields. We expect students who attend and complete programs at for-profit schools to support the same
repayment performance as students who attend and graduate from public and private not-for-profit four-year degree
granting institutions.
Our competitors1 in the Private Education Loan market include large banks such as Citizens Financial Group,
Inc. and PNC Bank, as well as a number of smaller specialty finance companies such as Sofi Technologies, Inc. and
College Ave, and members of the Education Finance Council. We compete based on our products, originations
capability, price, and customer service.
Enrollment
We expect enrollment to remain relatively flat over the next several years.
Enrollment at Four-Year Degree Granting Institutions2
(in millions)
•
According to the U.S. Department of Education’s projections, the enrollment in four-year degree granting
institutions is projected to remain relatively flat from 2022 to 2031.2
______________________
1Source: Enterval LLC 2023 Q3 Private Student Loan Report, November 2023. www.enterval.com
2Source: U.S. Department of Education, National Center for Education Statistics, Enrollment in Degree-Granting Institutions Projection Model,
through 2031. These are the most recent sources available to us for this information.
8 SLM CORPORATION — 2023 Form 10-K
Academic Years ("AY")13.813.914.014.114.0PublicPrivate17/1818/1919/2020/2121/220.04.08.012.016.0
Tuition Rates
•
Average published tuition and fees (exclusive of room and board) at four-year public and private not-for-
profit institutions increased at compound annual growth rates of 1.9 percent and 3.0 percent, respectively,
from AYs 2019-2020 through 2023-2024. Average published tuition and fees at public and private four-year
not-for-profit institutions grew 2.2 percent and 4.9 percent, respectively, between AYs 2021-2022 and
2022-2023 and 2.5 percent and 4.0 percent, respectively, between AYs 2022-2023 and 2023-2024.3
Published Tuition and Fees3
(Dollars in actuals)
3 Source: The College Board-Trends in College Pricing 2023. © 2023 The College
Board. www.collegeboard.org. The College Board restates its data annually, which
may cause previously reported results to vary.
2023 Form 10-K — SLM CORPORATION 9
AYsPublicPrivate19/2020/2121/2222/2323/24$—$25,000$50,000
Sources of Funding
Private Education Loan originations were an estimated $11 billion in AY 2022-2023, and increase of
$1 billion from AY 2021 - 2022.4
_______
4 Source: The College Board-Trends in Student Aid 2023© 2022 The College Board. www.collegeboard.org. Enterval LLC.
www.enterval.com. Funding sources in current dollars and include federal and private student loan data. 2023 Private
Education Loan market trends and College Board-Trends in Student Aid 2023 © 2023 data, and Enterval report. Other
sources for the size of the Private Education Loan market exist and may cite the size of the market differently. The College
Board restates its data annually, which may cause previously reported results to vary. We rely on publicly available
sources for market estimates, because we believe it provides a more appropriate basis for comparison of the performance
of our business.
10 SLM CORPORATION — 2023 Form 10-K
• We estimate total spending on higher education was $485 billion in AY 2022-2023, up from $457 billion in
AY 2018-2019. Private Education Loan originations increased $2 million from the year-ago period to an
estimated $15 billion in AY 2022-2023, and represent just 3.1 percent of total spending on higher education.
Modest growth in total spending can lead to meaningful increases in Private Education Loans in the
absence of growth in other sources of funding.5
• Over the AYs 2018-2023 period, increases in total spending have been absorbed primarily through
increased family contributions. If household finances continue to improve, we would expect this trend to
continue.
_________________________
5 Source: Total post-secondary education spending is estimated by Sallie Mae determining the full-time equivalents for both graduates
and undergraduates and multiplying by the estimated total per person cost of attendance for each school type. In doing so, we utilize
information from the U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2030
(NCES 2023, October 2023), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing
and Student Aid 2023. © 2023 The College Board, www.collegeboard.org, and Company analysis. Other sources for these data points
also exist publicly and may vary from our computed estimates. NCES, IPEDS, and College Board restate their data annually, which may
cause previous reports to vary. We have also recalculated figures in our Company analysis to standardize all costs of attendance to
dollars not adjusted for inflation. This has a minimal impact on historically-stated numbers.
2023 Form 10-K — SLM CORPORATION 11
Supervision and Regulation
Overview
We are subject to extensive regulation, examination, and supervision by various federal, state, and local
authorities. The more significant aspects of the laws and regulations that apply to us and our subsidiaries are
described below. These descriptions are qualified in their entirety by reference to the full text of the applicable
statutes, legislation, regulations, and policies, as they may be amended, and as interpreted and applied, by federal,
state, and local agencies.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was
adopted to reform and strengthen regulation and supervision of the U.S. financial services industry. It contains
comprehensive provisions to govern the practices and oversight of financial institutions and other participants in the
financial markets. It mandates significant regulations, additional requirements, and oversight on almost every aspect
of the U.S. financial services industry, including increased capital and liquidity requirements, limits on leverage, and
enhanced supervisory authority. It requires the issuance of many regulations, which will take effect over several
years.
Additionally, states are taking an increased interest in directly regulating the conduct and practices of student
loan lenders and servicers. Some states have enacted legislation creating specialized offices within state
government to oversee the student loan origination and servicing industry operating within those states, as well as
to set minimum standards governing the practices of student loan lenders and servicers. This represents a
significant change from the past in which states generally did not issue laws and regulations tailored specifically to
the student loan origination and servicing industry.
Consumer Protection Laws and Regulations
Our origination, servicing, first-party collection, and deposit taking activities subject us to federal and state
consumer protection, privacy, and related laws and regulations. Some of the more significant laws and regulations
applicable to our business include:
•
•
•
•
•
•
•
•
•
•
•
various state and federal laws governing unfair, deceptive, or abusive acts or practices;
various state laws and regulations imposing specific, mandated standards and requirements on the conduct
and practices of student loan lenders and servicers;
the federal Truth-In-Lending Act and Regulation Z, which govern disclosures of credit terms to consumer
borrowers;
the Fair Credit Reporting Act and Regulation V, which govern the use and provision of information to
consumer reporting agencies;
the Equal Credit Opportunity Act and Regulation B, which prohibit creditor practices that discriminate on the
basis of race, religion, and other prohibited factors in extending credit;
the SCRA, which applies to all debts incurred prior to commencement of active military service (including
education loans) and limits the amount of interest, including fees, that may be charged;
the Truth in Savings Act and Regulation DD, which mandate certain disclosures related to consumer deposit
accounts;
the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by
the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which relate to the
availability of deposit funds to consumers;
the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial
records and prescribes procedures for complying with federal government requests for and subpoenas of
financial records;
the Electronic Funds Transfer Act and Regulation E, which govern automated transfers of funds and
consumers’ rights related thereto;
the Telephone Consumer Protection Act, which governs communication methods that may be used to
contact customers;
12 SLM CORPORATION — 2023 Form 10-K
•
•
the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic
information about consumers to non-affiliated third parties; and
the California Consumer Privacy Act and California Privacy Rights Act, which govern transparency and
disclosure obligations regarding personal information of residents of the State of California.
Consumer Financial Protection Bureau
The CFPB has broad authority to promulgate regulations under federal consumer financial protection laws and
to directly or indirectly enforce those laws, including providing regulatory oversight of the private education loan
industry, and to examine financial institutions for compliance. It is authorized to collect fines and order consumer
restitution in the event of violations, engage in consumer financial education, track consumer complaints, request
data, and promote the availability of financial services to underserved consumers and communities. It has authority
to prevent unfair, deceptive, or abusive acts and practices by issuing regulations or by using its enforcement
authority without first issuing regulations. The CFPB has been active in its supervision, examination, and
enforcement of financial services companies, notably bringing enforcement actions, imposing fines, and mandating
large refunds to customers of several large banking institutions. The CFPB is the Bank’s primary consumer
compliance supervisor with compliance examination authority and primary consumer protection enforcement
authority. The UDFI and FDIC remain the prudential regulatory authorities with respect to the Bank’s financial
strength.
The Private Education Loan Ombudsman within the CFPB is authorized to receive and attempt to informally
resolve inquiries about private education loans. The Private Education Loan Ombudsman is required by law to
report to Congress annually on the trends and issues identified through this process. The CFPB continues to take
an active interest in the student loan industry, undertaking a number of initiatives related to the private education
loan market and student loan servicing. In early February 2020, the CFPB entered into a Memorandum of
Understanding with the U.S. Department of Education (the “CFPB/DOE MOU”) in order to better serve student loan
borrowers. Under the agreement, the agencies share complaint information from borrowers and meet quarterly to
discuss, among other things, the nature of complaints received and available information about the resolution of
complaints.
Regulation of Sallie Mae Bank
The Bank was chartered in 2005 and is a Utah industrial bank regulated by the FDIC, the UDFI, and the
CFPB. We are not a bank holding company under the Bank Holding Company Act and therefore are not subject to
the federal regulations applicable to bank holding companies. However, we and our non-bank subsidiaries are
subject to regulation and oversight as institution-affiliated parties. The following discussion sets forth some of the
elements of the bank regulatory framework applicable to us, the Bank, and our other non-bank subsidiaries.
General
The Bank is currently subject to prudential regulation and examination by the FDIC and the UDFI, and
consumer compliance regulation and examination by the CFPB. Numerous other federal and state laws and
regulations govern almost all aspects of the operations of the Bank and, to some degree, our operations and those
of our non-bank subsidiaries as institution-affiliated parties.
Actions by Federal and State Regulators
Under federal and state laws and regulations pertaining to the safety and soundness of insured depository
institutions, the UDFI and the FDIC have the authority to compel or restrict certain actions of the Bank if it is
determined to lack sufficient capital or other resources, or is otherwise operating in a manner deemed to be
inconsistent with safe and sound banking practices. Under this authority, the Bank’s regulators can require it to enter
into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written
agreements, and consent or cease and desist orders, pursuant to which the Bank would be required to take
identified corrective actions to address cited concerns and refrain from taking certain actions.
2023 Form 10-K — SLM CORPORATION 13
Enforcement Powers of Regulators
As “institution-affiliated parties” of the Bank, we, our non-bank subsidiaries, and our management, employees,
agents, independent contractors, and consultants are subject to potential civil and criminal penalties for violations of
law, regulations, or written orders of a government agency. Violations can include failure to timely file required
reports, filing false or misleading information, or submitting inaccurate reports. Civil penalties may be as high as
$1,000,000 per day for such violations, and criminal penalties for some financial institution crimes may include
imprisonment for 20 years. Regulators have flexibility to commence enforcement actions against institutions and
institution-affiliated parties, and the FDIC has the authority to terminate deposit insurance. When issued by a
banking agency, cease and desist and similar orders may, among other things, require affirmative action to correct
any harm resulting from a violation or practice, including by compelling restitution, reimbursement, indemnifications,
or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain
assets, rescind agreements or contracts, or take other actions determined to be appropriate by the ordering agency.
The federal banking regulators also may remove a director or officer from an insured depository institution (or bar
them from the industry) if a violation is willful or reckless.
In May 2014, the Bank received a Civil Investigative Demand (“CID”) from the CFPB as part of the CFPB’s
separate investigation relating to customer complaints, fees, and charges assessed in connection with the servicing
of student loans and related collection practices of pre-Spin-Off SLM by entities now subsidiaries of Navient during
a time period prior to the Spin-Off (the “CFPB Investigation”). To the extent requested, the Bank has been
cooperating fully with the CFPB. Given the timeframe covered by the CID and the CFPB Investigation, and the
focus on practices and procedures previously conducted by Navient and its servicing subsidiaries prior to the Spin-
Off, Navient is leading the response to these investigations. Consequently, we have no basis from which to estimate
either the duration or ultimate outcome of this investigation.
We note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against
Navient, along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc. The complaint alleges
these Navient entities, among other things, engaged in deceptive practices with respect to their historic servicing
and debt collection practices. Neither SLM, the Bank, nor any of their current subsidiaries are named in, or
otherwise a party to, the lawsuit and are not alleged to have engaged in any wrongdoing. The CFPB’s complaint
asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement.
Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of
the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or
expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except
for certain liabilities related to the conduct of the pre-Spin-Off consumer banking business that were specifically
assumed by the Bank (and as to which the Bank is obligated to indemnify Navient). Navient has acknowledged its
indemnification obligations under the Separation and Distribution Agreement, in connection with the previously
disclosed investigation matters and the now resolved multistate litigation. Navient has informed the Bank, however,
that it believes the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the
above-described lawsuits under the Separation and Distribution Agreement and/or a separate loan servicing
agreement between the parties, and has suggested that the parties defer further discussion regarding
indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits. The Bank
disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly
indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue.
Standards for Safety and Soundness
The Federal Deposit Insurance Act requires the federal banking regulatory agencies such as the FDIC to
prescribe, by regulation or guidance, operational and managerial standards for all insured depository institutions,
such as the Bank, relating to internal controls, information systems and audit systems, loan documentation, credit
underwriting, interest rate risk exposure, and asset quality. The agencies also must prescribe standards for earnings
and stock valuation, as well as standards for compensation, fees, and benefits. The federal banking regulators have
implemented these required standards through regulations and interagency guidance designed to identify and
address problems at insured depository institutions before capital becomes impaired. Under the regulations, if a
regulator determines a bank fails to meet any prescribed standards, the regulator may require the bank to submit an
acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and
soundness compliance plans.
14 SLM CORPORATION — 2023 Form 10-K
Dividends and Share Repurchase Programs
The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally,
under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its
net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would
not be impaired. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any
declared dividends and other payments and consummate share repurchases, as described herein.
The Company pays quarterly cash dividends on its outstanding Floating-Rate Non-Cumulative Preferred
Stock, Series B (the “Series B Preferred Stock”) when, as, and if declared by its Board of Directors, in the Board’s
discretion. In January 2019, the Company initiated a new policy to pay a regular, quarterly cash dividend on its
common stock as well, beginning in the first quarter of 2019, and its Board of Directors approved a common stock
share repurchase program.
Common stock dividend declarations are subject to determination by, and the discretion of, the Company’s
Board of Directors. The Company may change its common stock dividend policy at any time.
The January 23, 2019 share repurchase program (the “2019 Share Repurchase Program”), which was
effective upon announcement and expired on January 22, 2021, permitted the Company to repurchase from time to
time shares of its common stock up to an aggregate repurchase price not to exceed $200 million. We utilized all
capacity under the 2019 Share Repurchase Program, having repurchased 17 million shares of common stock for
$167 million for the year ended December 31, 2019 and 3 million shares of common stock for $33 million in the year
ended December 31, 2020.
The January 22, 2020 share repurchase program (the “2020 Share Repurchase Program”), which was
effective upon announcement and expired on January 21, 2022, permitted the Company to repurchase shares of its
common stock from time to time up to an aggregate repurchase price not to exceed $600 million.
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an
accelerated share repurchase agreement (“ASR”) with a third-party financial institution under which we paid
$525 million for an upfront delivery of our common stock and a forward agreement. On March 11, 2020, the third-
party financial institution delivered to us approximately 45 million shares. The final total actual number of shares of
common stock delivered to us pursuant to the forward agreement was based upon the Rule 10b-18 volume-
weighted average price at which the shares of our common stock traded during the regular trading sessions on the
NASDAQ Global Select Market during the term of the ASR. The transactions were accounted for as equity
transactions and were included in treasury stock when the shares were received, at which time there was an
immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share.
On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an
additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share
of $9.01. For additional information, see Notes to Consolidated Financial Statements, Note 14, “Stockholders’
Equity.”
Under the 2020 Share Repurchase Program, we repurchased an additional 4 million shares of common stock
for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share
Repurchase Program.
On January 27, 2021, the Company announced another share repurchase program (the “2021 Share
Repurchase Program”), which was effective upon announcement and expired on January 26, 2023, and originally
permitted the Company to repurchase shares of its common stock from time to time up to an aggregate repurchase
price not to exceed $1.25 billion.
On February 2, 2021, under the auspices of the 2021 Share Repurchase Program, we announced the
commencement of a “modified Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $1 billion in
aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share. Pursuant to the
Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on
March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the
Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer.
2023 Form 10-K — SLM CORPORATION 15
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that
could be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in
addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share
Repurchase Program authorization of $1.5 billion. Of the total $1.5 billion 2021 Share Repurchase Program
authorization, we repurchased 81.1 million shares of common stock at an average price per share of $18.07, for
$1.46 billion in the year ended December 31, 2021. (Those amounts include the shares repurchased under the
Tender Offer described above.) We also repurchased 2.0 million shares of common stock under the 2021 Share
Repurchase Program for $38 million in the three months ended March 31, 2022. We have utilized all capacity under
the 2021 Share Repurchase Program.
On January 26, 2022, we announced another share repurchase program (the “2022 Share Repurchase
Program”), which was effective upon announcement and expired on January 25, 2024, and permitted us to
repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed
$1.25 billion. Under the 2022 Share Repurchase Program, we repurchased 38.2 million shares of common stock at
an average price per share of $17.52, for $669 million in the year ended December 31, 2022 and repurchased
22.3 million shares of common stock at an average price per share of $15.64, for $349 million in the year ended
December 31, 2023. There was $236 million of capacity remaining under the 2022 Share Repurchase Program at
December 31, 2023. Any capacity remaining unused under the 2022 Share Repurchase Program on January 25,
2024 expired on that date pursuant to the terms of the 2022 Share Repurchase Program.
On January 24, 2024, we announced a new share repurchase program (the “2024 Share Repurchase
Program”), which became effective on January 26, 2024 and expires on February 6, 2026, and permits us to
repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed
$650 million.
Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety
of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans,
negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions.
The timing and volume of any repurchases will be subject to market conditions, and there can be no guarantee that
the Company will repurchase up to the limit of the 2024 Share Repurchase Program or at all.
We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to
pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common
share repurchases by the Company under the share repurchase programs. The Bank declared $550 million, $700
million, and $1.4 billion in dividends for the years ended December 31, 2023, 2022, and 2021, respectively, with the
proceeds primarily used to fund share repurchase programs and stock dividends.
Regulatory Capital Requirements
The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI. Failure
to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions
by regulators that, if undertaken, could have a material adverse effect on our business, results of operations, and
financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and
the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve
quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory
accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action
framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings,
and other factors.
The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-
based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of
8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1
capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the
Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to
executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel
III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a
Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5
percent.
16 SLM CORPORATION — 2023 Form 10-K
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions,
the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based
capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage
ratio of at least 5.0 percent.
In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel
III 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. The proposed
rule therefore would not affect the Bank’s capital requirements or the calculation of its capital ratios.
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted
the current expected credit losses accounting standard (“CECL”) during the 2020 calendar year, including the Bank,
could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital
of CECL relative to the incurred loss methodology. The Bank elected to use this option. Therefore, the regulatory
capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25
percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average
total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition
amounts”), were deferred for the two-year period ending January 1, 2022. On January 1, 2022, 25 percent of the
adjusted transition amounts was phased in for regulatory capital purposes. On January 1, 2023, an additional 25
percent of the adjusted transition amounts was phased in for regulatory capital purposes. On January 1 of 2024 and
2025, the adjusted transition amounts will continue to be phased in for regulatory capital purposes at a rate of 25
percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. The
Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion,
increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and
increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained
earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our
CECL allowance as necessary, to address any limitations in the models used.
At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for
regulatory capital purposes are as follows:
Adjusted
Transition
Amounts
Phase-In
Amounts for
the Year Ended
Phase-In
Amounts for the
Year Ended
Remaining
Adjusted
Transition
Amounts to be
Phased-In
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2023
$
836,351 $
(209,088) $
(209,088) $
(Dollars in thousands)
Retained earnings
Allowance for credit losses
1,038,145
(259,536)
(259,536)
Liability for unfunded commitments
Deferred tax asset
104,377
306,171
(26,094)
(76,542)
(26,094)
(76,542)
418,175
519,073
52,189
153,087
Stress Testing Requirements
The Bank is not currently subject to stress testing requirements under the Dodd-Frank Act. However, under
regulatory guidance, the Bank still conducts annual capital stress tests, the results of which it presents to its
prudential regulators - the FDIC and the UDFI - for their review. The Bank also conducts quarterly liquidity stress
tests to evaluate the adequacy of its liquidity sources under various stress scenarios and provides the results to its
Board of Directors. These results are submitted to the Bank’s prudential regulators at their request.
Deposit Insurance and Assessments
Deposits at the Bank are insured up to the applicable legal limits by the FDIC-administered Deposit Insurance
Fund (the “DIF”), which is funded primarily by quarterly assessments on insured banks. An insured bank’s
2023 Form 10-K — SLM CORPORATION 17
assessment is calculated by multiplying its assessment rate by its assessment base. A bank’s assessment base and
assessment rate are determined each quarter.
The Bank’s insurance assessment base currently is its average consolidated total assets minus its average
tangible equity during the assessment period. The Bank’s assessment rate is determined by the FDIC using a
number of factors, including the results of supervisory evaluations, the Bank’s capital ratios and its financial
condition, as well as the risk posed by the Bank to the DIF. Assessment rates for insured banks also are subject to
adjustment depending on a number of factors, including significant holdings of brokered deposits in certain
instances and the issuance or holding of certain types of debt.
Deposits
With respect to brokered deposits, an insured depository institution must be well capitalized under the prompt
corrective action framework in order to accept, renew, or roll over such deposits without FDIC clearance. An
adequately capitalized insured depository institution must obtain a waiver from the FDIC to accept, renew, or roll
over brokered deposits. Undercapitalized insured depository institutions generally may not accept, renew, or roll
over brokered deposits. For more information on the Bank’s deposits, see Part II, Item 7. “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Key Financial Measures — Funding Sources.”
Regulatory Examinations
The Bank currently undergoes regular on-site examinations by the Bank’s regulators, who examine for
adherence to a range of legal and regulatory compliance responsibilities. A regulator conducting an examination has
unfettered access to the books and records of the examined institution. The results of the examination are
confidential. The cost of examinations may be assessed against the examined institution as the agency deems
necessary or appropriate.
Source of Strength
Under the Dodd-Frank Act, we are required to serve as a source of financial strength to the Bank and to
commit resources to support the Bank in circumstances when we might not do so absent the statutory requirement.
Any loan by us to the Bank would be subordinate in right of payment to depositors and to certain other indebtedness
of the Bank.
Community Reinvestment Act
The Community Reinvestment Act (the “CRA”) requires the FDIC to evaluate the record of the Bank in meeting
the credit needs of its local community, including low- and moderate-income neighborhoods, consistent with the
safe and sound operation of the institution. These evaluations are considered in evaluating mergers, acquisitions,
and applications to open a branch or facility. Failure to adequately meet these criteria could result in additional
requirements and limitations on the Bank. The Bank has received a CRA rating of Outstanding.
Privacy Laws
The federal banking regulators, as required by the Gramm-Leach-Bliley Act (“GLBA”), have adopted
regulations that limit the ability of banks and other financial institutions to disclose nonpublic information about
consumers to nonaffiliated third parties. Financial institutions are required to disclose to consumers their policies for
collecting and protecting confidential customer information. Customers generally may prevent financial institutions
from sharing nonpublic personal information with nonaffiliated third parties, with some exceptions. Financial
institutions generally may not disclose certain consumer or account information to any nonaffiliated third party for
use in telemarketing, direct mail marketing, or other marketing. The privacy regulations also restrict information
sharing among affiliates for marketing purposes and govern the use and provision of information to consumer
reporting agencies. Federal and state banking agencies have prescribed standards for maintaining the security and
confidentiality of consumer information, and the Bank is subject to such standards, as well as certain federal and
state laws or standards for notifying consumers in the event of a security breach. In addition, we must comply with
increasingly complex and rigorous data privacy and data security laws and regulatory standards enacted to protect
business and personal data. These laws impose additional obligations on companies regarding the handling of
personal data and provide certain individual privacy rights to persons whose data is stored and shared. Any failure
to comply with these laws and regulatory standards could subject us to legal and reputational risk. For example,
18 SLM CORPORATION — 2023 Form 10-K
California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020,
and the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA and brought additional
compliance obligations with respect to certain processing of personal information of California residents once it
came into effect in most material respects on January 1, 2023. The CCPA and CCRA apply to for-profit businesses
that conduct business in California and meet certain revenue or data collection thresholds. The CCPA and CCRA
contain several exemptions, including an exemption applicable to information that is collected, processed, sold, or
disclosed pursuant to the GLBA. However, the definition of personal information is expanded under the California
statutes to apply to certain data beyond the scope of the GLBA exemption. Additionally, numerous other states have
enacted or are in the process of enacting state-level data privacy and security laws and regulations relating to the
collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information.
Misuse of or failure to secure certain personal information could result in violation of data privacy laws and
regulations, proceedings against the Company by governmental entities or others, damage to our reputation and
credibility, and could negatively affect our business, financial condition, and results of operations. If other states in
the U.S. adopt similar laws or if a comprehensive federal data privacy law is enacted, we may expend considerable
additional resources to meet these requirements and the overall risk to the Company could incrementally increase
depending upon the reach and application of any such laws.
State Regulation of Student Loan Lenders and Servicers
In certain states, laws regulating the conduct of student loan lenders and servicers may apply to and impact
the origination and servicing practices of the Bank. While these state laws vary in content, they generally include
components relating to licensure and oversight by state authorities and the creation of specialized student loan
ombudsman offices to oversee the student loan industry operating within these states. These laws may also include
requirements pertaining to payment processing, customer communications, the handling of customer inquiries and
complaints, information concerning loan repayment options, access to borrower account records, the processing of
disability applications and borrower requests to remove cosigners from loans, and debt collection, among other
requirements. Notably, these laws often include provisions for enforcement of alleged violations by state regulators
as well as private litigation by aggrieved consumers.
Other Sources of Regulation
Many other aspects of our businesses are subject to federal and state regulation and administrative oversight.
Some of the most significant of these are described below.
Oversight of Derivatives
Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be
submitted for clearing to central intermediaries to reduce counterparty risk. Two of the central intermediaries we use
are the Chicago Mercantile Exchange (the “CME”) and the London Clearing House (the “LCH”). All variation margin
payments on derivatives cleared through the CME and LCH are required to be 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. Our
exposure 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.
Credit Risk Retention
The Dodd-Frank risk retention rules generally require sponsors of ABS, such as Sallie Mae, to retain an
economic interest in an ABS transaction that represents at least five percent of the credit risk of the assets being
securitized. We early adopted the Dodd-Frank risk retention rules beginning with our 2016-A securitization
transaction completed in May 2016. For our 2016-A transaction and subsequent securitizations that are treated as
on-balance sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period of time) an
“eligible horizontal residual interest” comprised of residual certificates representing at least five percent of the fair
value of all ABS interests issued in the securitization transaction, determined as of the date of transfer. With any
securitizations that are treated as off-balance sheet, including any loan sale transactions structured as
securitizations, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible
vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction;
2023 Form 10-K — SLM CORPORATION 19
for future off-balance securitizations, we may also comply with the Dodd-Frank risk retention rules by retaining (for a
requisite period) a single interest entitling the holder to five percent of any amounts payable by the trustee in respect
of each interest issued by the issuing trust.
Anti-Money Laundering, the USA PATRIOT Act, and U.S. Economic Sanctions
The USA PATRIOT Act of 2001 (the “USA Patriot Act”), which amended the Bank Secrecy Act, substantially
broadened the scope of United States anti-money laundering laws and regulations by imposing significant new
compliance and due diligence obligations, creating new crimes and penalties, and expanding the extra-territorial
jurisdiction of the United States. The U.S. Treasury Department has issued and, in some cases, proposed a number
of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank.
These regulations impose obligations on financial institutions to maintain appropriate internal policies, procedures,
and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity of their
customers. In addition, U.S. law generally prohibits or substantially restricts U.S. persons from doing business with
countries designated by the U.S. Department of State as state sponsors of terrorism. Under U.S. law, there are
similar prohibitions or restrictions with countries subject to other U.S. economic sanctions administered by the U.S.
Department of the Treasury’s Office of Foreign Assets Control or other agencies. We maintain policies and
procedures designed to ensure compliance with relevant U.S. laws and regulations applicable to U.S. persons.
Volcker Rule
In December 2013, the U.S. banking agencies, the SEC, and the U.S. Commodity Futures Trading
Commission issued final rules to implement the “Volcker Rule” provisions of the Dodd-Frank Act. The rules prohibit
insured depository institutions and their affiliates from engaging in proprietary trading and from investing in,
sponsoring, or having certain financial relationships with, certain private funds. These prohibitions are subject to a
number of important exclusions and exemptions that, for example, permit insured depository institutions and their
affiliates to trade for risk-mitigating hedging and liquidity management, subject to certain conditions and restrictions.
The Volcker Rule does not have a meaningful effect on our current operations or those of our subsidiaries, as we do
not materially engage in the businesses prohibited by the Volcker Rule.
Human Capital Resources and Talent Development
We believe in a just and inclusive, values-based, mission-led culture that inspires commitment and drives
performance. Our human capital strategy is focused on the attraction, development, empowerment, recognition, and
rewarding of team members as they bring our mission to life.
As of December 31, 2023, we had approximately 1,740 team members, all located in the United States. We
believe an engaged workforce leads to a more innovative, productive, and profitable company. For this reason, we
measure employee engagement through culture surveys. These culture surveys provide insights we use to create
an environment in which team members thrive and bring their full selves to work.
We strive to create a diverse culture of inclusion — an environment that encourages and reinforces mutual
trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces diverse backgrounds and
perspectives to power and fuel our mission. We believe that a diverse and inclusive workforce can lead to a more
effective company.
We are focused on providing a total compensation package that enables us to attract, motivate, and retain the
best possible talent to help drive our business forward. We believe in paying competitive market wages, and our
benefits package includes Company contributions to the 401(k), educational assistance to our team members and
their dependents, flexible work arrangements, and other comprehensive health and welfare programs.
We have made significant investments in learning and talent development, and provide team members with
the tools and resources necessary to support their success and drive performance of the Company.
Our team members are involved in the communities in which they live and work through the Sallie Mae
Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program. In 2023, our team members
donated approximately 3,700 hours through our community engagement programs. We also provide matching gifts
for team members to support their interests and needs and those of their communities.
20 SLM CORPORATION — 2023 Form 10-K
Item 1A. Risk Factors
SUMMARY OF RISK FACTORS
Below is a summary of the principal factors that make an investment in our securities risky. This summary
does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor
summary, and other risks that we face, can be found below and should be carefully considered, together with other
information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding
our stock.
• Our product offerings are primarily concentrated in loan products for higher education and deposit products
for online depositors. Such concentrations and the competitive environment for those products subject us to
risks that could adversely affect our financial position.
•
•
•
Consumer access to alternative means of financing the costs of education and other factors may reduce
demand for, or adversely affect our ability to retain, Private Education Loans, which could have a material
adverse effect on us.
Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on
our business, financial condition, results of operations, and/or cash flows.
Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial
condition, results of operations, and/or cash flows.
• Our allowance for credit losses may not be adequate to cover actual losses, and we may be required to
materially increase our allowance, which may adversely affect our capital, financial condition, and/or results
of operations.
• We are subject to the creditworthiness of third parties other than borrowers and exposure to those third
parties could adversely affect our business, financial condition, results of operations, and/or cash flows.
•
•
The levels of or changes in interest rates could adversely affect our results of operations, financial condition,
regulatory capital, and/or liquidity.
The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and
maturity characteristics of our funding arrangements. We are also subject to repayment and prepayment
risks. These can increase uncertainty and adversely affect our business, financial condition, results of
operations, and/or cash flows.
• Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could
have a material adverse effect on our earnings.
•
The discontinuance of LIBOR could adversely affect our business and financial results.
• Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain
funding through asset-backed securitizations, and sell loans at attractive prices to help fund any share
repurchase programs that may be authorized from time to time. An inability to effectively manage our
liquidity could have a material adverse effect on us.
•
•
•
In structuring and facilitating securitizations or sales of Private Education Loans, administering securitization
trusts, or servicing loans we have securitized or sold, we may incur liabilities to transaction parties. If those
liabilities are significant, they could adversely affect our business and financial condition.
Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could
adversely affect our financial condition and results of operations.
The Bank is subject to various regulatory capital requirements, and failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that,
if undertaken, could have a material adverse effect on us.
2023 Form 10-K — SLM CORPORATION 21
•
•
Unfavorable results from the periodic stress scenarios we model under regulatory guidance may adversely
affect our business and result in regulatory action that could adversely affect us.
Changes in accounting standards, or incorrect estimates and assumptions by management in connection
with the preparation of our consolidated financial statements, could adversely affect us.
• We operate in a highly regulated environment and the laws and regulations that govern our operations, or
changes in these laws and regulations, or our failure to comply with them, may adversely affect us.
•
Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and
requirements could subject us to civil and criminal penalties or litigation, including class actions, and have a
material adverse effect on our business.
• Our framework for managing risks, including model risk and data governance risk, may not be effective in
mitigating our risk of loss and, if the framework is ineffective, could have a material adverse effect on us.
•
Proposals of federal and state governments, or of various political candidates, affecting the student loan
industry in particular subject us to political risk and could have a material adverse impact on us.
• We are subject to reputational risk, including risk arising from environmental, social, and governance
matters or other areas or events, which could damage our brand and have a material adverse impact on us.
•
Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to
changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or
damage our reputation.
• We could lose market share if we are not able to keep pace with rapid changes in technology.
• We depend on secure information technology and a breach of those systems or those of third-party vendors
could materially adversely affect us and lead to significant financial, legal, and reputational exposure.
• We depend significantly on third parties for a wide array of our operations and customer services and key
components of our information technology infrastructure, and a breach of security or service levels, or
violation of law by one of these third parties, could disrupt our business.
• We may face risks from our operations related to litigation or regulatory or supervisory actions that could
result in significant legal expenses and settlement or damage awards.
• Our internal controls over financial reporting and disclosure controls, as well as other internal controls, may
be ineffective, which could have a material adverse effect on our financial condition and/or results of
operations.
• Our business operations and those of our third-party vendors may be adversely impacted by unpredictable
catastrophic events.
•
•
•
New lines of business and our ability to successfully make acquisitions are subject to significant risks.
Because of Navient’s indemnification obligations, we have significant exposures to risks related to its
creditworthiness.
The holders of our preferred stock have rights that are senior to those of our common shareholders.
• We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our
common stock, and make payments on our corporate debt.
• Our business could be negatively affected if we are unable to attract, retain, and motivate skilled
employees.
22 SLM CORPORATION — 2023 Form 10-K
RISK FACTORS
We face many risks and uncertainties, any one or more of which could have a material adverse effect on our
business, financial condition (including capital and liquidity), results of operations, cash flows, and/or stock price.
We describe certain of these risk and uncertainties in this section, although we may be adversely affected by other
risks or uncertainties that (i) are presently not known to us, (ii) we have failed to identify or appreciate, or (iii) we
currently consider immaterial. These Risk Factors, together with other information in this Form 10-K and our other
filings with the SEC, should be carefully considered before making an investment decision regarding our stock.
CONCENTRATION RISK
Our product offerings are primarily concentrated in loan products for higher education and deposit
products for online depositors. Such concentrations and the competitive environment for those products
subject us to risks that could adversely affect our financial position.
At December 31, 2023, approximately 72 percent of our total assets, and 84 percent of our total assets
excluding cash and cash equivalents, were comprised of Private Education Loans. This concentration poses the risk
that any disruption, dislocation, significant adverse legislative or regulatory change, or other negative event or trend
in the Private Education Loan market, the overall education loan market, or the overall economic environment,
including an inflationary and rising or high interest rate environment or a recession in the U.S., could
disproportionately and adversely affect our business, financial condition, and results of operations. We face
competition in the Private Education Loan market from a variety of players. We compete with banks and other
consumer lending institutions, many of whom have strong consumer brand name recognition, greater financial
resources, and greater diversification in their mix of assets, which can enable them to be more competitive in their
products and offerings, particularly in uncertain or challenging economic times. We also compete with financial
technology (“FinTech”) companies, many of whom have lower return hurdles than more traditional consumer lending
institutions. The use of marketplace lending sites is growing in popularity in the student loan sector. This market
channel may erode our more traditional lending channels and increase our cost to originate Private Education
Loans. Moreover, we expect that our competition will increase as various lending institutions and other competitors,
including Navient, through its Earnest subsidiary, enter or re-enter the Private Education Loan market. We compete
based on our brand products, origination capability, and customer service. To the extent our competitors compete
more aggressively or effectively, we could lose market share to them and/or our existing loans could be subject to
consolidation or refinancing risk.
In addition to competition from private industry players, the federal government, through the Federal Direct
Student Loan Program (the “DSLP”), poses significant competition to our Private Education Loan products. The
availability and terms of loans the government originates or guarantees affect the demand for Private Education
Loans because students and their families often rely on Private Education Loans to bridge the gap between
available funds, including family savings, scholarships, grants, and federal and state loans, and the costs of post-
secondary education. The federal government currently places both annual and aggregate limits on the amount of
federal loans any student can receive and determines the criteria for student eligibility. Parents and graduate
students may obtain additional federal education loans through other programs, such as the Parent Plus and
Graduate Plus programs, without any aggregate limits other than the difference between the cost of education and
the amount of other financial aid received by a student. These federal education lending programs are generally
adjusted in connection with funding authorizations from the U.S. Congress for programs under the Higher Education
Act of 1965 (the “HEA”). The HEA’s reauthorization is currently pending in the U.S. Congress. Reauthorization, as
well as measures to provide relief for borrowers of student loans in general, could provide a legislative vehicle for
changes to student loan programs. Possible components that could impact the Private Education Loan market and
our business include changes to federal education loan limits and/or payment requirements, private loan refinancing
programs, or Private Education Loan forgiveness. Other components of any legislation also could have a negative
impact on our business and financial condition. See “— POLITICAL/REPUTATIONAL RISK.”
We also face substantial competition for our online deposit products. We expect to compete based primarily
on a combination of reputation, rate, and availability of information about our deposit products. Our competitors,
many of whom have greater financial resources or lower costs than we do, may be more effective in attracting new
deposits and retaining existing deposits such as by offering more competitive rates, dedicating more resources for
advertising, or engaging in more effective forms of marketing. For instance, our new depositor acquisition marketing
is partly dependent on search engines, as well as bank deposit information aggregators, to direct a significant
amount of traffic to our website via organic ranking and paid search advertising. Our bank competitors’ paid search
activities, such as pay per click marketing, may result in their sites receiving higher search results than ours, thus
2023 Form 10-K — SLM CORPORATION 23
leading to significant increases in the cost of such depositor acquisition for us. In addition, changes to search
engines and deposit information aggregators’ methodologies and business practices could result in a decline in our
new deposit growth or existing customer retention. Increased competition for deposits could cause our cost of funds
to increase, which could negatively impact our loan pricing and net interest margin. See also “- LIQUIDITY RISK.”
Consumer access to alternative means of financing the costs of education and other factors may reduce
demand for, or adversely affect our ability to retain, Private Education Loans, which could have a material
adverse effect on our business, financial condition, results of operations, and/or cash flows.
The demand for Private Education Loans could weaken if families and student borrowers use other vehicles to
bridge the gap between available funds and costs of post-secondary education. These vehicles include, among
others:
•
•
•
•
Home equity loans or other borrowings available to families to finance their education costs;
Pre-paid tuition plans, which allow students to pay tuition at today’s rates to cover tuition costs in the future;
Section 529 plans, which include both pre-paid tuition plans and college savings plans that allow a family to
save funds on a tax-advantaged basis;
Education IRAs, now known as Coverdell Education Savings Accounts, under which a holder can make
annual contributions for education savings;
• Government education loan programs such as the DSLP; and
•
Direct loans from colleges and universities, as well as income sharing agreements offered by schools and
facilitated by private companies.
In addition, our ability to grow Private Education Loan originations and retain assets at our planned levels
could be negatively affected if:
•
•
•
•
•
demographic trends in the United States result in a decrease in college-age individuals;
demand for higher education decreases (which can occur, among other times, during periods of strong
employment in the United States and/or when fewer employers require college degrees for their employees);
the cost of attendance of higher education decreases;
consumers increase their targeted savings for higher education;
prepayment rates on our Private Education Loans increase or accelerate due to greater market liquidity,
availability of alternative means of financing, improved household incomes, increasing consumer confidence,
and/or various other factors;
• macroeconomic factors (including, without limitation, high unemployment) cause loan applicants or borrowers
•
•
to be unable to meet our credit standards or repay credit obligations;
there is broader public resistance to increasing higher education costs; or
proposals for new federal and state education spending described below in “—POLITICAL/REPUTATIONAL
RISK” gain broader appeal or momentum.
Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on
our business, financial condition, results of operations, and/or cash flows.
We believe the design of our Private Education Loan products, with emphasis on rigorous underwriting, credit-
worthy cosigners and variable or fixed interest rates, creates sustainable, competitive loan products. However,
increasing amounts of private education consolidation loans at interest rates below those of our existing portfolio -
whether from private sources (including FinTech companies) or otherwise - can contribute to an increase in the
prepayment rates of our existing Private Education Loans and, if prolonged and continuous, could have a material
adverse effect on our business, financial condition, results of operations, and/or cash flows. Increases in
consolidation loans may result from competition as well as legislative or regulatory changes, as there has been, and
there may be continue to be, an increase in the number of lenders offering consolidation or refinancing products as
well as proposed legislation designed to promote federal financing for consolidation or refinancing of existing loans.
24 SLM CORPORATION — 2023 Form 10-K
CREDIT RISK
Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial
condition, results of operations, and/or cash flows.
We bear the full credit exposure on our Private Education Loans, which are unsecured loans. If those loans
were to default at rates much higher than anticipated or at speeds faster than anticipated, our business, financial
condition, results of operations, and/or cash flows could be adversely affected. Delinquencies are an important
indicator of the potential future credit performance of our loan portfolios. Many factors can have an impact on
borrower delinquencies, including, without limitation, economic conditions (including inflationary, rising or high
interest rate, and recessionary environments), changes in interest rates, personal circumstances and hardships, risk
characteristics such as school type, loan status, loan seasoning, underwriting criteria, presence of a cosigner,
changes made in credit administration practices from time to time, changes in loan underwriting criteria made from
time to time, legislative, regulatory and operational changes, servicing and collections staffing challenges, other
operational challenges we may encounter, the cessation by the federal government in 2023 of its payment
suspension program (initiated during the COVID-19 pandemic) for borrowers of federal student loans, the
invalidation or failure of the Biden Administration’s effort to forgive federal student loan indebtedness for certain
borrowers, and unforeseen events or trends.
Rising unemployment rates and the failure of our in-school borrowers to graduate are two of the most
significant macroeconomic factors that could increase loan delinquencies, defaults, and loan modifications, or
otherwise negatively affect performance of our existing education loan portfolios, as such factors may cause
borrowers and cosigners to experience trouble repaying credit obligations or meeting our credit standards. The
impact of these factors may be heightened in rising or high interest rate environments when interest rates rise
causing payments on variable-rate loans to increase. See Part II, Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of
Forbearance and Rate Modifications as a Private Education Loan Collection Tool” for a discussion of how items
such as changes in credit administration practices can impact the timing and level of delinquencies and defaults on
our loans. As part of our underwriting process, we rely heavily upon information supplied by applicants and third
parties. If any of this information is intentionally or negligently misrepresented, or is inaccurate, and is not detected
by us before completing the transaction, or changes after we collect the information, we may experience increased
credit risk. Higher credit-related losses and weaker credit quality negatively affect our business, financial condition,
and results of operations and limit funding options, which could also adversely impact our liquidity position. Our
Private Education Loan (held for investment) delinquencies (loans greater than 30 days past due), as a percentage
of Private Education Loans (held for investment) in repayment, were 3.90 percent at December 31, 2023.
Our allowance for credit losses may not be adequate to cover actual losses, and we may be required to
materially increase our allowance, which may adversely affect our capital, financial condition, and/or results
of operations.
We are required to measure our allowance for credit losses based on our estimate of all current expected
credit losses over the remaining contractual term of our assets. The CECL standard resulted in a significant change
in how we recognize credit losses and has had a material impact on our financial condition, results of operations,
and capital levels. The evaluation of our allowance for credit losses is inherently subjective, as it requires material
estimates that may be subject to significant changes. The measurement of expected credit losses is based on
historical information, current conditions, and reasonable and supportable forecasts to estimate the expected loss
over the life of the loan. (This differs significantly from the “incurred loss” model, which was in effect prior to our
adoption of CECL and delayed recognition until it was probable a loss had been incurred.) Our models take into
account historical loss experience in various economic conditions to estimate expected future losses based upon
future economic forecasts over a period of time (“reasonable and supportable period”), at which point we
immediately revert our forecasted economic factors to long-term historical loss conditions. Defaults can be higher
than anticipated due to a variety of factors, and our models may not accurately estimate future loan loss
performance. The models used in calculating our CECL estimates include forecasts of future economic conditions,
the weighting of economic forecasts, prepayment speeds, and recovery rates. If these forecasts prove to be
inaccurate, or our models were not designed properly, our allowance for credit losses may not be sufficient to cover
future losses, which could negatively impact our financial condition, results of operations, and capital levels. In
addition, the amount of losses recorded under CECL is very sensitive to the inputs described above. As such,
changes to these inputs could significantly change the amount of allowance necessary, which could have a negative
impact on our financial results and capital levels. Additionally, regulatory agencies may periodically review our
allowance for credit losses, including our methodology and models used in calculating the allowance, and could
2023 Form 10-K — SLM CORPORATION 25
insist on an increase in the allowance or recognition of additional charge-offs based on judgments different than
those used by our management. If these differences in judgment are significant, our allowance could increase
significantly and result in sizable decreases in our net income and capital. See Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and
Estimates — Allowance for Credit Losses” for further details regarding our allowance for credit losses.
We are subject to the creditworthiness of third parties other than borrowers and exposure to those third
parties could adversely affect our business, financial condition, results of operations, and/or cash flows.
We are also subject to the creditworthiness of third parties, including various lending, securitization,
investment, and derivative counterparties. Our overall counterparty exposure is more fully discussed in Part II, Item
7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital
Resources — Counterparty Exposure.” If our counterparties are unable to perform their obligations, or the ability of
our counterparties to perform their obligations becomes impaired or less certain, the obligations of our
counterparties to us or our investments in any counterparties or their securities could become impaired, which could
have a material adverse impact on our business, financial condition, results of operations, and/or cash flows.
INTEREST RATE RISK
The levels of or changes in interest rates could adversely affect our results of operations, financial
condition, regulatory capital, and/or liquidity.
We are highly dependent on net interest income, which is the difference between interest income on earning
assets (such as loans and investments) and interest expense on deposits and borrowings. Net interest income is
significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies of
governmental agencies, general economic conditions, conditions in the capital markets, the political and regulatory
environments, business and consumer sentiment, competitive pressures, and expectations about the future. We
may be adversely affected by policies or events that have the effect of flattening or inverting the yield curve (that is,
the difference between long-term and short-term interest rates), compressing interest rates on our earnings assets
closer to interest rates on our deposits and borrowings, increasing the volatility of market rates of interest, or
changing the spreads among different interest rate indices. Changes in interest rate levels also can lead to other
adverse impacts, such as reducing the demand for or increasing the prepayment speeds of our Private Education
Loans, increasing the delinquencies or defaults of our borrowers or other counterparties, reducing the value of our
assets, or increasing our liabilities. Many of these adverse impacts can occur in an inflationary and rising interest
rate environment. These adverse impacts may materially adversely affect our operations, our regulatory capital and
liquidity position, the credit performance of our Private Education Loans and other assets, the number of borrowers
seeking payment relief, our results of operations and financial condition, and/or our cash flows. The level of and
changes in market rates of interest and, as a result, these risks and uncertainties, are beyond our control.
The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and
maturity characteristics of our funding arrangements, which may negatively impact the level of our net
interest income. We are also subject to repayment and prepayment risks, which can increase uncertainty
as we manage our interest rate risk and can adversely affect our business, financial condition, results of
operations, and/or cash flows.
Net interest income is the primary source of cash flow generated by our loan portfolios. Interest earned on our
Private Education Loans and FFELP Loans is either fixed-rate or indexed to a short-term variable rate, and these
loans are originated with relatively long repayment periods. ABS funding closely mirrors the expected maturities of
our education loans and provides a combination of fixed and variable-rate funding. Deposits are issued with both
fixed and variable rates, and the average term is typically shorter than the expected term of our combined loan
portfolios.
The different interest rate and maturity characteristics of our loan portfolios and the liabilities funding those
portfolios result in fluctuations in our net interest income. In certain interest rate environments, this mismatch may
reduce our net interest margin (the interest yield earned on our portfolio less the rate paid on our interest-bearing
liabilities) and net interest income. While we actively monitor and manage mismatches in the interest rate and
maturity characteristics of our assets and liabilities, using derivative transactions where necessary to avoid
excessive levels of repricing and refunding risk, it is not possible to hedge all of our exposure to such risks. While
the assets, liabilities, and related hedging derivative contract re-pricing indices are typically highly correlated, there
26 SLM CORPORATION — 2023 Form 10-K
can be no assurance that the historically high correlation will not be disrupted by capital market dislocations or other
factors outside our control. In these circumstances, our earnings could be materially adversely affected.
We are also subject to risks associated with changes in repayment and prepayment rates on Private
Education Loans, which can increase uncertainty as we manage our interest rate risk. Consolidations and
refinancings contribute to increased prepayment rates. In addition, increases in employment levels, wages, family
income, alternative sources of financing, and government support for student loan borrowers or the forgiveness for
certain borrowers of federal student loan indebtedness, may also contribute to higher-than-expected prepayment
rates, which can adversely affect our interest rate and repricing risk and our financial condition and results of
operations.
Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could
have a material adverse effect on our earnings.
We maintain an overall interest rate strategy that uses derivatives to reduce the economic effect of interest
rate changes. Developing an effective hedging strategy for dealing with movements in interest rates is complex, and
no strategy can completely avoid the risks associated with these fluctuations. For example, our education loan
portfolios remain subject to prepayment risk that could cause them to be under- or over-hedged, which could result
in material losses. In addition, some of our interest rate risk management activities expose us to mark-to-market
losses if interest rates move in a materially different way than was expected when we entered into the related
derivative contracts.
Our use of derivatives also exposes us to market risk and credit risk. Market risk is the chance of financial loss
resulting from changes in interest rates and market liquidity. Some of the interest rate swaps we use to
economically hedge interest rate risk between our assets and liabilities do not qualify for hedge accounting
treatment. Therefore, the change in fair value, called the “mark-to-market,” of the swaps that do not qualify as
accounting hedges is included in our statement of income. A decline in the fair value of those derivatives could have
a material adverse effect on our reported earnings. Also, see “— We are subject to the creditworthiness of third
parties other than borrowers and exposure to those third parties could adversely affect our business, financial
condition, results of operations, and/or cash flows.”
The discontinuance of LIBOR could adversely affect our business and financial results.
Following announcements by the United Kingdom’s Financial Conduct Authority (the “UKFCA”), which
regulates LIBOR, the London interbank offered rate, 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 Alternative Reference Rates Committee (the “ARRC”), a group of market participants that includes both
banks and a number of non-banks, was convened by the Federal Reserve Board and the Federal Reserve Bank of
New York in 2014 to identify alternative reference rates to LIBOR. In 2017, the ARRC identified the Secured
Overnight Financing Rate (“SOFR”), which is a rate based on overnight U.S. Treasury repurchase agreement
transactions, as its recommended alternative to USD LIBOR.
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 2022, we began issuing ABS that are
indexed to SOFR and renewed our education loan-backed multi-lender secured borrowing facility (the “Secured
Borrowing Facility”) with an index based on SOFR. In 2023, we transitioned to SOFR (plus the applicable spread
adjustment) the remainder of our assets, liabilities, and off-balance sheet items referencing LIBOR on their
respective first repricing dates after June 30, 2023. In some instances, we relied on safe harbors provided by
federal legislation to transition obligations from LIBOR to SOFR because the obligations did not have fallback
provisions for alternative reference rates. Although we relied on those safe harbors in certain instances, the safe
harbors are untested. We could still be exposed to risks associated with disputes and litigation with customers,
counterparties, and other market participants in connection with implementing replacement rates for LIBOR. Also,
the replacement of LIBOR could adversely affect the value of and return on certain of our financial assets, the value
of certain of our liabilities, and could result in changes to our various risk exposures. These uncertainties could
adversely impact our funding costs and could have a material adverse effect on our business, results of operations,
financial position, and/or cash flows. See Part II, Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — LIBOR Transition” for further details.
2023 Form 10-K — SLM CORPORATION 27
LIQUIDITY RISK
Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain
funding through asset-backed securitizations, and sell loans at attractive prices to help fund any share
repurchase programs that may be authorized from time to time. An inability to effectively manage our
liquidity could negatively impact our ability to fund our business obligations and opportunities, which could
lead to regulatory scrutiny and could have a material adverse effect on our business, financial condition,
results of operations, and/or cash flows.
We must effectively manage the liquidity risk inherent in our business. We require liquidity to meet cash
requirements for such things as day-to-day operating expenses, funding of our Private Education Loan originations,
deposit withdrawals and maturities, payment of any declared dividends on our preferred stock and common stock,
payment of our debt service, and payment for any shares of common stock or preferred stock acquired under any
stock repurchase program or otherwise. Our primary sources of liquidity and funding are customer deposits,
payments received on Private Education Loans and FFELP Loans that we hold, and proceeds from loan sales and
securitization transactions. We may maintain too much liquidity, which can be costly, or we may be too illiquid, which
could result in financial distress during times of economic stress or capital market disruptions.
We fund Private Education Loan originations through asset-backed securitizations and deposits raised by the
Bank, including term and liquid brokered and retail deposits, as well as Educational 529 and Health Savings
Account deposits, and with proceeds received from loan sales. Assets funded through deposits result in refinancing
risk because the average term of the deposits is shorter than the expected term of the Private Education Loan
assets we originate. The significant competition for deposits from other banking organizations that are also seeking
stable deposits to support their funding needs may affect deposit renewal rates, costs, or availability. At December
31, 2023, our brokered deposits totaled $10.3 billion, which represented 47 percent of our total deposits. Brokered
deposits may be more price sensitive than other types of deposits and may become less available if alternative
investments offer higher returns. In addition, our ability to maintain existing balances of all deposit types or obtain
additional deposits of any type may be affected by factors, including those beyond our control, such as a rising
stock market, more attractive returns on alternative investments, perceptions about our existing and future financial
strength, quality of deposit servicing or online banking generally, changes in monetary or fiscal policies that
influence deposit or other rates, general economic conditions, including high unemployment and decreased savings
rates, and adverse developments in the financial services industry generally. See also “— Adverse developments,
and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial
condition and results of operations.” Also, our ability to maintain our current level of deposits or grow our deposit
base could be affected by regulatory restrictions, including the possible imposition by our regulators of prior
approval requirements or restrictions on our offered rates, brokered deposit growth, or other areas.
Our success also depends on our ability to structure Private Education Loan securitizations or execute other
secured funding transactions. Several factors may have a material adverse effect on both our ability to obtain such
funding and the time it takes us to structure and execute these transactions, including the following:
•
•
•
•
•
Persistent and prolonged disruption or volatility in the capital markets (which could occur as a result of,
among other things, general economic conditions, a government debt default, or a government shutdown) or
in the education loan ABS sector specifically;
Degradation of the credit quality or performance of the Private Education Loans we sell or finance through
securitization trusts, or adverse rating agency assumptions, rating actions, or conclusions with respect to
those trusts or the education loan-backed securitization trusts sponsored by other issuers;
A material breach of our obligations to purchasers of our Private Education Loans, including securitization
trusts;
The timing, pricing, and size of education loan asset-backed securitizations other parties issue, or the adverse
performance of, or other problems with, such securitizations;
Challenges to the enforceability of Private Education Loans based on violations of, or changes to, federal or
state consumer protection or licensing laws and related regulations, or imposition of penalties or liabilities on
assignees of Private Education Loans for violation of such laws and regulations; and
• Our inability to structure and gain market acceptance for new product features or services to meet new
demands of ABS investors, rating agencies, or credit facility providers.
28 SLM CORPORATION — 2023 Form 10-K
If we require funding beyond that which we may be able to obtain through deposits and proceeds from ABS
transactions at attractive prices, we may need to raise additional liquidity through other forms of secured and
unsecured debt financing, which, in turn, could increase our funding costs and reduce our net interest margin.
Future downgrades to our credit ratings, or to the credit ratings of our subsidiaries or to the securities issued in our
securitization transactions, also could result in higher funding costs and reduce our net interest margin.
Our ability to sell loans at attractive prices, as well as the timing and volume of any sales, will be subject to
market conditions, and there can be no guarantee that we will be able to effectuate planned or unplanned loan sales
at the prices, times, or volumes we desire, or at all. If we are unable to effectuate loan sales at the prices, times,
and volumes we desire, we may not be able to fund share repurchase programs that are authorized from time to
time, originate Private Education Loans in the volumes we desire, meet other obligations, or achieve other business
goals.
We currently maintain sufficient risk-based capital through adequate retention and reinvestment of earnings
from operations. If our business objectives require capital above and beyond what we generate through retained
earnings, we may need to raise capital for our business by issuing additional equity to investors. Several factors,
some of which may be beyond our control, may have a material adverse effect on our ability to raise funding at any
given time through any of the channels described above in this Risk Factor in the amounts, at the rates, or within
the timeframes we desire or need. If this occurs, our business, results of operations, financial position, and/or cash
flows could be materially and adversely affected.
We conduct quarterly liquidity stress tests to evaluate the adequacy of our liquidity sources under several
stress scenarios, including a severely adverse macroeconomic scenario. The results of these scenarios may lead
management to determine, or our regulators to demand, that higher levels of liquidity be maintained at significant
incremental expense to the Bank.
In structuring and facilitating securitizations or sales of Private Education Loans, administering
securitization trusts, or servicing loans we have securitized or sold, we may incur liabilities to transaction
parties. If those liabilities are significant, they could adversely affect our business, financial condition,
results of operations, and/or cash flows.
Under applicable state and federal securities laws, if investors incur losses as a result of purchasing ABS
issued in connection with our securitization transactions, we could be deemed responsible and could be liable to
investors for damages. We could also be liable to investors or other parties for certain updated performance
information that we may provide subsequent to the original issuances. If we fail to cause the securitization trusts or
other transaction parties to disclose adequately all material information regarding an investment in any securities, if
we or the trusts make statements that are misleading in any material respect in information delivered to investors in
any securities, if we breach any representations or warranties made in connection with securitization of the loans, or
if we breach any other duties as the administrator or servicer of the securitization trusts, it is possible we could be
sued and ultimately held liable to an investor or other transaction party. In transactions involving the sale of loans in
non-securitized form where we remain the servicer of the loans, it is possible we could be sued and ultimately held
liable to the purchaser of the loans or another transaction party for breaches of representations or warranties or
breaches of servicing covenants. If any of those liabilities are significant, they could adversely affect our business,
financial condition, results of operations, and/or cash flows.
Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could
adversely affect our financial condition and results of operations.
In 2023, several financial services institutions failed or required outside liquidity support. For example, Silicon
Valley Bank and Signature Bank were put into FDIC receivership in March 2023 and First Republic Bank was put
into FDIC receivership in May 2023. The impact of this situation led to risk of additional stress to the financial
services industry generally as a result of increased lack of confidence in the financial sector. Although we currently
do not anticipate liquidity constraints of the kind that caused certain other financial services institutions to fail or
require external support, unanticipated deposit withdrawals due to market distress or otherwise or our inability to
access other sources of liquidity, whether due to capital markets dislocations or otherwise, could result in
constraints on our liquidity and adversely affect our business, financial condition, and results of operations.
The financial system is highly interrelated, and we have exposure to, and routinely execute transactions with,
a variety of financial institutions. If any of these financial institutions or participants were to become or be perceived
2023 Form 10-K — SLM CORPORATION 29
as unstable, or enter conservatorship, receivership, or bankruptcy, the consequences could have an adverse effect
on our business, financial condition, and results of operations.
CAPITAL RISK
The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a material adverse effect on our
business, results of operations, and/or financial condition.
Under U.S. Basel III and the regulatory framework for prompt corrective action, the Bank must meet specific
capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices. The Bank’s capital adequacy and its classification under the
prompt corrective action framework are also subject to qualitative judgments by the regulators about components of
capital, risk weightings, and other factors.
If the Bank fails to satisfy regulatory risk-based or leverage capital requirements, it would be subject to serious
regulatory consequences, including restrictions on the ability to make dividend payments or share repurchases, that
could prevent us from successfully executing our business plan and may have a material adverse effect on our
business, results of operations, financial position, and/or cash flows. See Item 1. “Business — Supervision and
Regulation — Regulation of Sallie Mae Bank — Regulatory Capital Requirements.”
Unfavorable results from the periodic stress scenarios we model under regulatory guidance may adversely
affect our business and result in regulatory action that could adversely affect our cost of capital and
liquidity position.
Pursuant to regulatory guidance, the Bank conducts annual capital stress tests, modeling a systemic stress
scenario. In addition, the Bank may model company-specific stress scenarios from time to time. In 2023, the Bank
conducted its annual capital stress tests and the results of these tests were presented to and reviewed by the
Bank’s senior management, the Bank’s Board of Directors, and the Board’s Financial Risk Committee. In addition,
the Bank made the results of the stress tests (its current business forecast) available to its prudential regulators -
the FDIC and the UDFI. Generally, the stress test results include certain measures that evaluate the Bank’s ability to
absorb losses in severely adverse economic and financial conditions. On the basis of a stress analysis, senior
management may elect to adjust its business plans or capital targets to reduce risks identified by the analysis. Our
regulators may also require the Bank to raise additional capital or take other actions, or may impose restrictions on
our business, based on the results of the stress tests. We may not be able to raise additional capital if required to do
so or may not be able to do so on terms that are advantageous to us. Any such capital raises, if required, may also
be dilutive to our existing stockholders. Our regulators may also update their supervisory expectations applicable to
the Bank’s stress tests, which could change how the Bank conducts stress tests or how senior management uses
the results of the stress tests to inform business plans and capital targets.
Changes in accounting standards, or incorrect estimates and assumptions by management in connection
with the preparation of our consolidated financial statements, could adversely affect our capital levels,
results of operation, and/or financial condition.
We are subject to the requirements of entities that set and interpret the accounting standards governing the
preparation of our financial statements and other financial reports. These entities, which include the Financial
Accounting Standards Board (the “FASB”), the SEC, and banking regulators, may add new requirements or change
their interpretations of how those standards should be applied. Changes in our accounting policies or in accounting
standards could materially affect how we report our financial condition and/or results of operations. As a result of
changes to financial accounting or reporting standards, whether promulgated or required by the FASB or other
regulators, we could be required to change certain of the assumptions or estimates we have previously used in
preparing our financial statements, which could negatively impact how we record and report our financial condition,
results of operations, and capital levels.
The preparation of our consolidated financial statements requires us to make critical accounting estimates and
assumptions that affect the reported amounts of assets, liabilities, income, and expenses during the reporting
periods. Incorrect estimates and assumptions by us in connection with the preparation of our consolidated financial
statements could adversely affect the reported amounts of assets, liabilities, income, and expenses. If we make
30 SLM CORPORATION — 2023 Form 10-K
incorrect assumptions or estimates, we may under- or overstate reported financial results, which could materially
and adversely affect our business, financial condition, results of operations, and/or capital levels. For additional
information on the key areas for which assumptions and estimates are used in preparing our financial statements,
see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Critical Accounting Policies and Estimates” and Notes to Consolidated Financial Statements, Note 2, “Significant
Accounting Policies.”
REGULATORY RISK
We operate in a highly regulated environment and the laws and regulations that govern our operations, or
changes in these laws and regulations, or our failure to comply with them, may adversely affect us.
We are subject to extensive regulation and supervision that govern almost all aspects of our operations.
Intended to protect clients, depositors, the DIF, and the overall financial system, these laws, regulations, and
supervisory actions may, among other matters:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
increase minimum capital requirements;
reclassify the types of assets we hold for regulatory capital purposes, including for risk-weightings;
limit the rates of growth of our business;
impose limitations on the business activities in which we can engage;
limit the dividends or distributions the Bank can pay to us;
limit share repurchases;
restrict the payment of discretionary bonuses to executive officers;
restrict the ability of institutions to guarantee our debt;
limit proprietary trading and investments in certain private funds;
impose certain specific accounting requirements on us that may be more restrictive;
result in changes from time to time in our practices, policies, procedures, and personnel in various areas of
our business (including, without limitation, practices and policies regarding the dischargeability of certain
Private Education Loans in the event of a borrower’s bankruptcy);
enhance restrictions regarding money laundering and the financing of terrorism;
enhance requirements related to risk management and corporate governance; and
result in greater or earlier charges to earnings or reductions in our capital.
The FDIC has the authority to limit the Bank’s annual total balance sheet growth, but no such limitations were
imposed in recent years. There can be no assurance that limitations will not be imposed in the future, however.
Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations, as well
as increased intensity in supervision, often impose additional costs and could result in additional charge-offs. In
recent years, there has been an increase in the scope of the laws and regulations and the intensity of the
supervision to which we are subject, as well as an increase in regulatory enforcement and fines across the banking
and financial services sector. The scope of regulation and the intensity of supervision will likely continue to become
higher in the future, which could increase our costs and levels of charge-offs, require increased management
attention, and adversely impact our results of operations.
In connection with their continuous supervision and examinations of us, the FDIC, the UDFI, the CFPB, or
other regulatory agencies may require changes in our business or operations. Such a requirement may be judicially
enforceable or impractical for us to contest, and we could become subject to formal or informal enforcement and
other supervisory actions, including memoranda of understanding, written agreements, cease-and-desist orders,
and prompt-corrective-action or safety-and-soundness directives. Supervisory actions could entail significant
restrictions on our existing business, our ability to develop new business, our flexibility in conducting operations, and
our ability to pay dividends or utilize capital. Enforcement and other supervisory actions also can result in the
imposition of civil monetary penalties or injunctions, related litigation by private plaintiffs, damage to our reputation,
and a loss of customer or investor confidence. We could be required as well to dispose of specified assets and
liabilities or to increase our level of charge-offs within a prescribed period of time. As a result, any enforcement or
2023 Form 10-K — SLM CORPORATION 31
other supervisory action could have an adverse effect on our business, financial condition, results of operations, and
prospects. Restrictions or limitations on our operations, or other directives, imposed by our regulators may be
confidential and thus, in some instances, we may not be permitted to publicly disclose the actions.
In addition, changes in the regulatory and supervisory environments could adversely affect us in substantial
and unpredictable ways, including by limiting the types of financial services and products we may offer, enhancing
the ability of others to offer more competitive financial services and products, restricting our ability to make
acquisitions or pursue other profitable opportunities, and negatively impacting our financial condition and results of
operations. Changes in the prevailing interpretations of federal or state laws and related regulations could also
invalidate or call into question the legality of certain of our services and business practices.
Our failure to comply with the laws, regulations, and supervisory actions to which we are subject, even if the
failure is inadvertent or reflects a difference in interpretation, could subject us to fines, other penalties, and
restrictions on our business activities, any of which could adversely affect our business, financial condition, cash
flows, results of operations, capital base, and/or the price of our securities.
Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and
requirements could subject us to civil and criminal penalties or litigation, including class actions, and have
a material adverse effect on our business.
We are subject to a broad range of federal and state consumer protection laws applicable to our lending and
retail banking activities, including laws governing fair lending, unfair, deceptive and abusive acts and practices,
service member protections, interest rates and loan fees, disclosures of loan terms, marketing, servicing, and
collections.
The CFPB is the Bank’s primary consumer compliance supervisor, with exclusive authority to conduct
examinations for the purposes of assessing compliance with the requirements of federal consumer financial laws
and with primary consumer compliance enforcement authority. CFPB jurisdiction, regulation, and supervision could
increase our costs and limit our ability to pursue business opportunities. The CFPB/ DOE MOU could lead to
additional complaints received by the CFPB regarding us, which could lead to additional scrutiny of us and increase
our costs. Consent orders, decrees, or settlements entered into with governmental agencies may also increase our
compliance costs or restrict certain of our activities.
The CFPB and the FDIC issued guidance to supervised banks with respect to increased responsibilities to
supervise the activities of service providers to ensure compliance with federal consumer protection laws. The
issuance of regulatory guidance and the enforcement of the enhanced vendor management standards via
examination and investigation of us or any third party with whom we do business may increase our costs, require
increased management attention, and adversely impact our operations. In the event we should fail to meet the
heightened standards for management of service providers, we could be subject to supervisory orders to cease and
desist, civil monetary penalties, or other actions due to claimed noncompliance, which could have an adverse effect
on our business, financial condition, operating results, and/or cash flows.
We are also subject to a dynamically changing landscape of privacy, data protection, and cybersecurity laws,
regulations, and requirements. Various federal and state regulators, including governmental agencies, have
adopted, or are considering adopting, laws and regulations regarding the use and disclosure of personal information
and data privacy and security. This patchwork of legislation and regulation may lead to conflicts or differing views of
privacy rights. As an example, certain state laws regarding personal information may be broader in scope or more
stringent than federal laws or the laws of other states regarding personal information. See Item 1. “Business —
Supervision and Regulation —Regulation of Sallie Mae Bank — Privacy Laws” for additional information.
Further, we make public statements about our use, collection, disclosure, and other processing of personal
information through our privacy policies, information provided on our website, and press statements. Although we
endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to
have failed to do so. The publication of our privacy policies and other statements that provide assurances about
privacy, data protection, and data security can subject us to potential regulatory or legal action if they are found to
be deceptive, unfair, or misrepresentative of our actual practices.
Violations of federal or state consumer protection, privacy, data protection, or cybersecurity laws or related
regulations may expose us to litigation, administrative fines, penalties, and restitution. Compliance with laws and
32 SLM CORPORATION — 2023 Form 10-K
regulations can be difficult and costly, and changes to laws and regulations, as well as increased intensity in
compliance and supervision activities, often impose additional compliance costs and may constrain the marketing
and origination of Private Education Loans or other products, adversely affect the collection of balances due on the
loan assets held by us or by securitization trusts, adversely affect the execution of strategic initiatives, or otherwise
adversely affect our business.
From time to time, we may use artificial intelligence, machine learning, data analytics, and similar tools to
collect, aggregate, and analyze data in connection with our business. The regulatory framework for such technology
continues to evolve and remains uncertain and could affect our operations and the way in which we use such
technology. Additionally, we could incur significant costs to comply with such evolving framework, which could
adversely affect our business, financial condition, and results of operations.
Our framework for managing risks, including model risk and data governance risk, may not be effective in
mitigating our risk of loss and, if the framework is ineffective, could have a material adverse effect on us
and our business.
Our risk management framework seeks to mitigate risk and appropriately balance risk and return. We continue
to evolve our risk management framework to consider changes in business and regulatory expectations and to
refine established processes and procedures intended to identify, measure, monitor, test, control, report, escalate,
and mitigate the types of risk to which we are subject. We seek to monitor and control our risk exposure through a
framework of policies, procedures, limits, and reporting requirements.
We also rely on quantitative models to measure and manage risks and estimate certain financial values.
Models may be used in such processes as product pricing, extending credit, measuring interest rate and other
market risk, estimating losses, calculating and assessing capital levels, estimating the value of financial instruments
and balance sheet items, and various other processes. If the models that we use to measure and/or mitigate these
risks and values are poorly designed, based upon incorrect or incomplete information, poorly implemented, or are
otherwise inadequate, or our governance surrounding the management of data we use in our models and other
aspects of our business is poorly designed or implemented, or otherwise is inadequate, our business decisions may
be adversely affected, we may provide inaccurate information to the public or regulators, and/or we may incur
increased losses.
In addition, there may be existing or developing risks that we have not appropriately anticipated, identified, or
mitigated. If our risk management framework does not effectively identify or mitigate our risks, we could suffer
unexpected losses and our business, financial condition, and/or results of operations could be materially adversely
affected. An ineffective risk-management framework or function also could give rise to enforcement and other
supervisory actions, damage our reputation, and result in litigation.
POLITICAL/REPUTATIONAL RISK
Proposals of federal and state governments, or of various political candidates, affecting the student loan
industry in particular, such as proposals for new federal education spending designed to make higher
education “free” or substantially so regardless of financial need, or to create new federally funded
programs to refinance private student loans, or to require private student loan lenders to reform loan
agreements to provide for income-driven repayment plans and other payment plans, subject us to political
risk and could have a material adverse impact on our business, results of operations, financial condition,
and/or cash flows.
We operate in an environment of heightened political and regulatory scrutiny of education loan lending,
servicing, and originations. The rising cost of higher education, questions regarding the quality of education
provided, particularly among for-profit institutions, and the increasing amount of student loan debt outstanding in the
United States have prompted this heightened and ongoing scrutiny. This environment could lead to further
proposals by political candidates and state and federal legislators and regulators, and to the enactment of laws and
regulations, applicable to, or limiting, our business. For instance, over the last several years, numerous proposals
for new federal spending have been discussed by political candidates and/or introduced by legislators to make
higher education “free” or substantially so. Some proposals have included the potential forgiveness of substantial
amounts of existing outstanding student loan indebtedness. Also, various states have proposed and/or enacted
legislation providing for “free” or “substantially free” higher education to residents of the state having incomes below
a certain level and who attend publicly-funded universities in the state. Moreover, a number of bills have been
introduced in the United States Congress in the past to promote federal financing for consolidation or refinancing of
2023 Form 10-K — SLM CORPORATION 33
existing student loans. The regulatory environment at the state level has shifted such that many states recently
have enacted new legislation specifically restricting the conduct and practices of student loan servicers. The
enactment of any proposed legislation or policies like those described above, even if they do not apply specifically
to Private Education Loans, could have a material adverse impact on our business, results of operations, financial
condition, and/or cash flows. In addition, the continued ongoing publicity regarding these various proposals, even if
they are not enacted, could negatively impact the market price of our common stock.
We are subject to reputational risk, including risk arising from environmental, social, and governance
matters or other areas or events, which could damage our brand and have a material adverse impact on our
business, results of operations, financial condition, and/or cash flows.
Our brand is very important to us and our business. Our reputation as an originator, servicer, seller, and
securitizer of high-quality Private Education Loans and as a depository for online deposits is very dependent upon
how our customers, our regulators, legislators, the education community, our employees, and the broader market
perceive our business practices, financial heath, and integrity, and the business practices, financial health, and
integrity of the overall student loan market, other loan markets, or the market for online deposits, as applicable.
Negative publicity, including as a result of our culture, actual or alleged conduct by us, our employees, or our
vendors, or public opinion of the student loan industry or other relevant industries generally, could damage our
reputation and business and adversely impact the price of our common stock or other securities.
Environmental, social, and governance matters, or “ESG,” include, but are not limited to, climate risk, hiring
practices, the diversity of our work force, community impact issues, and our overall governance environment. We
may be exposed to negative publicity based on the identity and activities of those with whom we do business and
the public’s view of our approach and performance, and that of our business partners, regarding ESG matters. Such
negative publicity could damage our relationships and reputation with our existing and prospective customers and
third parties with whom we do business, have an adverse effect on our ability to attract and retain customers and
employees, and have a negative impact on the demand for and market price of our securities. Stakeholders’
expectations regarding ESG practices are diverse and rapidly changing, and we may not be able to align our ESG
practices with such evolving expectations within the timeframes expected by stakeholders or without incurring
significant costs.
Additionally, as described above, proposals of political candidates, administrations, or legislators that may
affect the financial industry, or the student loan industry in particular, could damage our reputation and business and
adversely impact the price of our common stock.
Any internal, market, or other developments, including those relating to our competitors or our business, that
result in a negative impact on our brand or reputation or the reputation of the student loan industry or other relevant
industries could have an adverse effect on our ability to originate, service, sell, securitize, and retain Private
Education Loans or other loans, as applicable, result in greater regulatory, legislative, and media scrutiny, increase
our risk of litigation and regulatory sanctions or other actions, and have a material adverse effect on our financial
condition and/or results of operations.
OPERATIONAL RISKS
Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to
changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or
damage our reputation.
Our business is dependent on our ability to process and monitor large numbers of transactions in compliance
with legal and regulatory standards and our product specifications. As processing demands change and our loan
portfolios grow in both volume and differing terms and conditions, developing and maintaining our operating
systems and infrastructure become increasingly challenging. There is no assurance we can adequately or efficiently
develop, maintain, or acquire access to such systems and infrastructure.
Our loan originations and deposits and the servicing, financial, accounting, data processing, communications,
or other operating systems, processes, and facilities that support them may fail to operate properly, become
disabled as a result of events beyond our control, or be unable to be rapidly configured to timely address regulatory
changes or other business requirements, in each case potentially adversely affecting our ability to process these
transactions adequately. Any such failure could adversely affect our ability to service our customers, result in
financial loss or liability to our customers and investors, disrupt our business, result in regulatory action or litigation,
34 SLM CORPORATION — 2023 Form 10-K
or cause reputational damage. Despite the plans we have in place from time to time, our ability to operate may be
adversely affected by a disruption in the infrastructure that supports our businesses. Notwithstanding our efforts to
maintain business continuity, a disruptive event impacting our processing locations, a failure to adequately
anticipate the level of staffing or effort needed to efficiently and effectively communicate with and service our
customers or to service and collect on our loans, or another similar operational event could adversely affect our
business, financial condition, results of operations, and/or cash flows.
Our business processes are becoming increasingly dependent upon technological advancement, and we
could lose market share if we are not able to keep pace with rapid changes in technology.
Our future success depends, in part, on our ability to underwrite and approve loans, process loan applications
and payments, and provide other customer services, in a safe, automated manner with high-quality service
standards. The volume of loan originations we are able to process is reliant on the systems and processes we have
implemented and developed. These systems and processes are becoming increasingly dependent upon
technological advancement, such as the ability to process loans and payments over the internet or mobile
applications, accept electronic signatures, and provide initial decisions instantly. Our future success also depends,
in part, on our ability to develop and implement technology solutions that keep pace with continuing changes in
technology, industry standards, and client preferences, including FinTech developments. We may not be successful
in anticipating or responding to these developments in a timely manner. We have made, and need to continue to
make, investments in our technology platform to provide competitive products and services and to reduce the
number of manual processes we employ. We may be required to expend significant funds to develop or acquire new
technologies. If competitors introduce products, services, and systems that are better than ours or that are more
cost-effective or that gain greater market acceptance, we could lose market share. Any one of these circumstances
could have a material adverse effect on our business reputation and ability to obtain and retain clients and,
therefore, could materially adversely affect our business, financial condition, and/or results of operations.
We depend on secure information technology and a breach of those systems or those of third-party
vendors could result in significant losses, unauthorized disclosure of confidential customer information,
and reputational damage, which could materially adversely affect our business, financial condition, and/or
results of operations and could lead to significant financial, legal, and reputational exposure.
Our operations rely on the secure collection, processing, storage, and transmission of personal, confidential,
and other information in a significant number of customer transactions on a continuous basis through our computer
systems and networks and those of our third-party service providers. Information security risks for financial
institutions and third-party service providers have increased in recent years and continue to evolve in part because
of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct
financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists,
activists, and other external parties, including foreign state-sponsored actors. These parties also may fraudulently
induce employees, customers, and others who use our or our service providers’ systems or have access to our or
our customers’ data, to gain access to our and our customers’ data or our assets.
We and our service providers face constant threats to our systems and data and from time to time experience
cyberattacks and other security incidents. While we have not been materially impacted by cyber incidents, we
continue to evolve our security controls to improve our ability to prevent, detect, and respond to the continually
changing threats, and we may be required to expend significant additional resources in the future to enhance our
security controls in response to new or more sophisticated threats, as well as new regulations related to
cybersecurity. Additionally, while we and our third-party service providers commit resources to the design,
implementation, maintenance, security, and monitoring of our networks and systems, there is no guarantee that our
security controls, or those of our third-party service providers, will protect against all threats.
Despite the measures we and our third-party service providers implement to protect our systems and our or
our customers’ data, we may not be able to anticipate, prevent, or detect cyberattacks, particularly because the
techniques used by attackers change frequently or are not recognized until launched, and because cyberattacks
can originate from a wide variety of sources, including third parties who are or may be involved in organized crime
or linked to terrorist organizations or hostile foreign governments. Such third parties may seek to gain unauthorized
access to our systems either directly or using equipment or security passwords belonging to employees, customers,
third-party service providers, or other users of our systems or those of our third-party service providers. Or, they
may seek to disrupt or disable our or our service providers’ services through attacks such as denial-of-service and
ransomware attacks. In addition, we or our service providers may be unable to identify, or may be significantly
2023 Form 10-K — SLM CORPORATION 35
delayed in identifying, cyberattacks and incidents due to the increasing use of techniques and tools that are
designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic artifacts. As a result, our
computer systems, software, and networks, as well as those of third-party vendors we utilize, may be vulnerable to
unauthorized access, computer viruses, malware attacks, and other events that could have a security impact
beyond our control. We also routinely transmit and receive personal, confidential, and proprietary information, some
through third parties, which may be vulnerable to interception, misuse, or mishandling. This risk may be heightened
by our hybrid work environment, which may lead to unanticipated issues arising from handling personal,
confidential, and other information from a less efficient work-from-home environment.
If one or more of such events occur, personal, confidential, and other information processed by, stored in, or
transmitted through, our computer systems and networks, or those of third-party vendors, could be compromised or
could cause interruptions or malfunctions in our or our customers’ or service providers’ operations that could result
in significant losses, loss of business by us and loss of confidence in us, customer dissatisfaction, significant
litigation, regulatory exposures, and harm to our reputation and brand. In addition, we may be required to expend
significant resources to modify our protective measures, to investigate the circumstances surrounding the event,
and implement mitigation and remediation measures. We also may be subject to fines, penalties, litigation (including
securities fraud class action lawsuits) and regulatory investigation costs and settlements and other financial losses.
If one or more of such events occur, our business, financial condition, and/or results of operations could be
significantly and adversely affected.
While we seek to mitigate cyber and related risks associated with outsourcing to third-party service providers,
including through our vendor management processes, both operational and technological cyber risks remain, and
certain risks are beyond our security and control systems. Cyberattacks targeted at our service providers or in other
areas of our business chain may result in unauthorized interception, misuse, mishandling, access, acquisition, loss,
or destruction of our or our customers’ data, or other cyber incidents that may affect the availability of our services,
and impose costs and other liabilities that significantly and adversely affect us in the ways discussed above.
While we maintain insurance coverage that may apply to various cybersecurity risks and liabilities, there is no
guarantee that any or all costs or losses incurred would be partially or fully covered.
We depend significantly on third parties for a wide array of our operations and customer services and key
components of our information technology infrastructure, and a breach of security or service levels, or
violation of law by one of these third parties, could disrupt our business or provide our competitors with an
opportunity to enhance their position at our expense.
We depend significantly on third parties for a wide array of our operations and customer services and key
components of our information technology and security infrastructures. Third-party vendors are significantly involved
in aspects of our servicing for Private Education Loans, FFELP Loans, Bank deposit-taking activities, payroll
software and systems development, data center and operations, including the timely and secure transmission of
information across our data communication network, and for “cloud” computing services and other
telecommunications, email, processing, storage, remittance, and technology-related services in connection with our
business. If a service provider fails to provide the services we require or expect, or fails to meet applicable
regulatory or contractual requirements, such as service levels, protection of our customers’ personal and
confidential information, or compliance with applicable laws, that failure could negatively impact our business by
adversely affecting our ability to process customers’ transactions in a timely and accurate manner, otherwise
hampering our ability to serve our customers and investors, or subjecting us to litigation and regulatory risk for
matters as diverse as poor vendor oversight, improper release or protection of personal information, or release of
incorrect information. Such a failure could adversely affect the perception of the reliability of our networks and
services, and the quality of our brand, and could materially adversely affect our business, financial condition, and/or
results of operations.
We may face risks from our operations related to litigation or regulatory or supervisory actions that could
result in significant legal expenses and settlement or damage awards.
Defending against litigation or regulatory or supervisory actions may require significant attention and
resources of management and, regardless of the outcome, such actions could result in significant expenses. If we
are a party to material litigation or regulatory or supervisory actions and if the defenses we assert are ultimately
unsuccessful, or if we are unable to achieve a favorable outcome, we could be liable for large damages, penalties,
36 SLM CORPORATION — 2023 Form 10-K
or other costs or charge-offs and that could have a material adverse effect on our business, results of operations,
and/or financial condition.
Our internal controls over financial reporting and disclosure controls, as well as other internal controls,
may be ineffective, which could have a material adverse effect on our financial condition and/or results of
operations.
Our management is responsible for maintaining, regularly assessing and, as necessary, making changes to
our internal controls over financial reporting and our disclosure controls. Nevertheless, our internal controls over
financial reporting and our disclosure controls can provide only reasonable assurances regarding the reliability of
our financial reporting and the preparation of our financial statements for external purposes in accordance with
generally accepted accounting principles in the United States (“GAAP”) and may not prevent or detect
misstatements. Any failure or circumvention of our internal controls over financial reporting or our disclosure
controls, failure to comply with rules and regulations related to such controls, or failure to make sound and
appropriate application of the criteria established in the framework set forth in Internal Control-Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission could have
a material adverse effect on our financial condition and/or results of operations.
Other internal controls, including fraud detection and controls, and corporate governance procedures also are
based on the assumption that they can provide only reasonable, not absolute, assurances the objectives of the
controls and procedures are met. Any failure or circumvention of controls and procedures, including as a result of
human error, malfeasance of employees or third parties, or other misconduct by employees or third parties, can
result in legal risk and reputational harm and have a material adverse effect on our business, financial condition,
and/or results of operations.
Our business operations and those of our third-party vendors may be adversely impacted by political
events, terrorism, cyberattacks, public health issues (including pandemics), natural disasters, severe
weather, climate change, infrastructure failure or outages, labor disputes, business interruptions, and other
unpredictable catastrophic events.
Our business operations and those of our third-party vendors are subject to interruption by, among other
things, geopolitical events, terrorism, cyberattacks, public health issues (including pandemics), natural disasters,
severe weather, climate change, infrastructure failure or outages, labor disputes, and other unpredictable
catastrophic events, which could decrease demand for our products and services or make it difficult or impossible
for us to deliver a satisfactory experience to our customers.
Any of the unpredictable catastrophic events discussed above could affect the stability of our deposit base,
impair the ability of our borrowers and cosigners to repay their outstanding loans, cause significant property
damage, and result in loss of revenue and/or cause us to incur additional expenses. The occurrence of any such
event could have a material adverse impact on our business, financial condition, results of operations, and/or cash
flows.
The current and anticipated effects of climate change are creating an increasing level of concern for the state
of the global environment. As a result, political and social attention to the issue of climate change has increased. In
recent years, governments across the world have entered into international agreements to attempt to reduce global
temperatures, in part by limiting greenhouse gas emissions. The United States Congress, state legislatures, and
federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory
initiatives seeking to mitigate the effects of climate change. Such initiatives have been pursued with rigor under the
current presidential administration. In October 2023, the FDIC finalized principles for climate risk management by
“large financial institutions.” Although the Bank currently does not meet the definition of a “large financial institution”
with over $100 billion in total consolidated assets, if it were ever to become subject to those principles in the future,
such measures could result in the implementation of significant operational changes and increased costs. We also
might voluntarily choose to follow some of the principles for climate risk management in the future. Required or
voluntary compliance with such principles could lead us to expend significant capital and incur compliance,
operating, maintenance, and remediation costs. Given the lack of empirical data on the credit and other financial
risks posed by climate change, it is impossible to predict how climate change may impact our financial condition and
operations.
2023 Form 10-K — SLM CORPORATION 37
New lines of business or new products and services may subject us to additional risks. Additionally, our
ability to successfully make acquisitions is subject to significant risks, including the risk that governmental
authorities may not provide any requisite approvals, the risk that integrating acquisitions may be more
difficult, costly, or time consuming than expected, and the risk that the value of acquisitions may be less
than anticipated.
From time to time, we may implement or acquire new lines of business or offer new products and services, or
enter into new business arrangements with third-party service providers, alternative payment providers, or other
industry participants. We may face compliance and regulatory risks in each of those cases. We also may from time
to time seek to acquire other financial services companies or businesses that complement our business strategy.
These acquisitions may be subject to regulatory approval in some instances, and no assurance can be provided
that we will be able to obtain that approval in a timely manner or at all or that approval may not be subject to
burdensome conditions. Even if we are able to obtain any required regulatory approval, the failure of other closing
conditions to be satisfied or waived could delay the completion of an acquisition for a significant period of time or
prevent it from occurring altogether. Any failure or delay in closing an acquisition could adversely affect our
reputation, business, and performance.
Acquisitions and/or implementation of new lines of business, products, or services involve numerous risks and
uncertainties, including inaccurate financial and operational assumptions, incomplete or failed due diligence, lower-
than-expected performance, higher-than-expected costs, difficulties related to integration, diversion of
management’s attention from other business activities, adverse market or other reactions, changes in relationships
with customers or counterparties, the potential loss of key personnel, and the possibility of litigation and other
disputes. An acquisition also could be dilutive to our existing stockholders if we were to issue common stock to fully
or partially pay or fund the purchase price. Moreover, we may not be successful in identifying appropriate acquisition
candidates, integrating acquired businesses or companies, or realizing expected value from acquisitions or new
lines of business, products, or services. Significant competition exists for valuable acquisition targets, and we may
not be able to acquire other businesses or companies on attractive terms. No assurance can be given that we will
pursue future acquisitions, and our ability to grow and successfully compete may be impaired if we choose not to
pursue or are unable to successfully make acquisitions or implement new lines of business, products, or services.
RISKS RELATED TO SPIN-OFF
Because of Navient’s indemnification obligations, we have exposures to risks related to its
creditworthiness. If we are unable to obtain indemnification payments from Navient, we could experience
higher-than-expected costs and operating expenses and our results of operations, cash flows, and/or
financial condition could be materially and adversely affected.
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 specifically assumed by the Bank in the agreement as to which the Bank would be obligated to
indemnify Navient. 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/or financial condition could
be materially and adversely affected over time.
GENERAL RISKS
The holders of our preferred stock have rights that are senior to those of our common shareholders.
At December 31, 2023, we had issued and outstanding 2.5 million shares of our Series B Preferred Stock. Our
Series B Preferred Stock is senior to our shares of common stock in right of payment of dividends and other
distributions. Generally, we must be current on dividends payable to holders of our Series B Preferred Stock before
any dividends can be paid on our common stock. We also must comply with certain provisions that are protective of
the Series B Preferred Stock in order to effectuate any repurchases under our common stock share repurchase
program. In the event of our bankruptcy, dissolution, or liquidation, the holders of our Series B Preferred Stock must
be satisfied before any distributions can be made to our common shareholders.
38 SLM CORPORATION — 2023 Form 10-K
We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our
common stock, and make payments on our corporate debt.
The declaration and payment of future common stock dividends, as well as the amount thereof, are subject to
determination by, and the discretion of, our Board of Directors. In addition, we may change our policy regarding the
payment of dividends and reduce or eliminate our common stock dividend in the future, which could adversely affect
the market price of our common stock.
Our share repurchase programs permit us to repurchase from time to time shares of our common stock up to
an aggregate repurchase price not to exceed the authorized limits described in this Form 10-K. We may not be able
to sell loans at prices, in volumes, or on a schedule, that will provide us with sufficient funds to effect share
repurchases under our share repurchase programs. Additionally, we may pause or discontinue our share
repurchase programs for other reasons, such as legal or regulatory considerations, or because we decide to
allocate available funds for other corporate priorities. The timing and volume of any repurchases will be subject to
market conditions, and there can be no guarantee that we will repurchase up to the limit of any program or at all,
which could adversely affect the market price of our common stock.
We are dependent on funds obtained from the Bank to fund corporate debt payments, dividend payments, and
any share repurchases. Regulatory and other legal restrictions may limit our ability to transfer funds freely, either to
or from our subsidiaries. In particular, the Bank is subject to laws and regulations that authorize regulatory bodies to
block or reduce the flow of funds to us, or that prohibit such transfers altogether in certain circumstances. These
laws, regulations, and rules may hinder our ability to access funds that we may need to make payments in respect
of our stock or to satisfy our other responsibilities. The FDIC has the authority to prohibit or limit the payment of
dividends by the Bank and SLM Corporation.
Our business could be negatively affected if we are unable to attract, retain, and motivate skilled
employees.
Our success depends, in large part, on our ability to retain key senior leaders and to attract and retain skilled
employees and subject matter experts. We depend on our senior leaders and skilled employees and subject matter
experts to oversee initiatives across the enterprise and execute on our business plans in an efficient and effective
manner. Competition for such senior leaders and employees, and the cost associated with attracting and retaining
them, is high. Recent scrutiny of compensation in the financial services industry has introduced additional
challenges in this area. Our ability to attract and retain qualified employees also is affected by perceptions of our
culture and management, our profile in the regions where we have offices, and the professional opportunities we
offer. We rely upon our senior leaders not only for business success, but also to lead with integrity. To the extent our
senior leaders behave in a manner that does not comport with our values, the consequences to our brand and
reputation could be severe and could adversely affect our financial condition and results of operations. If we are
unable to attract, develop, and retain talented senior leadership and employees, or to implement appropriate
succession plans for our senior leadership and subject matter experts, our business could be negatively affected.
Item 1B. Unresolved Staff Comments
None.
2023 Form 10-K — SLM CORPORATION 39
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the
confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management
program includes a cybersecurity incident response plan.
We use the Cyber Risk Institute Profile (which is based on the National Institute of Standards and Technology
Cybersecurity Framework), the Federal Financial Institutions Examination Council Information Technology
Examination Handbook and Cyber Assessment Tool, and the Payment Card Industry Data Security Standards as
guides to help us identify, assess, and manage cybersecurity risks relevant to our business and develop and
implement our cybersecurity risk management program. This does not imply that we meet any particular technical
standards, specifications, or requirements.
Our cybersecurity risk management program is integrated with our overall enterprise risk management
program, and shares common methodologies, reporting channels, and governance processes that apply across the
enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program includes the following key elements:
•
•
•
•
•
•
risk assessments designed to help identify material cybersecurity risks to our critical systems, information,
services, and our broader enterprise information technology (“IT”) environment;
a team comprised of IT security, IT infrastructure, and IT compliance personnel principally responsible for
directing (i) our cybersecurity risk assessment processes, (ii) our security processes, and (iii) our response
to cybersecurity incidents;
the use of external cybersecurity service providers, where appropriate, to assess, test, or otherwise assist
with aspects of our security processes;
cybersecurity awareness training of employees with access to our IT systems;
a cybersecurity incident response plan and Crisis Management Policy that guide our response to
cybersecurity incidents; and
a third-party risk identification and management process for service providers.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity
incidents, that have materially affected us, including our operations, business strategy, results of operations, or
financial condition. We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to
materially affect us, including our operations, business strategy, results of operations, or financial condition. See
Part I, Item 1A. “Risk Factors – OPERATIONAL RISKS – We depend on secure information technology and a
breach of those systems or those of third-party vendors could result in significant losses, unauthorized disclosure of
confidential customer information, and reputational damage, which could materially adversely affect our business,
financial condition, and/or results of operations and could lead to significant financial, legal, and reputational
exposure” in this Form 10-K.
Cybersecurity Governance
Our Board of Directors considers cybersecurity risk as critical to the enterprise and delegates the cybersecurity
risk oversight function to the Operational and Compliance Risk Committee of the Board. The Operational and
Compliance Risk Committee of our Board of Directors oversees management’s design, implementation, and
enforcement of our cybersecurity risk management program.
Our Chief Security Officer (“CSO”) reports to our Chief Operational Officer and President of the Bank and leads
the Company’s overall cybersecurity function. Our CSO provides periodic updates on our cybersecurity risk
management program to the management-level Operational and Compliance Risk Committee (“OCRC”) and
Executive Committee (“EC”). The Operational and Compliance Risk Committee of our Board of Directors also
receives periodic reports from our CSO on our cybersecurity risks, including briefings on our cyber risk management
program and cybersecurity incidents.
40 SLM CORPORATION — 2023 Form 10-K
Our CSO supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents
through various means, which include: briefings from internal security personnel; threat intelligence and other
information obtained from governmental, public, or private sources, including external cybersecurity service
providers; and alerts and reports produced by security tools deployed in the IT environment.
Our CSO is responsible for assessing and managing our material risks from cybersecurity threats, has primary
responsibility for leading our overall cybersecurity risk management program, and supervises both our internal
cybersecurity personnel and our external cybersecurity service providers. Our CSO has significant executive
experience in managing and leading IT and cybersecurity teams in both government and the private sector and has
received industry recognition in the cybersecurity area. Our CSO holds cybersecurity certifications from leading
cybersecurity training and research institutes, is a Fellow at the National Security Institute, and is a member of the
Board of Directors of the Financial Services Information Sharing and Analysis Center.
Item 2. Properties
The following table lists the principal facility owned by us as of December 31, 2023:
Location
Function
Approximate
Square Feet
Newark, DE
Headquarters
160,000
The following table lists the principal facilities leased by us as of December 31, 2023:
Location
Function
Approximate
Square Feet
Indianapolis, IN
New Castle, DE
Sterling, VA
Newton, MA
Salt Lake City, UT
Administrative Offices
Loan Servicing Center
Administrative Offices
Administrative Offices
Sallie Mae Bank
115,000
125,000
27,000
14,000
17,000
The facility that we own is not encumbered by a mortgage. We believe that our headquarters, loan servicing
centers, data center, back-up facility, and data management and collection centers are generally adequate to meet
our long-term lending and business goals. Our headquarters are currently located in owned space at 300
Continental Drive, Newark, Delaware, 19713.
2023 Form 10-K — SLM CORPORATION 41
Item 3.
Legal Proceedings
We and our subsidiaries and affiliates are subject to various claims, lawsuits, and other actions that arise in
the normal course of business. It is common for the Company, our subsidiaries, and affiliates to receive information
and document requests and investigative demands from state attorneys general, legislative committees, and
administrative agencies. These requests may be for informational or regulatory purposes and may relate to our
business practices, the industries in which we operate, or other companies with whom we conduct business. Our
practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.
Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of
the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or
expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except
for certain liabilities related to the conduct of the pre-Spin-Off consumer banking business that were specifically
assumed by the Bank (and as to which the Bank is obligated to indemnify Navient). Navient has acknowledged its
indemnification obligations under the Separation and Distribution Agreement, in connection with the previously
disclosed investigation matters and the now resolved multistate litigation. Navient has informed the Bank, however,
that it believes the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the
above-described lawsuits under the Separation and Distribution Agreement and/or a separate loan servicing
agreement between the parties, and has suggested that the parties defer further discussion regarding
indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits. The Bank
disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly
indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue.
Regulatory Update
In May 2014, the Bank received a CID from the CFPB as part of the CFPB Investigation. To the extent
requested, the Bank has been cooperating fully with the CFPB. Given the timeframe covered by the CID and the
CFPB Investigation, and the focus on practices and procedures previously conducted by Navient and its servicing
subsidiaries prior to the Spin-Off, Navient is leading the response to these investigations. Consequently, we have no
basis from which to estimate either the duration or ultimate outcome of this investigation.
We note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against
Navient, along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc. The complaint alleges
these Navient entities, among other things, engaged in deceptive practices with respect to their historic servicing
and debt collection practices. Neither SLM, the Bank, nor any of their current subsidiaries are named in, or
otherwise a party to, the lawsuit and are not alleged to have engaged in any wrongdoing. The CFPB’s complaint
asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement.
Item 4. Mine Safety Disclosures
N/A
42 SLM CORPORATION — 2023 Form 10-K
PART II.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of
Equity Securities
Our common stock is listed and has traded on the NASDAQ Global Select Market (“Nasdaq”) under the
symbol SLM since December 12, 2011. As of January 31, 2024, there were 220,349,715 shares of our common
stock outstanding and 246 holders of record.
We paid quarterly cash dividends on our common stock of $0.11 per share for each quarter of 2023 and 2022.
We paid quarterly cash dividends on our common stock of $0.03 per share for the first, second, and third quarters of
2021, respectively, and $0.11 per share for the fourth quarter of 2021. Common stock dividend declarations are
subject to determination by, and the discretion of, our Board of Directors. We may change our common stock
dividend policy at any time.
Issuer Purchases of Equity Securities
The following table provides information relating to our purchase of shares of our common stock in the three
months ended December 31, 2023.
(In thousands,
except per share data)
Period:
October 1 - October 31, 2023
November 1 - November 30, 2023
December 1 - December 31, 2023
Total fourth-quarter 2023
Total Number
of Shares
Purchased(1)
Average Price
Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(2)(3)
Approximate Dollar Value
of Shares That May Yet Be
Purchased Under
Publicly Announced Plans or
Programs
at December 31, 2023(2)
3
4,230
1,730
5,963
$
$
$
$
12.86
14.95
16.63
15.43
—
4,229
1,723
5,952
$326,000
$264,000
$236,000
(1)The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) shares
of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding
obligations in connection with exercises of stock options and vesting of restricted stock, restricted stock units, and performance stock units.
(2)In the first quarter of 2022, we utilized all capacity then remaining under the 2021 Share Repurchase Program. As of December 31, 2023, we
had $236 million of capacity remaining under the 2022 Share Repurchase Program.
(3)In the fourth quarter of 2023, we repurchased 6.0 million common shares under our 10b5-1 trading plans. See Note 14, “Stockholders’ Equity”
to our consolidated financial statements in this Form 10-K for further discussion.
The closing price of our common stock on Nasdaq on December 29, 2023 was $19.12.
The 2019 Share Repurchase Program expired on January 22, 2021 and permitted us to repurchase from time
to time shares of our common stock up to an aggregate repurchase price not to exceed $200 million. We utilized all
capacity under the 2019 Share Repurchase Program, having repurchased 3 million shares of common stock for $33
million in the year ended December 31, 2020.
The 2020 Share Repurchase Program expired on January 21, 2022 and permitted us to repurchase shares of
common stock from time to time up to an aggregate repurchase price not to exceed $600 million.
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an ASR with
a third-party financial institution under which we paid $525 million for an upfront delivery of our common stock and a
forward agreement. On March 11, 2020, the third-party financial institution delivered to us approximately 44.9 million
shares. The final total actual number of shares of common stock delivered to us pursuant to the forward agreement
was based generally upon a volume-weighted average price at which the shares of our common stock traded during
the regular trading sessions on Nasdaq during the term of the ASR. The transactions were accounted for as equity
transactions and were included in treasury stock when the shares were received, at which time there was an
immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share.
2023 Form 10-K — SLM CORPORATION 43
On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an
additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share
of $9.01. Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares of
common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the
2020 Share Repurchase Program.
On January 27, 2021, we announced the 2021 Share Repurchase Program, which was effective upon
announcement and expired on January 26, 2023, and originally permitted us to repurchase shares of our common
stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that
could be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in
addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share
Repurchase Program authorization of $1.5 billion. Of the total $1.5 billion 2021 Share Repurchase Program
authorization, we repurchased 81.1 million shares of common stock at an average price per share of $18.07, for
$1.46 billion in the year ended December 31, 2021. (Those amounts include the shares repurchased under the
Tender Offer described below.) We also repurchased 2.0 million shares of common stock under the 2021 Share
Repurchase Program for $38 million in the three months ended March 31, 2022. We have utilized all capacity under
the 2021 Share Repurchase Program.
On January 26, 2022, we announced the 2022 Share Repurchase Program, which was effective upon
announcement and expired on January 25, 2024, and permitted us to repurchase shares of our common stock from
time to time up to an aggregate repurchase price not to exceed $1.25 billion. Under the 2022 Share Repurchase
Program, we repurchased 22.3 million shares of common stock at an average price per share of $15.64, for $349
million in the year ended December 31, 2023, and we repurchased 38.2 million shares of common stock at an
average price per share of $17.52, for $669 million in the year ended December 31, 2022. There was $236 million
of capacity remaining under the 2022 Share Repurchase Program at December 31, 2023. Any capacity remaining
unused under the 2022 Share Repurchase Program on January 25, 2024 expired on that date pursuant to the terms
of the 2022 Share Repurchase Program.
On January 24, 2024, we announced the 2024 Share Repurchase Program, which became effective on
January 26, 2024 and expires on February 6, 2026, and permits us to repurchase shares of our common stock from
time to time up to an aggregate repurchase price not to exceed $650 million.
Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety
of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans,
negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions.
The timing and volume of any repurchases will be subject to market conditions, and there can be no guarantee that
the Company will repurchase up to the limit of the 2024 Share Repurchase Program or at all.
Common Stock Tender Offer
On February 2, 2021, under the auspices of the 2021 Share Repurchase Program, we announced the
commencement of the Tender Offer to purchase up to $1 billion in aggregate purchase price of our outstanding
shares of common stock, par value $0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million
shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of
approximately $472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million
shares purchased in connection with the Tender Offer. This cancellation decreased the balances of common stock
by $6 million and of additional paid-in capital by $466 million, respectively.
Share Repurchases under our Rule 10b5-1 Trading Plans
During the years ended December 31, 2023, 2022, and 2021, we repurchased 22 million, 40 million, and
57 million shares, respectively, of our common stock at a total cost of $349 million, $708 million, and $1.1 billion,
respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs.
In addition to any repurchases that we may make under the share repurchase programs, we expect to
repurchase common stock acquired as a result of taxes withheld in connection with award exercises and vesting
under our employee stock-based compensation plans.
44 SLM CORPORATION — 2023 Form 10-K
Stock Performance
The following graph compares the five-year cumulative total returns of SLM Corporation, the S&P
Supercomposite Consumer Finance Sub-Industry Index, and the S&P 400 Regional Bank Sub-Industry Index.
This graph assumes $100 was invested in the stock or the relevant index on December 31, 2018, and also
assumes the reinvestment of dividends through December 31, 2023.
Five-Year Cumulative Total Stockholder Return
Company/Index
SLM Corporation
12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23
$100.0 $108.6 $153.0 $245.6 $212.5 $252.2
S&P Supercomposite Consumer Finance
Sub-Industry Index
S&P 400 Regional Bank Sub-Industry
Index
Source: Bloomberg Total Return Analysis
100.0
135.0
136.1
185.9
149.7
192.4
100.0
124.6
113.9
161.3
154.6
153.2
2023 Form 10-K — SLM CORPORATION 45
SLM CorporationS&P Supercomposite Consumer Finance Sub-Industry IndexS&P 400 Regional Bank Sub-Industry Index201820192020202120222023$0$100$200$300
Item 6. Selected Financial Data.
The following table sets forth our selected financial and other operating information. The selected financial
data in the table is derived from our consolidated financial statements. The data should be read in conjunction with
the consolidated financial statements, related notes, and Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”
Basic earnings per common share
$ 2.44
$ 1.78
$ 3.67
Years Ended December 31,
(dollars in millions, except per share amounts)
Operating Data:
Net interest income
Non-interest income
Total revenue
Net income
Diluted earnings per common share
Dividends per common share(1)
Return on common stockholders’ equity
Net interest margin
Return on assets
Dividend payout ratio
Average equity/average assets
Balance Sheet Data:
Total education loans held for investment
portfolio, net
Total assets
Total deposits
Total borrowings
2023
2022
2021
2020
2019
$ 1,562
$ 1,489
$ 1,395
$ 1,480
$ 1,623
247
335
632
1,809
1,824
2,027
$
581
$
469
$ 1,161
$ 2.41
$ 1.76
$ 3.61
$ 0.44
$ 0.44
$ 0.20
331
1,811
881
2.27
2.25
0.12
$
$
$
$
49
1,672
578
1.31
1.30
0.12
$
$
$
$
36 %
25 %
54 %
45 %
21 %
5.50
2.03
18
6.37
5.31
1.64
25
7.19
4.81
3.92
6
8.09
4.81
2.84
5
7.23
5.76
1.96
9
10.56
$ 20,306
$ 19,627
$ 20,318
$ 19,172
$ 23,680
29,169
28,811
29,222
30,770
32,686
21,653
21,448
20,828
22,666
24,284
5,228
5,235
5,931
5,189
2,563
6.16
4,643
3,312
6.91
Total SLM Corporation stockholders’ equity
1,881
1,727
2,150
Book value per common share
7.40
6.13
6.81
(1) Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors. We may change
our common stock dividend policy at any time.
46 SLM CORPORATION — 2023 Form 10-K
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our consolidated financial statements and
related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis also contains forward-
looking statements and should be read in conjunction with the disclosures and information contained in “Forward-Looking
and Cautionary Statements” and Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K.
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.
Overview
The following discussion and analysis presents a review of our business and operations as of and for the year ended
December 31, 2023.
Key Financial Measures
Set forth below are brief summaries of our key financial measures. Our operating results are primarily driven by net
interest income from our Private Education Loan portfolio, gains and losses on loan sales, provision expense for credit
losses, and operating expenses. The growth of our business and the strength of our financial condition are primarily driven
by our ability to achieve our annual Private Education Loan origination goals while sustaining credit quality and
maintaining cost-efficient funding sources to support our originations.
Net Interest Income
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.
Loan Sales and Secured Financings
We may sell loans to third parties through whole loan sales, securitizations, or other similar transactions. We
typically retain servicing of loans subsequent to their sale and earn revenue for this servicing at prevailing market rates for
such services. Selling loans removes the loan assets from our balance sheet and helps us manage our asset growth,
capital, and liquidity needs. Alternatively, we may use loans as collateral in connection with the creation of asset-backed
securitizations or secured funding facilities structured as financings. These types of transactions may provide us long-term
financing, but they do not remove loan assets from our balance sheet, nor do they generate gains on sales of loans, net.
Consequently, our operating results may be significantly affected by whether we choose to sell loans and recognize
current gains on sale or continue to hold or finance loans, thereby retaining some or all the net interest income from those
loans. In 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.”
2023 Form 10-K — SLM CORPORATION 47
Allowance for Credit Losses
Management estimates and maintains an allowance for credit losses for the lifetime expected credit losses on loans
in our portfolios, as well as for future loan commitments, at the reporting date. See “ — Critical Accounting Policies and
Estimates — Allowance for Credit Losses.” Allowances for credit losses are an important indicator of management’s
perspective on the future performance of a loan portfolio. Each quarter, management makes an adjustment to the
allowance for credit losses to reflect its most up-to-date estimate of future losses by recording a charge against quarterly
revenues known as provision expense. As they occur, actual loan charge-offs and recoveries are then charged or
credited, respectively, against the allowance for credit losses rather than against earnings.
The allowance for credit losses and provision expense rise in periods of high loan origination, when future charge-
offs are expected to increase, and fall when future charge-offs are expected to decline. We bear the full credit exposure on
our Private Education Loans. Losses on our Private Education Loans are affected by risk characteristics such as loan
status (in-school, grace, forbearance, repayment, and delinquency), loan seasoning (number of months in active
repayment), underwriting criteria (e.g., credit scores), presence of a cosigner, servicing and collections practices, and the
current economic environment. See “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. 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.
Charge-Offs and Delinquencies
Delinquencies are another important indicator of potential future credit performance. Private Education Loans are
charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as
a loss by us or our regulator. Charge-off data provides relevant information with respect to the actual performance of a
loan portfolio over time. Management focuses on delinquencies as well as the progression of loans from early to late
stage delinquency as a key metric in estimating the allowance for credit losses and tailoring its future collections
strategies. We sell a segment of defaulted loans immediately after charge-off, and use in-house collectors and third-party
collectors to collect on retained defaulted loans.
Operating Expenses
The cost of operating our business directly affects our profitability. We strive to manage growth in our business in a
prudent fashion by focusing on investments to improve efficiency. We monitor and report internally various metrics,
including cost to acquire and cost to service our loans (which include both owned and serviced loans), among others. The
cost to acquire is affected by such variables as technology, personnel, and marketing costs. Servicing expenses primarily
include compensation and benefit expenses related to our collections, customer support, and payment processing
employees, and technology costs and other expenses associated with facilitating and servicing borrowers. Costs to
service can vary period to period based upon seasonality and borrower payment status. The cost to service a delinquent
borrower is significantly higher than the cost to service a current or in-school borrower.
Private Education Loan Originations
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.
Funding Sources
Deposits
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. 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.
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.
2023 Form 10-K — SLM CORPORATION 49
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
In 2023, we recognized $164 million in gains from the sale of approximately $3.15 billion of our Private Education
Loans, including $2.93 billion of principal and $226 million in capitalized interest, to an unaffliated third party. 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.
See “Item 1. 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
We present the results of operations below on a consolidated basis in accordance with GAAP.
GAAP Consolidated Statements of Income
Years ended December 31,
(dollars in millions, except per share
amounts)
Interest income:
Loans
Investments
Cash and cash equivalents
Total interest income
Total interest expense
Net interest income
Increase (Decrease)
2023 vs. 2022
2022 vs. 2021
2023
2022
2021
$
%
$
%
$ 2,327 $ 1,915
$ 1,757
$ 412
22 % $ 158
9 %
51
214
35
82
14
6
2,592
2,032
1,777
1,030
543
382
1,562
1,489
1,395
16
132
560
487
73
46
161
28
90
5
21
76
255
161
94
150
1,267
14
42
7
Less: provisions for credit losses
345
633
(33)
(288)
(45)
666
2,018
Net interest income after provisions for
credit losses
Non-interest income:
Gains on sales of loans, net
Gains (losses) on securities, net
Other income
Total non-interest income
Non-interest expenses:
Total operating expenses
Acquired intangible assets
impairment and amortization expense
Restructuring expenses
Total non-interest expenses
Income before income tax expense
Income tax expense
Net income
Preferred stock dividends
Net income attributable to SLM
Corporation common stock
1,217
855
1,428
362
42
(573)
(40)
160
3
84
247
619
66
—
685
778
197
581
18
328
(60)
67
335
551
8
—
559
631
162
469
9
548
(168)
(51)
(220)
(40)
39
45
632
519
—
1
520
1,540
380
1,160
63
17
105
25
(88)
(26)
68
58
—
126
147
35
112
12
725
—
23
23
22
24
(99)
(254)
22
(297)
49
(47)
32
6
8
100
(1)
(100)
39
(909)
(218)
(691)
8
(59)
(57)
(60)
4
9
100
5
125
Basic earnings per common share
$ 2.44 $ 1.78
$ 3.67
$ 0.66
37 % $ (1.89)
Diluted earnings per common share
$ 2.41 $ 1.76
$ 3.61
$ 0.65
37 % $ (1.85)
$
564 $
460
$ 1,156
$ 104
23 % $ (696)
(60) %
(51) %
(51) %
Declared dividends per common
share
$ 0.44 $ 0.44
$ 0.20
$ —
— % $ 0.24
120 %
2023 Form 10-K — SLM CORPORATION 51
GAAP Consolidated Earnings Summary
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022
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 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.
Provision for credit losses in 2023 was $345 million, compared with $633 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.
• Gains on sales of loans, net, were $160 million in 2023, compared with $328 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. 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.
• Other income was $84 million in 2023, compared with $67 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.
•
•
For the year ended December 31, 2023, total operating expenses were $619 million, compared with $551 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.
In 2023, we recorded $66 million in impairment and amortization of acquired intangible assets, compared with
$8 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. The increase
52 SLM CORPORATION — 2023 Form 10-K
in amortization expense is related to our acquisition of several key assets of Scholly in the third quarter of 2023.
For additional information, see Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired
Intangible Assets” in this Form 10-K.
•
Income tax expense for the year ended December 31, 2023 was $197 million, compared with $162 million in the
year-ago period. The effective tax rate decreased in 2023 to 25.3 percent from 25.6 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.
Year Ended December 31, 2022 Compared with Year Ended December 31, 2021
For the year ended December 31, 2022, net income was $469 million, or $1.76 diluted earnings per common share,
compared with net income of $1.16 billion, or $3.61 diluted earnings per common share, for the year ended December 31,
2021. 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.
The primary contributors to each of the identified drivers of change in net income for 2022 compared with 2021 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. 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. “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 $328 million in 2022, compared with $548 million in 2021. 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.
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.
• Other income was $67 million in 2022, compared with $45 million in 2021. Other income in 2021 was negatively
affected by a $5 million reduction in the tax indemnification receivable related to uncertain tax positions and by a
$3 million loss from fees related to the redemption of $200 million of our 5.125 percent unsecured senior notes
2023 Form 10-K — SLM CORPORATION 53
•
•
•
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.
For the year ended December 31, 2022, total operating expenses were $551 million, compared with $519 million
in 2021. The increase in total operating expenses was primarily driven by transaction costs related to our
acquisition of Nitro, higher personnel costs, and initiative spending.
In 2022, we recorded $8 million in amortization of acquired intangible assets related to our acquisition of Nitro in
the first quarter of 2022. For additional information, see Notes to Consolidated Financial Statements, Note 10,
“Goodwill and Acquired Intangible Assets” in this Form 10-K.
Income tax expense for the year ended December 31, 2022 was $162 million, compared with $380 million in
2021. The effective tax rate increased in 2022 to 25.6 percent from 24.7 percent in 2021. 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
$
Interest reclassification
Gains on derivatives and hedging activities, net
$
— $
—
— $
(248) $
(23,216)
243
(5) $
23,360
144
The following table reflects adjustments associated with our derivative activities.
Years Ended December 31,
(dollars in thousands, except per share amounts)
Non-GAAP “Core Earnings” adjustments to GAAP:
2023
2022
2021
GAAP net income
Preferred stock dividends
$
581,391 $
469,014 $
1,160,513
17,705
9,029
4,736
GAAP net income attributable to SLM Corporation
common stock
$
563,686 $
459,985 $
1,155,777
Adjustments:
Net impact of derivative accounting(1)
Net tax expense(2)
Total non-GAAP “Core Earnings” adjustments to GAAP
Non-GAAP “Core Earnings” attributable to SLM
Corporation common stock
GAAP diluted earnings per common share
Derivative adjustments, net of tax
Non-GAAP “Core Earnings” diluted earnings per common
share
—
—
—
248
60
188
23,216
5,615
17,601
563,686 $
460,173 $
1,173,378
2.41 $
1.76 $
—
—
2.41 $
1.76 $
3.61
0.06
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.
2023 Form 10-K — SLM CORPORATION 55
Financial Condition
Average Balance Sheets - GAAP
The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities and
reflects our net interest margin on a consolidated basis.
Years ended December 31,
(dollars in thousands)
Average Assets
Private Education Loans
FFELP Loans
Credit Cards
Taxable securities
Cash and other short-term
investments
Total interest-earning assets
2023
2022
2021
Balance
Rate
Balance
Rate
Balance
Rate
$ 21,039,701
574,218
11,096
2,543,586
10.86 % $
7.19
14.02
2.00
20,576,737
662,194
28,547
2,509,215
9.14 % $
4.62
5.10
1.41
20,968,061
718,186
14,982
2,142,025
8.25 %
3.43
4.67
0.65
4,215,164
28,383,765
5.09
9.13 %
4,284,442
28,061,135
1.93
7.24 %
5,139,731
28,982,985
0.14
6.13 %
Non-interest-earning assets
301,749
605,447
636,691
Total assets
$ 28,685,514
$
28,666,582
$
29,619,676
Average Liabilities and Equity
Brokered deposits
Retail and other deposits
Other interest-bearing liabilities(1)
Total interest-bearing liabilities
$
9,803,802
11,605,215
3.29 % $
4.40
9,871,787
11,109,675
1.95 % $
1.65
11,015,170
10,540,170
1.35 %
0.70
5,366,365
3.66
5,517,489
3.03
5,390,098
2.94
26,775,382
3.85 %
26,498,951
2.05 %
26,945,438
1.42 %
Non-interest-bearing liabilities
Equity
Total liabilities and equity
83,895
1,826,237
$ 28,685,514
107,611
2,060,020
28,666,582
$
279,344
2,394,894
29,619,676
$
Net interest margin
5.50 %
5.31 %
4.81 %
(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
Rate/Volume Analysis - GAAP
The following rate/volume analysis shows the relative contribution of changes in interest rates and asset volumes.
Years Ended December 31,
(dollars in thousands)
Increase
(Decrease)
Change Due To(1)
Rate
Volume
2023 vs. 2022
Interest income
Interest expense
Net interest income
2022 vs. 2021
Interest income
Interest expense
Net interest income
$ 560,723 $ 537,107
487,291
481,570
$ 73,432 $ 56,165
$ 254,736 $ 312,781
167,154
160,721
$ 94,015 $ 139,455
$
$
$
$
23,616
5,721
17,267
(58,045)
(6,433)
(45,440)
(1) Changes in income and expense due to both rate and volume have been allocated in proportion to the relationship of
the absolute dollar amounts of the change in each. The changes in income and expense are calculated independently
for each line in the table. The totals for the rate and volume columns are not the sum of the individual lines.
Summary of Our Loans Held for Investment Portfolio
Ending Loans Held for Investment Balances, net
As of December 31, 2023
(dollars in thousands)
Total loan portfolio:
In-school(1)
Grace, repayment and other(2)
Total, gross
Private
Education
Loans
FFELP
Loans
Total Loans
Held for
Investment
$ 3,997,092
$
57
$ 3,997,149
17,028,752
537,344
17,566,096
21,025,844
537,401
21,563,245
Deferred origination costs and unamortized
premium/(discount)
Allowance for credit losses
81,554
(1,335,105)
1,330
(4,667)
82,884
(1,339,772)
Total loans held for investment portfolio, net
$ 19,772,293
$ 534,064
$ 20,306,357
% of total
97 %
3 %
100 %
(1)
(2)
Loans for customers still attending school and who are not yet required to make payments on the loans.
Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only
or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace
period (but, for purposes of the table, do not include those loans while they are in forbearance).
2023 Form 10-K — SLM CORPORATION 57
As of December 31, 2022
(dollars in thousands)
Total loan portfolio:
In-school(1)
Grace, repayment and other(2)
Total, gross
Private
Education
Loans
FFELP
Loans
Total Loans
Held for
Investment
$ 3,659,323
$
57
$ 3,659,380
16,644,365
608,993
17,253,358
20,303,688
609,050
20,912,738
Deferred origination costs and unamortized
premium/(discount)
Allowance for credit losses
69,656
(1,353,631)
1,549
(3,444)
71,205
(1,357,075)
Total loans held for investment portfolio, net
$ 19,019,713
$ 607,155
$ 19,626,868
% of total
97 %
3 %
100 %
(1)
(2)
Loans for customers still attending school and who are not yet required to make payments on the loans.
Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only
or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace
period (but, for purposes of the table, do not include those loans while they are in forbearance).
As of December 31, 2021
(dollars in thousands)
Total loan portfolio:
In-school(1)
Grace, repayment and other(2)
Total, gross
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total Loans
Held for
Investment
$ 3,544,030
$
82
$
—
$ 3,544,112
17,172,833
695,134
20,716,863
695,216
25,014
25,014
17,892,981
21,437,093
Deferred origination costs and unamortized
premium/(discount)
Allowance for credit losses
67,488
(1,158,977)
1,815
(4,077)
222
69,525
(2,281)
(1,165,335)
Total loans held for investment portfolio, net
$ 19,625,374
$ 692,954
$ 22,955
$ 20,341,283
% of total
(1)
(2)
97 %
3 %
— %
100 %
Loans for customers still attending school and who are not yet required to make payments on the loans.
Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only or fixed
payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for
purposes of the table, do not include those loans while they are in forbearance).
58 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2020
(dollars in thousands)
Total loan portfolio:
In-school(1)
Grace, repayment and other(2)(3)
Total, gross
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total Loans
Held for
Investment
$ 3,582,394
$
81
$
—
$ 3,582,475
16,146,943
737,512
19,729,337
737,593
12,238
12,238
16,896,693
20,479,168
Deferred origination costs and unamortized
premium/(discount)
Allowance for credit losses
63,475
(1,355,844)
1,993
(4,378)
230
65,698
(1,501)
(1,361,723)
Total loans held for investment portfolio, net
$ 18,436,968
$ 735,208
$ 10,967
$ 19,183,143
% of total
96 %
4 %
— %
100 %
(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 .”
(3) Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only or fixed payments,
as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table,
do not include those loans while they are in forbearance).
As of December 31, 2019
(dollars in thousands)
Total loan portfolio:
In-school(1)
Grace, repayment and other(2)
Total, gross
Deferred origination costs and unamortized
premium/(discount)
Allowance for credit losses
Private
Education
Loans
FFELP
Loans
Personal
Loans
Credit
Cards
Total Loans
Held for
Investment
$ 4,288,239
$
81
$
—
$
—
$ 4,288,320
18,901,352
783,225
1,049,007
23,189,591
783,306
1,049,007
3,884
3,884
20,737,468
25,025,788
81,224
(374,300)
2,143
(1,633)
513
(65,877)
36
(102)
83,916
(441,912)
Total loans held for investment portfolio, net
$ 22,896,515
$ 783,816
$ 983,643
$
3,818
$ 24,667,792
% of total
(1)
(2)
93 %
3 %
4 %
— %
100 %
Loans for customers still attending school and who are not yet required to make payments on the loans.
Includes loans in deferment or forbearance. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as
well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not
include those loans while they are in forbearance).
2023 Form 10-K — SLM CORPORATION 59
Average Loans Held for Investment Balances (net of unamortized premium/discount)
Years Ended December 31,
(dollars in thousands)
2023
2022
2021
Private Education Loans
$ 21,039,701
97 % $ 20,576,737
97 % $ 20,968,061
97 %
FFELP Loans
Credit Cards(1)
Total portfolio
574,218
—
3
—
662,194
—
3
—
718,186
14,982
3
—
$ 21,613,919
100 % $ 21,238,931
100 % $ 21,701,229
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
Year Ended December 31, 2023
(dollars in thousands)
Beginning balance
Acquisitions and originations:
Fixed-rate
Variable-rate
Total acquisitions and originations
Private
Education
Loans
FFELP
Loans
Total Loans
Held for
Investment, net
$
19,019,713 $ 607,155 $
19,626,868
5,760,434
665,987
6,426,421
—
—
—
Capitalized interest and deferred
origination cost premium amortization
Sales
597,480
(2,938,616)
22,584
—
Loan consolidations to third parties
Allowance
Repayments and other
Ending balance
(975,889)
18,526
(2,375,342)
19,772,293 $ 534,064 $
(32,855)
(1,223)
(61,597)
$
5,760,434
665,987
6,426,421
620,064
(2,938,616)
(1,008,744)
17,303
(2,436,939)
20,306,357
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total Loans
Held for
Investment, net
$
19,625,374 $ 692,954 $
22,955 $
20,341,283
4,189,269
1,809,301
5,998,570
—
—
—
—
82,819
82,819
550,474
(3,136,302)
24,642
—
(61,529)
633
—
(1,384,950)
(194,654)
—
(2,438,799)
19,019,713 $ 607,155 $
(49,545)
(195)
—
—
2,281
(28,905)
(78,955)
— $
4,189,269
1,892,120
6,081,389
574,921
(3,136,302)
(1,446,479)
(191,740)
(28,905)
(2,567,299)
19,626,868
Year Ended December 31, 2022
(dollars in thousands)
Beginning balance
Acquisitions and originations:
Fixed-rate
Variable-rate
Total acquisitions and originations
Capitalized interest and deferred
origination cost premium amortization
Sales
Loan consolidations to third parties
Allowance
Transfer to loans held-for-sale
Repayments and other
Ending balance
$
60 SLM CORPORATION — 2023 Form 10-K
Year Ended December 31, 2021
(dollars in thousands)
Beginning balance
Acquisitions and originations:
Fixed-rate
Variable-rate
Total acquisitions and originations
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total Loans
Held for
Investment, net
$
18,436,968 $ 735,208 $
10,967 $
19,183,143
3,027,440
2,421,082
5,448,522
—
—
—
—
63,323
63,323
Capitalized interest and deferred
origination cost premium amortization
Sales
Loan consolidations to third parties
Allowance
Transfer from loans held-for-sale
Repayments and other
Ending balance
$
597,416
(1,138,726)
27,252
—
(27,031)
300
—
(1,583,691)
196,868
25,040
(2,357,023)
19,625,374 $ 692,954 $
(42,775)
(323)
—
—
(780)
—
(50,232)
22,955 $
3,027,440
2,484,405
5,511,845
624,345
(1,138,726)
(1,610,722)
196,388
25,040
(2,450,030)
20,341,283
“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 balance of loans held for investment in full principal and interest
repayment status was affected in 2023 and 2022 by loan sales.
“Loan consolidations to third parties” for the year ended December 31, 2023 total 11.5 percent of our Private
Education Loans held for investment portfolio in full principal and interest repayment status at December 31, 2023, or
4.9 percent of our total Private Education Loans held for investment portfolio at December 31, 2023, compared with the
year-ago period of 16.2 percent of our Private Education Loan held for investment portfolio in full principal and interest
repayment status, or 7.3 percent of our total Private Education Loans held for investment portfolio, respectively. The
decrease in consolidations is attributable to higher interest rates in 2023 that made it less competitive for consolidators.
Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters
full principal and interest repayment status and then subsides over time.
The “Repayments and other” category includes all scheduled repayments, as well as voluntary prepayments, made
on loans in repayment (including loans in full principal and interest repayment status) and also includes charge-offs.
Consequently, this category can be significantly affected by the volume of loans in repayment.
2023 Form 10-K — SLM CORPORATION 61
Private Education Loan Originations
The following table summarizes our Private Education Loan originations. Originations represent loans that were
funded or acquired during the period presented.
Years Ended December 31,
(dollars in thousands)
Smart Option - interest only(1)
Smart Option - fixed pay(1)
Smart Option - deferred(1)
Graduate Loan(2)
Parent Loan(3)
Total Private Education Loan
originations
Percentage of loans with a
cosigner
Average FICO at approval(4)
2023
%
2022
%
2021
$ 1,166,442
18 % $ 1,146,365
19 % $ 1,128,176
2,121,112
2,584,545
511,193
38
33
41
8
—
1,950,048
2,330,719
516,877
30,515
33
39
8
1
1,685,519
1,996,461
525,050
87,325
%
21 %
31
36
10
2
$ 6,383,330
100 % $ 5,974,524
100 % $ 5,422,531
100 %
87.5 %
748
86.0 %
747
86.2 %
750
(1) Interest only, fixed pay and deferred describe the payment option while in school or in grace period. See Item 1. “Business - Our
Business - Private Education Loans” for a further discussion.
(2) For the year ended December 31, 2023, the Graduate Loan originations include $29.4 million of Smart Option Loans where the student was
in a graduate status. For the year ended December 31, 2022, the Graduate Loan originations include $1.8 million of Parent Loans and
$29.1 million of Smart Option Loans where the student was in a graduate status. For the year ended December 31, 2021, the Graduate
Loan originations include $5.8 million of Parent Loans and $24.4 million of Smart Option Loans where the student was in a graduate status.
(3) In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering
termination date were processed, and final disbursements under those loans occurred in February 2023.
(4) Represents the higher credit score of the cosigner or the borrower.
Private Education Loan Maturities
The following table summarizes the remaining maturities of our Private Education Loan portfolio.
As of December 31, 2023
(dollars in thousands)
Fixed-rate
Variable-rate
One year or
less
After one
year to five
years
After five
years to 15
years
After 15
years
Total
$
7,781 $
332,489 $ 7,197,507 $ 6,448,014 $ 13,985,791
23,535
620,602
4,602,806
1,793,110
7,040,053
Total Private Education Loans, gross
$
31,316 $
953,091 $ 11,800,313 $ 8,241,124 $ 21,025,844
62 SLM CORPORATION — 2023 Form 10-K
Allowance for Credit Losses
Allowance for Credit Losses Activity
Years Ended
December 31,
(dollars in thousands)
Beginning balance
Private
Education
Loans
FFELP
Loans
Total
Portfolio
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total
Portfolio
$ 1,353,631 $ 3,444 $ 1,357,075
$ 1,158,977 $
4,077 $ 2,281 $
1,165,335
Transfer from unfunded commitment liability(1)
320,237
—
320,237
344,310
—
—
344,310
2023
2022
Less:
Charge-offs
Plus:
Recoveries
Provisions for credit losses:
Provision, current period
Loan sale reduction to provision
Loans transferred (to) from held-for-sale
Total provisions for credit losses(2)
(420,095)
(1,001)
(421,096)
(427,416)
(613)
(3,215)
(431,244)
46,368
—
46,368
41,737
—
5
41,742
240,347
2,224
242,571
410,254
(20)
3,301
413,535
(205,383)
—
—
—
(205,383)
(174,231)
—
—
—
—
—
(174,231)
(2,372)
(2,372)
34,964
2,224
37,188
236,023
(20)
929
236,932
Ending balance
$ 1,335,105 $ 4,667 $ 1,339,772
$ 1,353,631 $
3,444 $
— $
1,357,075
(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)
Private Education Loan provisions for credit losses:
Provisions for loan losses
Provisions for unfunded loan commitments
Total Private Education Loan provisions for credit losses
Other impacts to the provisions for credit losses:
FFELP Loans
Credit Cards
Total
2023
2022
$
34,964
$
308,275
343,239
2,224
—
2,224
236,023
396,521
632,544
(20)
929
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)
Beginning balance
Day 1 adjustment for adoption of
CECL
2021
2020
Private
Education
Loans
FFELP
Loans
Credit
Cards
Total
Portfolio
Private
Education
Loans
FFELP
Loans
Personal
Loans
Credit
Cards
Total
Portfolio
$ 1,355,844 $
4,378 $ 1,501
$ 1,361,723
$ 374,300 $ 1,633 $ 65,877 $
102 $
441,912
—
—
—
—
1,060,830
2,852
79,183
188
1,143,053
Balance at January 1
1,355,844
4,378
1,501
1,361,723
1,435,130
4,485
145,060
290
1,584,965
Transfer from unfunded
commitment liability(1)
Less:
Charge-offs
Loan sales(2)
Plus:
Recoveries
Provisions for credit losses:
Provision, current period
Loan sale reduction to
provision
Loans transferred (to) from
held-for-sale
Total provisions for credit
losses(3)
301,655
—
—
301,655
320,808
—
—
—
320,808
(229,591)
(321)
(356)
(230,268)
(205,326)
(519)
(39,079)
(119)
(245,043)
—
29,494
(233,852)
(66,460)
1,887
(298,425)
—
—
20
—
—
20
—
12
—
—
—
(108,534)
—
(108,534)
29,506
24,021
—
4,984
2
29,007
1,124
(232,708)
148,673
412
40,485
1,328
190,898
—
—
(66,460)
(161,793)
—
(42,916)
1,887
(205,669)
—
—
—
—
(204,709)
(205,669)
1,124
(297,281)
(218,789)
412
(2,431)
1,328
(219,480)
Ending balance
$ 1,158,977 $
4,077 $ 2,281
$ 1,165,335
$ 1,355,844 $ 4,378 $
— $ 1,501 $ 1,361,723
(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) 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.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Years Ended December 31,
(dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses
Provisions for unfunded loan commitments
Total Private Education Loan provisions for credit losses
Other impacts to the provisions for credit losses:
Personal Loans
FFELP Loans
Credit Cards
Total
2021
2020
$
(298,425) $
(218,789)
264,324
(34,101)
—
20
1,124
1,144
312,613
93,824
(2,431)
412
1,328
(691)
93,133
Provisions for credit losses reported in consolidated statements of income
$
(32,957)
64 SLM CORPORATION — 2023 Form 10-K
Year Ended December 31,
(dollars in thousands)
Private
Education
Loans
FFELP
Loans
Personal
Loans
Credit
Cards
Total
Portfolio
Beginning balance
$
277,943 $
977 $
62,201 $
— $
341,121
2019
Less:
Charge-offs
Plus:
Recoveries
Total provisions for credit losses
(208,978)
(822)
(74,313)
(1)
(284,114)
25,765
279,570
—
1,478
5,206
72,783
—
103
30,971
353,934
Ending balance
$
374,300 $
1,633 $
65,877 $
102 $
441,912
Private Education Loan Allowance for Credit Losses
In establishing the allowance for Private Education Loan losses as of December 31, 2023, we considered several
factors with respect to our Private Education Loan held for investment portfolio, in particular, credit quality and
delinquency, forbearance, and charge-off trends.
Private Education Loans held for investment in full principal and interest repayment status were 43 percent of our
total Private Education Loans held for investment portfolio at December 31, 2023, compared with 45 percent at December
31, 2022.
For a more detailed discussion of our policy for determining the collectability of Private Education Loans and
maintaining our allowance for Private Education Loans, see “—Allowance for Credit Losses,” “— Critical Accounting
Policies and Estimates — Allowance for Credit Losses,” and Notes to Consolidated Financial Statements, Note 5, “Loans
Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-K.
2023 Form 10-K — SLM CORPORATION 65
The table below presents our Private Education Loans held for investment portfolio delinquency trends. Loans in
repayment include loans making interest only or fixed payments, as well as loans that have entered full principal and
interest repayment status after any applicable grace period (but, for purposes of the following table, do not include those
loans while they are in forbearance).
Private Education Loans Held for Investment
2023
Balance
%
$
5,291,991
324,039
2022
Balance
$ 4,895,053
279,085
%
2021
Balance
$ 4,904,414
301,237
%
As of December 31, (dollars in thousands)
Loans in-school/grace/deferment(1)
Loans in forbearance(2)
Loans in repayment and percentage of each
status:
Loans current
Loans delinquent 30-59 days(3)
Loans delinquent 60-89 days(3)
Loans 90 days or greater past due(3)
Total Private Education Loans in
repayment
Total Private Education Loans, gross
Private Education Loans deferred origination
costs and unamortized premium/(discount)
Total Private Education Loans
Private Education Loans allowance for losses
Private Education Loans, net
Percentage of Private Education Loans in
repayment
Delinquencies as a percentage of Private
Education Loans in repayment
Loans in forbearance as a percentage of
Private Education Loans in repayment and
forbearance
14,809,271
298,751
151,017
96.1 % 14,559,347
287,308
147,505
1.9
1.0
96.2 % 15,005,773
308,559
116,947
1.9
1.0
96.7 %
2.0
0.8
150,775
1.0
135,390
0.9
79,933
0.5
15,409,814
21,025,844
100.0 % 15,129,550
20,303,688
100.0 % 15,511,212
20,716,863
100.0 %
81,554
21,107,398
(1,335,105)
$ 19,772,293
69,656
20,373,344
(1,353,631)
$ 19,019,713
67,488
20,784,351
(1,158,977)
$ 19,625,374
73.3 %
74.5 %
74.9 %
3.9 %
3.8 %
2.1 %
1.8 %
3.3 %
1.9 %
(1)
(2)
(3)
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).
Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments
due to hardship or other factors, consistent with established loan program servicing policies and procedures.
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.
Years Ended December 31,
(dollars in thousands)
Beginning balance
Day 1 adjustment for adoption of CECL
Balance at January 1
Transfer from unfunded commitment liability(1)
Provision for credit losses:
Provision, current period
Loan sale reduction to provision
Loans transferred (to) from held-for-sale
Total provision
Net charge-offs:
Charge-offs
Recoveries
Net charge-offs
Ending Balance
Allowance as a percentage of the ending total
loan balance and accrued interest to be
capitalized(2)
Allowance as a percentage of the ending loans
in repayment and accrued interest to be
capitalized on loans in repayment(2)(3)(4)
Allowance coverage of net charge-offs
Net charge-offs as a percentage of average
loans in repayment(3)
Delinquencies as a percentage of ending loans
in repayment(3)
Loans in forbearance as a percentage of ending
loans in repayment and forbearance(3)
Ending total loans, gross
Average loans in repayment(3)
Ending loans in repayment(3)
Accrued interest to be capitalized(2)
Accrued interest to be capitalized on loans in
repayment(2)(4)
2023
2022
2021
2020
2019
$ 1,353,631
$ 1,158,977
$
1,355,844
$
374,300
$
277,943
—
1,353,631
320,237
—
1,158,977
344,310
—
1,355,844
301,655
1,060,830
1,435,130
320,808
240,347
(205,383)
—
34,964
(420,095)
46,368
(373,727)
410,254
(174,231)
—
236,023
(427,416)
41,737
(385,679)
(233,852)
(66,460)
1,887
(298,425)
(229,591)
29,494
(200,097)
148,673
(161,793)
(205,669)
(218,789)
(205,326)
24,021
(181,305)
—
277,943
—
279,570
—
—
279,570
(208,978)
25,765
(183,213)
$ 1,335,105
$ 1,353,631
$
1,158,977
$ 1,355,844
$
374,300
6.01 %
6.37 %
5.35 %
6.55 %
— %
8.43 %
3.57
8.76 %
3.51
7.32 %
5.79
9.28 %
7.48
— %
2.04
2.44 %
2.55 %
1.33 %
1.17 %
1.17 %
3.90 %
3.77 %
3.26 %
2.84 %
2.81 %
2.06 %
1.81 %
1.91 %
4.32 %
4.08 %
$ 21,025,844
$ 20,303,688
$ 20,716,863
$ 19,729,337
$ 23,189,591
$ 15,310,934
$ 15,103,123
$ 15,019,869
$ 15,518,851
$ 15,605,927
$ 15,409,814
$ 15,129,550
$ 15,511,212
$ 14,304,821
$ 16,787,670
$ 1,203,357
$
435,807
$
$
936,837
324,384
$
$
947,391
312,537
$
$
973,201
308,655
$
$
—
—
(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) 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.
(3)
Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest
repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(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; 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
2023 Form 10-K — SLM CORPORATION 67
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.
Forbearance allows a borrower to not make scheduled payments for a specified period of time. Using forbearance
extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the
total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is
capitalized (added to principal) at the end of the forbearance. 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. 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. 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. 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.
Delinquency Trends by Active Repayment Status
The tables below show the composition and status of the Private Education Loan portfolio held for investment aged
by number of months in active repayment status (months for which a scheduled monthly payment was due). Active
repayment status includes loans on which borrowers are making interest only or fixed payments, as well as loans that
have entered full principal and interest repayment status after any applicable grace period. Our experience shows that the
percentage of loans in forbearance status generally decreases the longer the loans have been in active repayment status.
At December 31, 2023, for Private Education Loans (held for investment) that have been in active repayment status for
fewer than 25 months, loans in forbearance status as a percentage of loans in repayment and forbearance were
1.6 percent. Approximately 76 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, 2023
(dollars in millions)
Loans in-school/grace/deferment
Loans in forbearance
Loans in repayment - current
Loans in repayment - delinquent
30-59 days
Loans in repayment - delinquent
60-89 days
Loans in repayment - 90 days or
greater past due
Total
Deferred origination costs and
unamortized premium/(discount)
Allowance for credit losses
Total Private Education Loans,
net
Loans in forbearance as a
percentage of total Private
Education Loans in repayment
and forbearance
As of December 31, 2022
(dollars in millions)
Loans in-school/grace/deferment
Loans in forbearance
Loans in repayment - current
Loans in repayment - delinquent
30-59 days
Loans in repayment - delinquent
60-89 days
Loans in repayment - 90 days or
greater past due
Total
Deferred origination costs and
unamortized premium/(discount)
Allowance for credit losses
Total Private Education Loans,
net
Loans in forbearance as a
percentage of total Private
Education Loans in repayment
and forbearance
Private Education Loans Held for Investment
Aged by Number of Months in Active Repayment Status
0 to 12
$ —
190
4,129
13 to 24
$ —
55
3,529
25 to 36
$ —
31
2,183
37 to 48
$ —
20
1,472
More than
48
$ —
28
3,496
Not Yet in
Repayment
$ 5,292
—
—
$
Total
5,292
324
14,809
81
40
56
29
45
24
33
17
84
41
—
—
42
$ 4,482
28
$ 3,697
23
$ 2,306
16
$ 1,558
42
$ 3,691
—
$ 5,292
299
151
151
21,026
81
(1,335)
$ 19,772
1.21 %
0.35 %
0.20 %
0.13 %
0.18 %
— %
2.06 %
Private Education Loans Held for Investment
Aged by Number of Months in Active Repayment Status
0 to 12
$ —
165
4,131
13 to 24
$ —
43
3,393
25 to 36
$ —
26
2,129
37 to 48
$ —
19
1,603
More than
48
$ —
26
3,303
Not Yet in
Repayment
$ 4,895
—
—
$
Total
4,895
279
14,559
80
43
58
30
44
20
31
17
74
38
—
—
41
$ 4,460
27
$ 3,551
20
$ 2,239
14
$ 1,684
34
$ 3,475
—
$ 4,895
287
148
136
20,304
70
(1,354)
$ 19,020
1.07 %
0.28 %
0.17 %
0.12 %
0.17 %
— %
1.81 %
70 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2021
(dollars in millions)
Loans in-school/grace/deferment
Loans in forbearance
Loans in repayment - current
Loans in repayment - delinquent
30-59 days
Loans in repayment - delinquent
60-89 days
Loans in repayment - 90 days or
greater past due
Total
Deferred origination costs and
unamortized premium/(discount)
Allowance for credit losses
Total Private Education Loans,
net
Loans in forbearance as a
percentage of total Private
Education Loans in repayment
and forbearance
Private Education Loans Held for Investment
Aged by Number of Months in Active Repayment Status
0 to 12
$ —
180
4,234
13 to 24
$ —
44
3,405
25 to 36
$ —
30
2,424
37 to 48
$ —
21
1,671
More than
48
$ —
26
3,272
Not Yet in
Repayment
$ 4,904
—
—
$
Total
4,904
301
15,006
125
38
54
25
41
17
29
13
60
24
—
—
26
$ 4,603
18
$ 3,546
12
$ 2,524
9
$ 1,743
15
$ 3,397
—
$ 4,904
309
117
80
20,717
67
(1,159)
$ 19,625
1.14 %
0.28 %
0.20 %
0.13 %
0.16 %
— %
1.91 %
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, 2023 and 2022.
As of December 31, 2023
(dollars in thousands)
$ in repayment(3)
$ in total
As of December 31, 2022
(dollars in thousands)
$ in repayment(3)
$ in total
$
$
$
$
Signature
and
Other
Parent
Loan(1)
Smart Option
Career
Training(2)
Graduate
Loan
Total
211,123 $
206,343 $ 13,747,153 $
2,066 $ 1,243,129 $ 15,409,814
301,265 $
207,448 $ 18,764,200 $
2,117 $ 1,750,814 $ 21,025,844
Signature
and
Other
Parent
Loan(1)
Smart Option
Career
Training(2)
Graduate
Loan
Total
216,513 $
261,316 $ 13,599,750 $
4,565 $ 1,047,406 $ 15,129,550
308,884 $
262,602 $ 18,218,925 $
4,602 $ 1,508,675 $ 20,303,688
(1)
In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination
date continued to be processed, and final disbursements under those loans occurred in February 2023.
(2) In May 2022, we discontinued offering our Career Training loan product. Applications for those loans received before the offering termination
date continued to be processed, and final disbursements under those loans occurred in September 2023.
(3)
Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full
principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they
are in forbearance).
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 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.
(dollars in thousands)
December 31, 2023
December 31, 2022
December 31, 2021
December 31, 2020
December 31, 2019
Private Education Loans
Accrued Interest Receivable
Total Interest
Receivable
$ 1,354,565 $
$ 1,177,562 $
$ 1,187,123 $
$ 1,168,895 $
$ 1,366,158 $
90 Days or
Greater
Past Due
Allowance for
Uncollectible
Interest(1)
8,373 $
6,609 $
3,635 $
4,354 $
2,390 $
9,897
8,121
4,937
4,467
5,309
(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
Liquidity and Capital Resources
Funding and Liquidity Risk Management
Our primary liquidity needs include our ongoing ability to fund our businesses throughout market cycles, including
during periods of financial stress, our ongoing ability to fund originations of Private Education Loans, and our ability to
meet any outflows of our Bank deposits. To achieve these objectives, we analyze and monitor our liquidity needs, and
maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt
primarily through asset-backed securitizations, other financing facilities, and loan sales.
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, 2023 and December 31, 2022, our sources of liquidity included liquid investments with unrealized
losses of $128.9 million and $184.5 million, respectively. It is our policy to manage operations so liquidity needs are fully
satisfied through normal operations to avoid unplanned loan or liquid investment sales under all but the most dire
emergency conditions. Our liquidity management is governed by policies approved by our Board of Directors. Oversight of
these policies is performed in the Asset and Liability Committee, a management-level committee.
These policies take into account the volatility of cash flow forecasts, expected asset and liability maturities,
anticipated loan demand, and a variety of other factors to establish minimum liquidity guidelines.
Key risks associated with our liquidity relate to our ability to access the capital markets and the markets for bank
deposits at reasonable rates. This ability may be affected by our performance, competitive pressures, the macroeconomic
environment, and the impact they have on the availability of funding sources in the marketplace. We target maintaining
sufficient on-balance sheet and contingent sources of liquidity to enable us to meet all contractual and contingent
obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test
the resiliency of our balance sheet. 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. Due
to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.
Sources of Liquidity and Available Capacity
Ending Balances
As of December 31,
(dollars in thousands)
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank
subsidiaries
Sallie Mae Bank(1)
Available-for-sale investments
Total unrestricted cash and liquid investments
2023
2022
2021
$
— $
3,224 $
2,588
4,332,015
4,617,533
2,325,711
2,012,901
$ 6,138,133 $ 6,630,434 $ 6,660,314
4,146,614
1,988,295
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
2023 Form 10-K — SLM CORPORATION 73
Average Balances
Years Ended December 31,
(dollars in thousands)
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank
subsidiaries
Sallie Mae Bank(1)
Available-for-sale investments
Total unrestricted cash and liquid investments
2023
2022
2021
$
6,827 $
7,954 $
4,014,444
1,975,754
$ 5,997,025 $
4,080,312
2,230,118
6,318,384 $
3,739
4,934,506
1,953,154
6,891,399
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
Deposits
The following table summarizes total deposits.
As of December 31,
(dollars in thousands)
Deposits - interest bearing
Deposits - non-interest bearing
Total deposits
$
$
2022
2023
21,651,657 $ 21,446,647
1,424
21,653,188 $ 21,448,071
1,531
Our total deposits of $21.7 billion were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and
other deposits at December 31, 2023, compared with total deposits of $21.4 billion, which were comprised of $9.9 billion
in brokered deposits and $11.5 billion in retail and other deposits, at December 31, 2022.
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 also include
deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be
core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented
$7.6 billion of our deposit total as of December 31, 2023, compared with $8.0 billion at December 31, 2022.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered
CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense
of $12 million, $13 million, and $16 million in the years ended December 31, 2023, 2022, and 2021, respectively. Fees
paid to third-party brokers related to brokered CDs were $8 million, $13 million, and $13 million during the years ended
December 31, 2023, 2022, and 2021, respectively.
Interest bearing deposits at December 31, 2023 and 2022 are summarized as follows:
As of December 31,
(dollars in thousands)
Money market
Savings
Certificates of deposit
Deposits - interest bearing
2023
2022
Year-End
Weighted
Average
Stated Rate(1)
Amount
Amount
Year-End
Weighted
Average
Stated Rate(1)
$ 10,258,292
4.85 % $ 10,977,242
3.75 %
945,000
10,448,365
$ 21,651,657
4.35
3.69
982,586
9,486,819
$ 21,446,647
3.15
2.57
(1) Includes the effect of interest rate swaps in effective hedge relationships.
74 SLM CORPORATION — 2023 Form 10-K
As of December 31, 2023 and 2022, there were $478 million and $615 million, respectively, of deposits exceeding
FDIC insurance limits. Accrued interest on deposits was $91 million and $59 million at December 31, 2023 and 2022,
respectively.
Counterparty Exposure
Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative
counterparty will not be able to meet its obligations to us.
Excess cash is generally invested with the Federal Reserve Bank of San Francisco (the “FRB”) on an overnight
basis or in the FRB’s Term Deposit Facility, minimizing counterparty exposure on cash balances.
Our investment portfolio is primarily comprised of a small portfolio of mortgage-backed securities issued by
government agencies and government-sponsored enterprises that are purchased to meet CRA targets. Additionally, our
investing activity is governed by Board-approved limits on the amount that is allowed to be invested with any one issuer
based on the credit rating of the issuer, further minimizing our counterparty exposure. Counterparty credit risk is
considered when valuing investments and considering impairment.
Related to derivative transactions, protection against counterparty risk is generally provided by International Swaps
and Derivatives Association, Inc. Credit Support Annexes (“CSAs”), or clearinghouses for over-the-counter derivatives.
CSAs require a counterparty to post collateral if a potential default would expose the other party to a loss. 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.
Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be
submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are
the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for
as legal settlement. As of 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.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts
as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin
included as settlement as of December 31, 2023 was $(40) million and $(4) million for the CME and LCH, respectively.
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. 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.
We have liquidity exposure related to collateral movements between us and our derivative counterparties.
Movements in the value of the derivatives, which are primarily affected by changes in interest rates, may require us to
return cash collateral held or may require us to access primary liquidity to post collateral to counterparties.
The table below highlights exposure related to our derivative counterparties as of December 31, 2023.
As of December 31, 2023
(dollars in thousands)
Total exposure, net of collateral
Exposure to counterparties with credit ratings, net of
collateral
Percent of exposure to counterparties with credit ratings
below S&P AA- or Moody’s Aa3
Percent of exposure to counterparties with credit ratings
below S&P A- or Moody’s A3
$
$
SLM Corporation
and Sallie Mae Bank
Contracts
8,858
8,858
— %
— %
2023 Form 10-K — SLM CORPORATION 75
Regulatory Capital
The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions
by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and
financial position. Under U.S. Basel III and the regulatory framework for prompt corrective action, the Bank must meet
specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt
corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk
weightings, and other factors.
Capital Management
The Bank intends to maintain at all times regulatory capital levels that meet both the minimum levels required under
U.S. Basel III (including applicable buffers) and the levels necessary to be considered “well capitalized” under the FDIC’s
prompt corrective action framework, in order to support asset growth and operating needs, address unexpected credit
risks, and protect the interests of depositors and the DIF administered by the FDIC. The Bank’s Capital Policy requires
management to monitor these capital standards and the Bank’s compliance with them. The Board of Directors and
management periodically evaluate the quality of assets, the stability of earnings, and the adequacy of the allowance for
credit losses for the Bank. The Company is a source of strength for the Bank and will provide additional capital if
necessary.
We believe that current and projected capital levels are appropriate for 2024. As of December 31, 2023, the Bank’s
risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully
phased-in U.S. Basel III standards as well as the “well capitalized” standards under the prompt corrective action
framework.
Under U.S. Basel III, the Bank is required to maintain the following minimum regulatory capital ratios: a Common
Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based
capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity
Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the
Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to
executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in
order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-
based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the
Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital
ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least
5.0 percent.
In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel III
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. The proposed rule therefore would not
affect the Bank’s capital requirements or the calculation of its capital ratios.
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted
CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the
following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank
elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on
January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for
credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes
(collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. 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. 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
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.
At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory
capital purposes are as follows:
Adjusted
Transition
Amounts
Phase-In
Amounts for the
Year Ended
Phase-In
Amounts for the
Year Ended
Remaining
Adjusted
Transition
Amounts to be
Phased-In
(Dollars in thousands)
December 31, 2021
December 31, 2022
December 31, 2023
December 31, 2023
Retained earnings
Allowance for credit
losses
Liability for unfunded
commitments
Deferred tax asset
$
836,351 $
(209,088) $
(209,088) $
418,175
1,038,145
(259,536)
(259,536)
519,073
104,377
306,171
(26,094)
(76,542)
(26,094)
(76,542)
52,189
153,087
The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following
table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as
indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale
investments and swap valuations from Common Equity Tier 1 Capital. At December 31, 2023 and December 31, 2022, the
unrealized loss on available-for-sale investments included in other comprehensive income totaled $115 million and
$160 million, net of tax of $37 million and $52 million, respectively. The capital ratios would remain above the U.S. Basel
III well capitalized thresholds if the unrealized loss became fully recognized into capital.
(Dollars in thousands)
As of December 31, 2023(3):
Common Equity Tier 1 Capital (to Risk-Weighted
Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Total Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
As of December 31, 2022(3):
Common Equity Tier 1 Capital (to Risk-Weighted
Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Total Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
Actual
U.S. Basel III
Minimum Requirements
Plus Buffer(1)(2)
Amount
Ratio
Amount
Ratio
$ 3,019,973
12.3 %
$ 1,719,621 >
$ 3,019,973
12.3 %
$ 2,088,111 >
$ 3,334,140
13.6 %
$ 2,579,432 >
$ 3,019,973
10.2 %
$ 1,184,213 >
7.0 %
8.5 %
10.5 %
4.0 %
$ 3,040,662
12.9 %
$ 1,645,807 >
$ 3,040,662
12.9 %
$ 1,998,480 >
7.0 %
8.5 %
$ 3,338,645
14.2 %
$ 2,468,711 >
10.5 %
$ 3,040,662
10.3 %
$ 1,185,280 >
4.0 %
(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.
(2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well
capitalized” under the prompt corrective action framework.
(3) For December 31, 2023 and 2022, the actual amounts and the actual ratios include the respective adjusted
transition amounts discussed above that were phased in at the beginning of 2023 and 2022.
2023 Form 10-K — SLM CORPORATION 77
Dividends
The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under
Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits
without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired.
The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends
and other payments and consummate share repurchases, as described herein. The Bank declared $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. “Risk
Factors — General Risks” for possible limitations on the payments of our dividends.
Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program
and our Secured Borrowing Facility. The issuing entities for those secured borrowings are variable interest entities and are
consolidated for accounting purposes. The following table summarizes our secured borrowings at December 31, 2023 and
2022. For additional information, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in this Form 10-
K.
As of December 31,
(dollars in thousands)
Unsecured borrowings:
2023
2022
Short-Term
Long-Term
Total
Short-Term
Long-Term
Total
Unsecured debt (fixed-rate)
$
— $
992,200 $
992,200 $
— $
988,986 $
988,986
Total unsecured borrowings
—
992,200
992,200
—
988,986
988,986
Secured borrowings:
Private Education Loan term
securitizations:
Fixed-rate
Variable-rate
Total Private Education Loan term
securitizations
Secured Borrowing Facility
—
—
—
—
3,585,254
3,585,254
650,058
650,058
4,235,312
4,235,312
—
—
—
—
—
—
3,462,363
3,462,363
783,765
783,765
4,246,128
4,246,128
—
—
Total secured borrowings
—
4,235,312
4,235,312
—
4,246,128
4,246,128
Total
$
— $ 5,227,512 $ 5,227,512 $
— $ 5,235,114 $ 5,235,114
Short-term Borrowings
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. 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); 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.
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. At December 31, 2023, the outstanding balance was $497 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. At December 31, 2023, the outstanding balance was $495 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.
Pre-2022 Transactions
Prior to 2022, we executed a total of $9.81 billion in ABS transactions that were accounted for as secured financings.
At December 31, 2023, $4.02 billion of our Private Education Loans, including $3.90 billion of principal and $128 million in
capitalized interest, were encumbered as a result of these transactions.
Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which
totaled $125 million at December 31, 2023. The interest rate we are charged on these lines of credit is priced at Fed
Funds plus a spread at the time of borrowing, and is payable daily. We did not utilize these lines of credit in the years
ended December 31, 2023 and 2022.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing
facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available
to depository institutions that are in generally sound financial condition. 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. Generally, collateral value is assigned based on
the estimated fair value of the pledged assets. At December 31, 2023 and December 31, 2022, the value of our pledged
collateral at the FRB was $1.6 billion and $2.2 billion, respectively. The interest rate charged to us is the discount rate set
by the FRB. We did not utilize this facility in the years ended December 31, 2023 and 2022.
2023 Form 10-K — SLM CORPORATION 79
Contractual Loan Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the
borrowing for the entire academic year. 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). At December 31, 2023, we had $2.2 billion of outstanding contractual loan
commitments which we expect to fund during the remainder of the 2023/2024 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.
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. 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.
Common Stock
Our shareholders have authorized the issuance of 1.125 billion shares of common stock (par value of $0.20). At
December 31, 2023, 220 million shares were issued and outstanding and 36 million shares were unissued but
encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend
equivalent units for employee compensation and remaining authority for stock-based compensation plans. See Notes to
Consolidated Financial Statements, Note 14, “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; and
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.
2023 Form 10-K — SLM CORPORATION 81
Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our
consolidated financial statements, which have been prepared in accordance with GAAP. Notes to Consolidated Financial
Statements, Note 2, “Significant Accounting Policies” in this Form 10-K includes a summary of the significant accounting
policies and methods used in the preparation of our consolidated financial statements. The preparation of these financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the reported amounts of income and expenses during the reporting periods. Actual results may differ from
these estimates under varying assumptions or conditions. On a quarterly basis, management evaluates its estimates,
particularly those that include the most difficult, subjective, or complex judgments and are often about matters that are
inherently uncertain. The most significant judgments, estimates, and assumptions relate to the following critical accounting
policies that are discussed in more detail below.
Allowance for Credit Losses
Allowance for Credit Losses
We maintain an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well
as for future loan commitments, at the reporting date.
In determining the lifetime expected credit losses on our Private Education Loan portfolio loan segments, we use a
discounted cash flow method. 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. These cash flows are discounted at the loan’s effective interest
rate to calculate the present value of those cash flows. Management adjusts the effective interest rate used to discount
expected cash flows to incorporate expected prepayments. The difference between the present value of those cash flows
and the amortized cost basis of the underlying loans is the allowance for credit losses. Entities that measure credit losses
based on the present value of expected future cash flows are permitted to report the entire change in present value as
credit loss expense, but may alternatively report the change in present value due to the passage of time as interest
income. 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. 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). We also
develop an adverse and favorable economic scenario. At each reporting date, we determine the appropriate weighting of
these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes.
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.
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
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. These include, but are not limited to, CECL model inputs and any
overlays deemed necessary by management. The most impactful CECL model inputs include:
• Economic forecasts;
• Weighting of economic forecasts;
• Prepayment speeds; and
• 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.
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. 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.
2023 Form 10-K — SLM CORPORATION 83
A 100-basis point increase or decrease in the following inputs to the CECL loss model is estimated to change the
allowance as follows:
Estimated Increase (Decrease) to the
Allowance for Credit Losses(1)
(Dollars in millions)
+100 Basis Points
-100 Basis Points
College graduate unemployment rate(2)
Prepayment speeds(2)
Recovery rates(3)
$
62,135 $
(85,010)
(16,453)
(17,402)
16,528
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. During the third quarter of 2022, we reclassified our Credit Card
loan portfolio to loans held-for-sale and subsequently sold the Credit Card portfolio to a third party in May 2023.
Allowance for Private Education Loan Losses
In addition to the key assumptions/estimates described above, some estimates are unique to our Private Education
Loan portfolio. Estimates are made on our Private Education Loans regarding when each borrower will separate from
school. The cash flow timing of when a borrower will begin making full principal and interest payments is dependent upon
when the student either graduates or leaves school. These dates can change based upon many factors. We receive
information regarding projected graduation dates from a third-party clearinghouse. The separation from school date is
updated quarterly based on updated information received from the clearinghouse.
Additionally, when we have a contractual obligation to fund a loan or a portion of a loan at a later date, we make an
estimate regarding the percentage of this obligation that will be funded. This estimate is based on historical experience.
For unfunded commitments, we recognize the related life of loan allowance as a liability. Once the loan is funded, that
liability transfers to the allowance for Private Education Loan losses.
Key Credit Quality Indicators - Private Education Loans
We determine the collectability of our Private Education Loan portfolio by evaluating certain risk characteristics. We
consider credit score at original approval and periodically refreshed/updated credit scores through the loan’s term,
existence of a cosigner, loan status, and loan seasoning as the key credit quality indicators because they have the most
significant effect on the determination of the adequacy of our allowance for credit losses. Credit scores are an indicator of
the creditworthiness of borrowers, and the higher the credit scores the more likely it is the borrowers will be able to make
all of their contractual payments. Loan status affects the credit risk because a past due loan is more likely to result in a
credit loss than a current loan. Additionally, loans in the deferred payment status have different credit risk profiles
compared with those in current pay status. 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. The
84 SLM CORPORATION — 2023 Form 10-K
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.
In the second quarter of 2023, we changed how we collect on defaulted loans. 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. This improved
our estimate of recovery rates for the year ended December 31, 2023. When we estimate the timing and amount of future
recoveries on charged-off loans, we no longer include expectations of future sales on retained defaulted loans. We
continue to monitor how we collect on defaulted loans and may modify the approach from time to time based on
performance, industry conventions, and/or regulatory feedback.
For December 31, 2022, we used both an estimate of recovery rates from in-house collections as well as
expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off
loans.
Private Education Loans generally do not require borrowers to begin principal and interest repayment until at least
six months after the borrowers have graduated or otherwise separated from school. Consequently, the loss estimates for
these loans are generally low while the borrower is in school and then increase upon the end of the grace period after
separation from school. At December 31, 2023 and 2022, 25 percent and 24 percent, respectively, of the principal balance
of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or
other deferment status and not required to make payments.
Our collection policies for Private Education Loans allow for periods of nonpayment (forbearance) for certain
borrowers requesting an extended grace period upon leaving school or experiencing temporary difficulty meeting payment
obligations.
As part of concluding on the adequacy of the allowance for credit losses for Private Education Loans, we review key
allowance and loan metrics. 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; 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.
ASU No. 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.
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
2023 Form 10-K — SLM CORPORATION 85
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
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the
borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such
approval, but instead have a commitment to fund a portion of the loan at a later date (usually the start of the second
semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are
exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by
us. The discounted cash flow approach described above includes expected future contractual disbursements. The portion
of the allowance for credit losses related to future disbursements is shown as a liability on the face of the balance sheet,
and related provision for credit losses is reflected on the income statement.
Uncollectible Interest
The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued
interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the
borrower makes a $25 monthly payment that is smaller than the interest accrued on the loan in that month. 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. This amount is recorded as a reduction of interest income. Accrued interest receivable is
separately disclosed on the face of the balance sheet.
Allowance for FFELP Loan Losses
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
Risk Management
Our Approach
Risk is inherent in our business activities and the specialized lending industry we serve. The ability of management
to identify, manage, and remediate risk in a timely manner is critical to our continued success. Our risk management
framework is designed to assess, manage, and report these risks and escalate as appropriate to the Board of Directors or
its designee.
Risk Oversight
Our Board of Directors oversees our overall strategic direction, including our risk management capability and
effectiveness. 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. The Board of Directors oversees the continued development of the risk management
framework.
The Governance Framework
Our overall objective is to ensure all significant risks inherent in our business can be identified and appropriately
mitigated. To this end, we have adopted the “three lines of defense” approach to governance. Specifically, the business
units form the “first line of defense” and are the “owners” of risks in their business activities. As the risk owner, the first line
of defense is accountable for the day-to-day execution of risk and control policies and procedures (including activities
performed by third-party contractors). The “second line of defense” is our Risk Management function, which is
independent from the first line of defense. The second line of defense conducts oversight and effective challenge of the
risk-taking activities within the first line of defense. Finally, the Internal Audit function comprises the “third line of defense.”
The Internal Audit function provides opinions to the Board of Directors on the effectiveness of the first and second lines of
defense, as reflected in audit reports.
Risk Management Policy and Risk Appetite Standard
The Risk Management Policy and Risk Appetite Standard are designed to establish a stable risk and control
environment across the enterprise. The policy, which is approved by the Board of Directors, outlines the framework used
to ensure that risk and control issues across the enterprise are identified, assessed, measured, monitored, and reported.
The Risk Management Policy, the Risk Appetite Standard, and the related policies and procedures constitute the core of
the risk management program.
Sallie Mae leverages risk appetite to outline the level of risk we are willing to accept within each risk category, as
described below, in pursuit of our business objectives. 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.
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.
•
Financial Risk Committee. The Financial Risk Committee assists the Board of Directors in fulfilling its risk
management oversight responsibilities with regard to the Company’s major financial risks, including credit risk,
market risk, and liquidity risk. The Financial Risk Committee, along with the Operational and Compliance Risk
Committee, provides oversight of the development, maintenance, and monitoring of the Company’s risk
management framework, risk governance structure, and risk appetite statements, metrics, and associated limits
and thresholds, and the promotion of our risk management culture. The Financial Risk Committee receives
periodic updates on compliance with the framework from the Chief Risk Officer.
• Operational and Compliance Risk Committee. 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. The
2023 Form 10-K — SLM CORPORATION 87
Operational and Compliance Risk Committee receives periodic updates on compliance with the framework from
the Chief Risk Officer.
Audit Committee. The Audit Committee is responsible for oversight of the quality and integrity of our financial
statements, accounting and reporting processes, the performance of the Internal Audit function, and the
qualifications, hiring, performance, and independence of our independent registered public accounting firm.
Nominations and Governance Committee. 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.
Preferred Stock Committee. The Preferred Stock Committee monitors and evaluates proposed actions that may
impact the rights of holders of our preferred stock.
•
•
•
•
Management-Level Committee Structure
Executive Committee. The EC is authorized by the Board of Directors to assist the CEO in the general supervision of
the business of the Company. Specifically, the EC will (i) provide to the CEO advice and counsel, subject matter expertise,
and recommendations as requested, and (ii) through its subcommittees, facilitate the evaluation and decision-making on
routine cross-functional matters, and assist management in the fulfillment of management’s duties related to specific risks.
The EC has established the following sub-committees to assist in fulfilling its duties.
•
•
Enterprise Risk Committee (“ERC”). The ERC provides independent oversight and monitoring of the risk and
control environment. The ERC is jointly accountable to the Financial Risk Committee and the Operational and
Compliance Risk Committee of the Board of Directors and provides for escalation accordingly.
Credit Committee. The Credit Committee is responsible for credit and counterparty risk, product pricing, and credit
and collections operations.
• Operational and Compliance Risk Committee. The OCRC is the oversight body for the identification, assessment,
remediation, measurement, and reporting of operational and compliance risks.
•
•
Asset and Liability Committee (“ALCO”). ALCO is responsible for the strategy, processes, and authorities with
which the Bank’s interest rate risk, liquidity, and capital adequacy are managed.
Policy Management Committee (“PMC”) The PMC is responsible for the effective and efficient administration of
the Company’s policies, standards, and procedures.
Each of these sub-committees is comprised of subject matter experts from the senior management team and is
accountable to the EC. Moreover, these sub-committees may be supported by steering or working groups, as appropriate.
Disclosure Committee. Our Disclosure Committee assists our CEO and Chief Financial Officer in their review of
periodic SEC reporting documents, earnings releases, investor materials, and related disclosure policies and procedures.
Internal Audit
Internal Audit provides independent assurance to the Audit Committee of the Board of Directors as to the adequacy
and effectiveness of our risk management, control, and governance processes. Internal Audit also assists management by
providing objective assurance, credible challenge, and consulting services around matters involving risk management.
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
Risk Categories
Risk categories are a foundational element of the risk management framework; they are widely used in risk
identification and provide the basis for risk aggregation and reporting. The Company has identified six major risk
categories:
Strategic Risk. Strategic risk is the risk of: adverse impacts to enterprise value, current or anticipated earnings,
capital, or franchise value arising from the Company’s competitive and market position and evolving forces in the industry
that can affect that position; lack of responsiveness to these conditions; strategic decisions to change the Company’s
scale, market position, or operating model; or failure to appropriately consider implementation risks inherent in the
Company’s strategy.
The overall development of the Company’s strategic plan includes extensive engagement with the Board of
Directors. Similarly, the Board of Directors provides oversight and effective challenge on performance relative to the
strategic plan.
Credit Risk. Credit risk is the risk of adverse impacts to earnings, capital, or reputation resulting from obligors’ failure,
or the increased probability thereof, to meet the terms of a lending, issuer, or counterparty agreement. Credit risk is found
in all activities where success depends on counterparty, issuer, or borrower performance.
The credit risk related to Private Education Loans is managed within a credit risk infrastructure that includes: (i) a
well-defined underwriting, asset quality, and collection policy framework; (ii) an ongoing monitoring and review process of
portfolio composition and trends; (iii) assignment and management of credit authorities and responsibilities; and
(iv) establishment of an allowance for credit losses that covers estimated future losses based upon an analysis of portfolio
metrics and economic factors.
Credit risk related to derivative contracts is managed by reviewing counterparties for credit strength on an ongoing
basis and through our credit policies, which place limits on the amount of exposure we may take with any one
counterparty and require collateral to secure the position. The credit and counterparty risk associated with derivatives is
measured based on the replacement cost should the counterparty with contracts in a gain position to us fail to perform
under the terms of the contract.
Credit risk exposure is managed primarily through the Credit Committee, and regular reporting on credit programs
and credit metrics is provided to the Financial Risk Committee of the Board of Directors.
Market Risk. Market risk is the risk of adverse impacts to earnings, capital, or reputation resulting from fluctuations in
market conditions such as changes in interest rates, foreign exchange rates, commodity prices, equity prices, and other
financial market factors. We are exposed to various types of market risk, in particular the risk of loss resulting from interest
rate risk, basis risk, and other risks that arise through the management of our investment, debt, and loan portfolios. Market
risk exposures are managed primarily through ALCO. These activities are closely tied to those related to the management
of our funding and liquidity risks. The Financial Risk Committee of our Board of Directors periodically reviews and
approves the investment and asset and liability management policies and contingency funding plan developed and
administered by ALCO. The Chief Financial Officer provides reports to the Financial Risk Committee of the Board of
Directors on market risk management.
Liquidity Risk. Liquidity risk is the risk of adverse impacts to earnings, capital, reputation, or survival resulting from
not being able to meet the Company’s financial obligations when they become due, whether due to a lack of available
funding or the inability to liquidate assets in a timely and cost-effective manner.
Our primary liquidity needs include our ongoing ability to: meet our funding needs through market cycles, including
periods of financial stress; manage the relative maturities of assets and liabilities on our balance sheet; fund
disbursements of Private Education Loans and other loans; and service our indebtedness and bank deposits. 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.
2023 Form 10-K — SLM CORPORATION 89
Our liquidity risk activities are centralized within our Corporate Finance department, which is responsible for
developing and executing our funding strategy. We analyze and monitor our liquidity risk, maintain excess liquidity, and
access diverse funding sources depending on current market conditions. 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.
Operational Risk. Operational risk is the risk of adverse impacts to earnings, capital, or reputation resulting from
inadequate or failed internal processes, people, and systems, or from external events. Operational risk is pervasive in that
it exists in all business lines, functional units, legal entities, and geographic locations.
Operational risk exposures are managed through a combination of first line of defense and control activities and
second line of defense oversight. The OCRC is the management committee responsible for operational risk, and it
supports the EC in its oversight duties. The OCRC is responsible for escalation to the EC, as appropriate. Additionally, our
key risk indicators include operational risk metrics, thresholds, and limits and are included in the periodic reporting to the
Operational and Compliance Risk Committee of the Board of Directors.
Cybersecurity risk is one of our significant operational risks. We provide more detailed information on our
cybersecurity risk management, strategy, and governance in Part I, Item 1C. of this Form 10-K.
Compliance Risk. Compliance risk is the risk of adverse impacts to earnings, capital, or reputation resulting from
violations of, or non-conformance with, the Code of Business Conduct and with laws, rules, regulations, and self
regulatory organizations’ standards.
Primary ownership and responsibility for compliance risk is placed with the first line of defense to identify and
manage. Our Compliance function supports these activities by providing extensive training, monitoring, and testing of the
processes, policies, and procedures utilized by the first line of defense, maintaining relevant legal and regulatory
requirements, and working in close coordination with our Legal department. Compliance risk metrics and regular reporting
on compliance programs are provided to the Operational and Compliance Risk Committee of the Board of Directors.
90 SLM CORPORATION — 2023 Form 10-K
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Sensitivity Analysis
Our interest rate risk management program seeks to manage and control interest rate risk, thereby reducing
our exposure to fluctuations in interest rates and achieving consistent and acceptable levels of profit in any rate
environment and sustainable growth in net interest income over the long term. We evaluate and monitor interest
rate risk through two primary methods:
• Earnings at Risk (“EAR”), which measures the impact of hypothetical changes in interest rates on net
interest income; and
• Economic Value of Equity (“EVE”), which measures the sensitivity or change in the economic value of equity
to changes in interest rates.
A number of potential interest rate scenarios are simulated using our asset liability management system. The
Bank is the primary source of interest rate risk within the Company. At December 31, 2022, a significant portion of
the Bank’s earning assets and a large balance of deposits were indexed to 1-month LIBOR. As of their first repricing
date after the LIBOR Cessation Date, these legacy assets and liabilities were converted to various SOFR fallback
rates plus a spread adjustment and are modeled accordingly. Rates are shocked in parallel for shock scenarios
unless otherwise indicated. In addition, key rates are modeled with a floor, which indicates how low each specific
rate is likely to move in practice. Rates are adjusted up or down via a set of scenarios that includes both rate shocks
and ramps. Rate shocks represent an immediate and sustained change in key rates, including 30-day average
SOFR, with the resulting changes in other indices correlated accordingly. Interest rate ramps represent a linear
increase in those key rates over the course of 12 months, with the resulting changes in other indices correlated
accordingly.
The following table summarizes the potential effect on earnings over the next 24 months and the potential
effect on market values of balance sheet assets and liabilities at December 31, 2023 and 2022, based upon a
sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and
300 basis points and a decrease of 100 and 300 basis points while credit and funding spreads remain constant.
EAR analysis assumes a static balance sheet, with maturities of each product replaced with assumed issuance of
new products of the same type. The EVE sensitivity is applied only to financial assets and liabilities, including
hedging instruments, that existed at the balance sheet date, and does not reflect any impact of loan sales, new
assets, liabilities, commitments, or hedging instruments that may arise in the future.
The EAR results for December 31, 2023 indicate a market risk profile of low sensitivity to rate changes, based
on static balance sheet assumptions over the next two years. The EVE metrics demonstrate higher sensitivity than
historic results, including results from one year ago. This is due to an increase in the mix of fixed-rate versus
variable-rate loan disbursements, which results in our liabilities repricing more quickly than our assets over time.
Planned loan sales, which are not included in the static EVE modeling, significantly reduce this exposure.
Management is evaluating this trend to determine if further actions are necessary to manage EVE sensitivity.
As of December 31,
+300 Basis
Points
+100 Basis
Points
-100 Basis
Points
-300 Basis
Points
+300 Basis
Points
+100 Basis
Points
-100 Basis
Points
-300 Basis
Points
2023
2022
EAR - Shock
EAR - Ramp
EVE
-2.9 %
-1.9 %
-26.0 %
-0.9 %
-0.6 %
-8.9 %
+0.7 %
+0.4 %
+8.8 %
+1.9 %
+1.3 %
+25.9 %
+3.0 %
+2.5 %
-9.5 %
+1.0 %
+0.9 %
-3.2 %
-1.1 %
-0.9 %
+3.1 %
-3.7 %
-2.9 %
+6.2 %
In the preceding tables, the interest rate sensitivity analysis reflects the balance sheet mix of fully variable
SOFR and Prime-based loans, and fully variable funding, including brokered CDs that have been converted to
SOFR through derivative transactions. The analysis assumes that retail MMDAs and retail savings balances, while
relatively sensitive to interest rate changes, will not correlate 100 percent to the full interest rate shocks or ramps.
2023 Form 10-K — SLM CORPORATION 91
Also considered is the impact of FFELP Loans, which receive floor income in low interest rate environments, and
will therefore not reprice fully with interest rate shocks.
Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not
account for potential changes in credit quality, balance sheet mix, and size of our balance sheet. They also do not
account for other business developments that could affect net income, or for management actions that could affect
net income or could be taken to change our risk profile. Accordingly, we can give no assurance that actual results
would not differ materially from the estimated outcomes of our simulations. Further, such simulations do not
represent our current view of expected future interest rate movements.
Asset and Liability Funding Gap
The table below presents our assets and liabilities (funding) arranged by underlying indices as of
December 31, 2023. In the following GAAP presentation, the funding gap only includes derivatives that qualify as
effective hedges (those derivatives which are reflected in net interest income, as opposed to those reflected in the
“gains (losses) on derivatives and hedging activities, net” line on the consolidated statements of income). The
difference between the asset and the funding is the funding gap for the specified index. This represents at a high
level our exposure to interest rate risk in the form of basis risk and repricing risk, which is the risk that the different
indices may reset at different frequencies or may not move in the same direction or at the same magnitude. (Note
that all fixed-rate assets and liabilities are aggregated into one line item, which does not capture the differences in
time due to maturity.)
As of December 31, 2023
(dollars in millions)
Index
Frequency of
Variable
Resets
Assets
Funding (1)
Funding
Gap
Fed Funds Effective Rate
daily/weekly/monthly
$
— $
950.7 $
(950.7)
SOFR Rate
3-month SOFR
3-month Treasury bill
Prime
Non-Discrete reset(2)
Fixed-Rate(3)
Total
daily/weekly/monthly
quarterly
weekly
monthly
daily/weekly
7,639.0
—
86.0
0.5
4,354.0
17,090.0
$ 29,169.5 $ 29,169.5 $
5,020.5
251.1
—
—
3,741.9
19,205.3
2,618.5
(251.1)
86.0
0.5
612.1
(2,115.3)
—
(1) Funding (by index) includes all derivatives that qualify as effective hedges.
(2) Assets include restricted and unrestricted cash equivalents and other overnight type
instruments. Funding includes liquid retail deposits and the obligation to return cash collateral
held related to derivatives exposures.
(3) Assets include receivables and other assets (including premiums and reserves). Funding
includes unswapped time deposits, liquid MMDAs swapped to fixed rates, and stockholders’
equity.
The “Funding Gap” in the above table shows primarily mismatches in the Fed Funds Effective Rate, SOFR
rate, 3-month SOFR, non-discrete reset, and fixed-rate categories. Changes in the Fed Funds Effective Rate and
the daily, weekly, and monthly SOFR categories are generally quite highly correlated, and should offset each other
effectively. The funding in the fixed-rate bucket includes $1.6 billion and $0.4 billion of non-interest bearing liabilities.
We consider our overall risk to be low and our strategies are designed to maintain low to moderate levels of market
exposure.
We use interest rate swaps and other derivatives to achieve our risk management objectives. Our asset
liability management strategy is to match assets with debt (in combination with derivatives) that have the same
underlying index and reset frequency or have interest rate characteristics that we believe are highly correlated. The
use of funding with index types and reset frequencies that are different from our assets exposes us to interest rate
risk in the form of basis and repricing risk. This could result in our cost of funds not moving in the same direction or
with the same magnitude as the yield on our assets. While we believe this risk is low, as all of these indices are
short-term with rate movements that are highly correlated over a long period of time, market disruptions (which have
occurred in recent years) can lead to a temporary divergence between indices, resulting in a negative impact to our
earnings.
92 SLM CORPORATION — 2023 Form 10-K
Weighted Average Life
The following table reflects the weighted average lives of our earning assets and liabilities at December 31,
2023.
As of December 31, 2023
(averages in years)
Earning assets
Education loans
Cash and investments
Total earning assets
Deposits
Short-term deposits
Long-term deposits
Total deposits
Borrowings
Long-term borrowings
Total borrowings
Weighted
Average
Life
5.03
1.29
4.12
0.68
2.05
0.99
3.24
3.24
2023 Form 10-K — SLM CORPORATION 93
Item 8. Financial Statements and Supplementary Data
Reference is made to the financial statements listed under the heading “(a) 1.A. Financial Statements” of Item
15 hereof, which financial statements are incorporated by reference in response to this Item 8.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Nothing to report.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer,
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2023. Based on
this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31,
2023, our disclosure controls and procedures were effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported
within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our
management, including our principal executive officer and principal financial officer as appropriate, to allow timely
decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of
our management, including our principal executive officer and principal financial officer, we assessed the
effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment,
our management used the criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment and those criteria,
management concluded that, as of December 31, 2023, our internal control over financial reporting is effective.
KPMG LLP, an independent registered public accounting firm, audited the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2023, as stated in their report listed under the heading
“(a) 1.A. Financial Statements” of Item 15 hereof.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2023 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Nothing to report.
94 SLM CORPORATION — 2023 Form 10-K
PART III.
Item 10. Directors, Executive Officers and Corporate Governance
The information contained in the 2024 Proxy Statement, including information appearing in the sections titled
“Proposal 1 — Election of Directors,” “Executive Officers,” “Compensation Discussion and Analysis — Other
Arrangements, Policies and Practices Related to Executive Compensation Programs — Section 16(a) Beneficial
Ownership Reporting Compliance,” and “Corporate Governance” in the 2024 Proxy Statement, is incorporated
herein by reference.
Item 11. Executive Compensation
The information contained in the 2024 Proxy Statement, including information appearing in the sections titled
“Executive Compensation” and “Director Compensation” in the 2024 Proxy Statement, is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information contained in the 2024 Proxy Statement, including information appearing in the sections titled
“Equity Compensation Plan Information,” “Ownership of Common Stock by 5 Percent or More Holders,” and
“Ownership of Common Stock by Directors and Executive Officers” in the 2024 Proxy Statement, is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information contained in the 2024 Proxy Statement, including information appearing under “Corporate
Governance — Related Party Transactions” and “Corporate Governance — Director Independence” in the 2024
Proxy Statement, is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information contained in the 2024 Proxy Statement, including information appearing under “Independent
Registered Public Accounting Firm” in the 2024 Proxy Statement, is incorporated herein by reference.
2023 Form 10-K — SLM CORPORATION 95
PART IV.
Item 15. Exhibits, Financial Statement Schedules
(a) 1. Financial Statements
A. The following consolidated financial statements of SLM Corporation and the Report of the Independent
Registered Public Accounting Firm thereon are included in Item 8 above:
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and
2021
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
F-2
F-5
F-7
F-8
F-9
F-10
F-13
F-15
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
3. Exhibits
The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this
Annual Report on Form 10-K.
We will furnish at cost a copy of any exhibit filed with or incorporated by reference into this Annual Report on
Form 10-K. Oral or written requests for copies of any exhibits should be directed to the Corporate Secretary.
96 SLM CORPORATION — 2023 Form 10-K
(b) Exhibits
2.1
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
10.1†
10.2†
10.3†
10.4†
10.5†
10.6†
10.7†
10.8†
Separation and Distribution Agreement by and among SLM Corporation, New BLC Corporation and Navient
Corporation, dated as of April 28, 2014 (incorporated by reference to Exhibit 2.2 of the Company’s Current Report on
Form 8-K filed on May 2, 2014).
Restated Certificate of Incorporation of the Company, dated February 25, 2015 (incorporated by reference to Exhibit
3.1 to the Company’s Annual Report on Form 10-K filed on February 26, 2015).
Amended and Restated Bylaws of SLM Corporation, effective November 18, 2021 (incorporated by reference to
Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on November 23, 2021).
Indenture, dated as of June 17, 2015, between SLM Corporation and Deutsche Bank National Trust Company, as
Trustee (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-3 filed on
June 17, 2015).
First Supplemental Indenture dated as of April 5, 2017 between SLM Corporation and Deutsche Bank National Trust
Company, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed
on April 5, 2017).
Second Supplemental Indenture dated as of October 29, 2020 between SLM Corporation and Deutsche Bank
National Trust Company, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on
Form 8-K filed on October 29, 2020).
Form of Senior Note due 2025 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form
8-K filed on October 29, 2020).
Description of SLM Corporation’s Common Stock (incorporated by reference to Exhibit 4.3 to the Company’s Annual
Report on Form 10-K filed on February 28, 2020).
Description of SLM Corporation’s Floating-Rate Non-Cumulative Preferred Stock, Series B (incorporated by
reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed on February 28, 2020).
Third Supplemental Indenture dated as of November 1, 2021 between SLM Corporation and Deutsche Bank
National Trust Company, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on
Form 8-K filed on November 1, 2021).
Form of Senior Note due 2026 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form
8-K filed on November 1, 2021).
SLM Corporation Executive Severance Plan for Senior Officers, including amendments as of June 25, 2015
(incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K filed on February 26,
2016).
SLM Corporation Change in Control Severance Plan for Senior Officers, including amendments as of June 25, 2015
(incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K filed on February 26,
2016).
Form of Director’s Indemnification Agreement (incorporated by reference to Exhibit 10.24 of the Company’s Annual
Report on Form 10-K filed on February 27, 2012).
Sallie Mae Supplemental 401(k) Savings Plan, as Amended and Restated as of June 25, 2015 (incorporated by
reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K filed on February 26, 2016).
Amendment to Sallie Mae Supplemental 401(k) Savings Plan (Effective as of March 5, 2019) (incorporated by
reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019).
SLM Deferred Compensation Plan for Key Employees, as Established Effective May 1, 2014 and Amended June 25,
2015 (incorporated by reference to Exhibit 10.10 of the Company’s Annual Report on Form 10-K filed on February
26, 2016).
Amendment to SLM Corporation Deferred Compensation Plan for Key Employees (Effective as of March 5, 2019)
(incorporated by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019).
SLM Corporation Deferred Compensation Plan for Directors, as Established Effective May 1, 2014 and Amended
June 25, 2015 (incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K filed on
February 26, 2016).
10.9†
Amended and Restated SLM Corporation Incentive Plan (incorporated by reference to Exhibit 10.24 of the
Company’s Current Report on Form 8-K (file no. 001-13251) filed on May 25, 2005).
10.10† Director’s Stock Plan (incorporated by reference to Exhibit 10.25 of the Company’s Current Report on Form 8-K (file
no. 001-13251) filed on May 25, 2005).
2023 Form 10-K — SLM CORPORATION 97
10.11†
SLM Corporation Directors Equity Plan (incorporated by reference to Exhibit 10.1 of the Company’s Registration
Statement on Form S-8 (File No. 333-159447) filed on May 22, 2009).
10.12† SLM Corporation 2009-2012 Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Registration
Statement on Form S-8 (File No. 333-159447) filed on May 22, 2009).
10.13† SLM Corporation 2012 Omnibus Incentive Plan (incorporated by reference to Appendix A of the Company’s
Definitive Proxy Statement for the 2017 Annual Meeting of Shareholders filed on April 27, 2017).
10.14† Sallie Mae Employee Stock Purchase Plan, Amended and Restated as of June 24, 2014, Including Amendments as
of June 25, 2015 (incorporated by reference to Exhibit 10.39 of the Company’s Annual Report on Form 10-K filed on
February 26, 2016).
10.15† Restatement of the Sallie Mae 401(k) Savings Plan (Effective as of January 1, 2018) (incorporated by reference to
Exhibit 10.50 of the Company’s Annual Report on Form 10-K filed on February 28, 2020).
10.16† Amendment to Sallie Mae 401(k) Savings Plan (Effective as of January 1, 2019) (incorporated by reference to
Exhibit 10.51 of the Company’s Annual Report on Form 10-K filed on February 28, 2020).
10.17† Amendment to Sallie Mae 401(k) Savings Plan (Effective as of March 5, 2019) (incorporated by reference to Exhibit
10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019).
10.18
10.19
Tax Sharing Agreement between Navient Corporation and New BLC Corporation, dated as of April 29, 2014
(incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on May 2, 2014).
Amended and Restated Loan Servicing and Administration Agreement between Sallie Mae Bank and Navient
Solutions, Inc., dated as of April 30, 2014 (incorporated by reference to Exhibit 10.4 of the Company’s Current
Report on Form 8-K filed on May 2, 2014).
10.20† Agreement and Release, dated as of March 20, 2018, between the Company and the Personal Representatives of
the Estate of Charles P. Rocha (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on
Form 10-Q filed on April 23, 2018).
10.21†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018).
10.22†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018).
10.23†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Bonus Restricted Stock Unit Term Sheet (Three-Year
Restriction), 2017 Management Incentive Plan Award (incorporated by reference to Exhibit 10.4 of the Company’s
Quarterly Report on Form 10-Q filed on April 23, 2018).
10.24†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2019 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019).
10.25†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2019 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019).
10.26†
Form of SLM Corporation 2012 Omnibus Incentive Plan, Bonus Restricted Stock Unit Term Sheet (Three-Year
Restriction), 2018 Management Incentive Plan Award (incorporated by reference to Exhibit 10.3 of the Company’s
Quarterly Report on Form 10-Q filed on April 17, 2019).
10.27†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2020 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020).
10.28† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2020 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020).
10.29† Offer Letter between Jonathan W. Witter and the Company dated March 4, 2020 (incorporated by reference to
Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020).
10.30
Fixed Dollar Uncollared ASR Master Confirmation and Form of Supplement (incorporated by reference to Exhibit
10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020).
10.31†
Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2020
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020).
10.32† Separation Agreement between Raymond J. Quinlan and the Company effective April 19, 2020 (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020).
10.33†
Jonathan W. Witter Sign-On Equity Grant - 2020 Restricted Stock Unit Term Sheet (incorporated by reference to
Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020).
98 SLM CORPORATION — 2023 Form 10-K
10.34† Offer Letter between Donna F. Vieira and the Company dated September 18, 2018 (incorporated by reference to
Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020).
10.35† Separation Agreement between Paul Thome and the Company effective August 10, 2020 (incorporated by reference
to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on October 21, 2020).
10.36†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021).
10.37†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021).
10.38†
Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Stock Option Award Agreement (incorporated by
reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021).
10.39†
Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement - 2021
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 21, 2021).
10.40† SLM Corporation 2021 Omnibus Incentive Plan (incorporated herein by reference to Exhibit 99.1 of the Company’s
Registration Statement on Form S-8 filed on June 9, 2021).
10.41† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 27, 2022).
10.42† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 27, 2022).
10.43† Form of SLM Corporation 2021 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2022
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 27, 2022).
10.44† Offer Letter between Kerri Palmer and the Company dated January 7, 2021 (incorporated by reference to Exhibit
10.2 of the Company’s Quarterly Report on Form 10-Q filed on July 27, 2022).
10.45† SLM Corporation Amended and Restated Executive Severance Plan for Senior Officers (incorporated by reference
to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 21, 2023).
10.46† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2023 Restricted Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023).
10.47† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2023 Performance Stock Unit Term Sheet (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023).
10.48† Retention Agreement between Steven J. McGarry and the Company dated March 2, 2023 (incorporated by
reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023).
10.49† Agreement and Release between Daniel Kennedy and the Company effective March 30, 2023 (incorporated by
reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023).
10.50† Form of SLM Corporation 2021 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2023
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 26, 2023).
10.51† Offer Letter between Peter Graham and the Company dated August 25, 2023 (incorporated by reference to Exhibit
10.1 of the Company’s Quarterly Report on Form 10-Q filed on October 25, 2023).
21.1*
List of Subsidiaries.
23.1*
Consent of KPMG LLP.
31.1*
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
32.2*
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
97.1*
Financial Restatement Compensation Recovery Policy.
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document.
2023 Form 10-K — SLM CORPORATION 99
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
† Management Contract or Compensatory Plan or Arrangement
* Filed herewith
100 SLM CORPORATION — 2023 Form 10-K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 22, 2024
SLM CORPORATION
By:
/S/ JONATHAN W. WITTER
Jonathan W. Witter
Chief Executive Officer and Director
Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/S/ JONATHAN W. WITTER
Jonathan W. Witter
/S/ PETER M. GRAHAM
Peter M. Graham
/S/ JONATHAN R. BOYLES
Jonathan R. Boyles
Chief Executive Officer and Director
(Principal Executive Officer)
February 22, 2024
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
February 22, 2024
Senior Vice President and Controller
(Principal Accounting Officer)
February 22, 2024
/S/ MARY CARTER WARREN FRANKE
Mary Carter Warren Franke
Chair of the Board of Directors
February 22, 2024
/S/ JANAKI AKELLA
Janaki Akella
/S/ R. SCOTT BLACKLEY
R. Scott Blackley
/S/ PAUL G. CHILD
Paul G. Child
/S/ MARIANNE M. KELER
Marianne M. Keler
/S/ MARK L. LAVELLE
Mark L. Lavelle
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
2023 Form 10-K — SLM CORPORATION 101
/S/ CHRISTOPHER T. LEECH
Christopher T. Leech
/S/ TED MANVITZ
Ted Manvitz
/S/ JIM MATHESON
Jim Matheson
/S/ SAMUEL T. RAMSEY
Samuel T. Ramsey
/S/ VIVIAN C. SCHNECK-LAST
Vivian C. Schneck-Last
/S/ ROBERT S. STRONG
Robert S. Strong
/S/ SHANNON WATKINS
Shannon Watkins
/S/ KIRSTEN O. WOLBERG
Kirsten O. Wolberg
Director
Director
February 22, 2024
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
Director
February 22, 2024
102 SLM CORPORATION — 2023 Form 10-K
CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Page
F-2
F-5
F-7
F-8
F-9
F-10
F-13
F-15
2023 Form 10-K — SLM CORPORATION F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
SLM Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of SLM Corporation and subsidiaries (the
Company) as of December 31, 2023 and December 31, 2022, the related consolidated statements of income,
comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended
December 31, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and December 31, 2022, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally
accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the consolidated financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the
critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the Allowance for Credit Losses related to Private Education Loans Evaluated on a Collective
Basis
As discussed in Notes 2 and 7 to the consolidated financial statements, the Company’s total allowance for
credit losses as of December 31, 2023 was $1,340 million, of which $1,335 million related to the Company’s
allowance for credit losses on private education loans evaluated on a collective basis (the Collective ACL).
For all loans carried at amortized cost, upon loan origination, the Company is required to measure the
allowance for credit losses based on the estimate of all current expected credit losses over the remaining
contractual term of the loans. In determining the lifetime expected credit losses on the private education loan
portfolio, the Company applies a discounted cash flow method that incorporates a probability of default
model and a prepayment model. This method requires the Company to project future principal and interest
F-2 SLM CORPORATION — 2023 Form 10-K
cash flows on the loans in this portfolio following a vintage-based methodology that considers life of loan loss
expectations, prepayments, defaults, recoveries, and any other adjustments deemed necessary to determine
the adequacy of the allowance for credit losses. In estimating current expected credit losses, the Company
uses a combination of expected economic scenarios, which are weighted based upon the current economic
conditions and the Company’s view of the risks of alternate outcomes. In determining the loss rates used for
the vintage-based approach, the Company uses the probability of default model which starts with historical
loss rates, stratifies the loans within each vintage, and then adjusts the loss rates based upon economic
factors forecasted over a reasonable and supportable forecast period. At the end of the reasonable and
supportable forecast period, the forecast is immediately reverted to historical averages. The cash flows are
then discounted at the loan’s effective interest rate to calculate the present value of those cash flows. The
Company also takes certain qualitative factors into consideration when calculating the Collective ACL, which
could result in management overlays.
We identified the assessment of the Collective ACL as a critical audit matter. A high degree of audit effort,
including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the
assessment due to significant measurement uncertainty. Specifically, the assessment of the Collective ACL
methodology encompassed the evaluation of the conceptual soundness and performance of the probability
of default and prepayment models, including their significant assumptions. Such significant assumptions
included (1) economic factors, (2) loss rates derived from the probability of default model, and (3)
prepayment rates derived from the prepayment model. The assessment also encompassed the conceptual
soundness of the methods and significant assumptions used to determine certain individual management
overlays. In addition, auditor judgement was required to evaluate the sufficiency of audit evidence obtained.
The following are the primary procedures we performed to address the critical audit matter. We evaluated the
design and tested the operating effectiveness of certain internal controls related to the Company’s
measurement of the Collective ACL estimate, including controls over the:
•
•
•
•
•
•
•
Collective ACL methodology
performance monitoring of the probability of default and prepayment models
determination and measurement of the significant assumptions used in the models
continued use and appropriateness of the probability of default model
continued use and appropriateness of the prepayment model
development of the individual management overlay methods and assumptions
analysis of the Collective ACL results, trends, and ratios.
We evaluated the Company’s process to develop the Collective ACL estimate by testing certain sources of
data, factors, and assumptions that the Company used, and considered the relevance and reliability of such
data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and
knowledge, who assisted in:
•
•
•
evaluating the Company’s Collective ACL methodology for compliance with U.S. generally accepted
accounting principles
evaluating judgments made by the Company relative to the performance testing of the probability of
default and prepayment models by comparing them to the relevant Company-specific metrics and
trends
assessing the conceptual soundness and performance testing of the probability of default and
prepayment models by inspecting the model documentation to determine whether the models are
suitable for their intended use
2023 Form 10-K — SLM CORPORATION F-3
•
•
evaluating the selection of the economic factors used to adjust loss rates over the reasonable and
supportable forecast period by comparing them to the Company’s business environment and relevant
industry practices
evaluating the conceptual soundness of the methods and assumptions used to develop the individual
management overlays and their impact on the Collective ACL compared with relevant credit risk factors
and consistency with credit trends and identified limitations of the underlying probability of default and
prepayment models.
We also assessed the sufficiency of the audit evidence obtained related to the Collective ACL by evaluating
the cumulative results of the audit procedures and potential bias in the accounting estimates.
/s/ KPMG LLP
We have served as the Company’s auditor since 2013.
McLean, Virginia
February 22, 2024
F-4 SLM CORPORATION — 2023 Form 10-K
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
SLM Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited SLM Corporation and subsidiaries' (the Company) internal control over financial reporting as
of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31,
2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and
2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash
flows for each of the years in the three-year period ended December 31, 2023, and the related notes
(collectively, the consolidated financial statements), and our report dated February 22, 2024 expressed an
unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
2023 Form 10-K — SLM CORPORATION F-5
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
McLean, Virginia
February 22, 2024
/s/ KPMG LLP
F-6 SLM CORPORATION — 2023 Form 10-K
CONSOLIDATED BALANCE SHEETS
As of December 31,
(dollars in thousands, except share and per share amounts)
Assets
Cash and cash equivalents
Investments:
Trading investments at fair value (cost of $43,412 and $47,554,
respectively )
Available-for-sale investments at fair value (cost of $2,563,984
and $2,554,332, respectively)
Other investments
Total investments
Loans held for investment (net of allowance for losses of
$1,339,772 and $1,357,075, respectively)
Loans held for sale
Restricted cash
Other interest-earning assets
Accrued interest receivable
Premises and equipment, net
Goodwill and acquired intangible assets, net
Income taxes receivable, net
Tax indemnification receivable
Other assets
Total assets
Liabilities
Deposits
Long-term borrowings
Other liabilities
Total liabilities
Commitments and contingencies
Equity
2023
2022
$
4,149,838 $
4,616,117
54,481
55,903
2,411,622
2,342,089
91,567
94,716
2,557,670
2,492,708
20,306,357
—
149,669
9,229
1,379,904
129,501
68,711
366,247
—
52,342
19,626,868
29,448
156,719
11,162
1,202,059
140,728
118,273
380,058
2,816
34,073
$ 29,169,468 $ 28,811,029
$ 21,653,188 $ 21,448,071
5,235,114
400,874
27,084,059
5,227,512
407,971
27,288,671
Preferred stock, par value $0.20 per share, 20 million shares
authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively,
at stated value of $100 per share
251,070
251,070
Common stock, par value $0.20 per share, 1.125 billion shares
authorized: 438.2 million and 435.1 million shares issued,
respectively
Additional paid-in capital
Accumulated other comprehensive loss (net of tax benefit of
$(24,176) and $(30,160), respectively)
Retained earnings
Total SLM Corporation stockholders’ equity before treasury stock
Less: Common stock held in treasury at cost: 217.9 million and
194.4 million shares, respectively
Total equity
Total liabilities and equity
87,647
1,148,689
87,025
1,109,072
(75,104)
3,624,859
5,037,161
(93,870)
3,163,640
4,516,937
(3,156,364)
(2,789,967)
1,880,797
1,726,970
$ 29,169,468 $ 28,811,029
See accompanying notes to consolidated financial statements.
2023 Form 10-K — SLM CORPORATION F-7
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31,
(dollars in thousands, except per share amounts)
Interest income:
Loans
Investments
Cash and cash equivalents
Total interest income
Interest expense:
Deposits
Interest expense on short-term borrowings
Interest expense on long-term borrowings
Total interest expense
Net interest income
Less: provisions for credit losses
Net interest income after provisions for credit losses
Non-interest income:
Gains on sales of loans, net
Gains (losses) on securities, net
Gains (losses) on derivatives and hedging activities, net
Other income
Total non-interest income
Non-interest expenses:
Operating expenses:
Compensation and benefits
FDIC assessment fees
Other operating expenses
Total operating expenses
Acquired intangible assets impairment and amortization
expense
Restructuring expenses
Total non-interest expenses
Income before income tax expense
Income tax expense
Net income
Preferred stock dividends
2023
2022
2021
$
2,327,743 $
1,914,554 $
1,756,945
50,810
213,750
35,304
81,722
13,859
6,040
2,592,303
2,031,580
1,776,844
808,065
13,501
208,524
1,030,090
368,914
11,956
161,929
542,799
225,370
18,945
137,763
382,078
1,562,213
1,488,781
1,394,766
345,463
1,216,750
633,453
855,328
(32,957)
1,427,723
160,290
327,750
2,678
—
84,148
247,116
326,554
45,766
246,886
619,206
66,364
—
685,570
778,296
196,905
581,391
17,705
(60,267)
(5)
67,160
334,638
270,354
20,939
260,169
551,462
7,779
—
559,241
630,725
161,711
469,014
9,029
548,315
39,096
144
44,894
632,449
258,321
23,368
236,964
518,653
—
1,255
519,908
1,540,264
379,751
1,160,513
4,736
Net income attributable to SLM Corporation common stock
Basic earnings per common share
Average common shares outstanding
Diluted earnings per common share
Average common and common equivalent shares outstanding
Declared dividends per common share
$
$
$
$
563,686 $
459,985 $
1,155,777
2.44 $
1.78 $
3.67
231,411
258,439
314,993
2.41 $
1.76 $
3.61
234,063
261,503
319,912
0.44 $
0.44 $
0.20
See accompanying notes to consolidated financial statements.
F-8 SLM CORPORATION — 2023 Form 10-K
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended December 31,
(dollars in thousands)
Net income
Other comprehensive income (loss):
2023
2022
2021
$
581,391 $
469,014 $ 1,160,513
Unrealized gains (losses) on investments
59,205
(194,157)
(26,606)
Unrealized gains (losses) on cash flow hedges
(34,457)
93,731
Total unrealized gains (losses)
Income tax (expense) benefit
Other comprehensive income (loss), net of tax
(expense) benefit
24,748
(100,426)
(5,982)
24,453
48,111
21,505
(5,202)
18,766
(75,973)
16,303
Total comprehensive income
$
600,157 $
393,041 $ 1,176,816
See accompanying notes to consolidated financial statements.
2023 Form 10-K — SLM CORPORATION F-9
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Common Stock Shares
(In thousands, except share and per
share amounts)
Balance at December 31, 2020
Net income
Other comprehensive income, net of
tax
Total comprehensive income
Cash dividends declared:
Common stock ($0.20 per share)
Preferred Stock, Series B ($1.89 per
share)
Dividend equivalent units related to
employee stock-based compensation
plans
Issuance of common shares
Stock-based compensation expense
Common stock repurchased and
cancelled
Common stock repurchased
Shares repurchased related to
employee stock-based compensation
plans
Preferred
Stock
Shares
Issued
Treasury
Outstanding
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury
Stock
Total Equity
2,510,696
456,729,251
(81,441,252)
375,287,999 $ 251,070 $ 91,346 $ 1,331,247 $
(34,200) $ 1,722,365 $ (798,993) $ 2,562,835
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,786,581
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,786,581
—
(28,502,460)
—
(28,502,460)
—
(70,246,445)
(70,246,445)
—
(1,368,942)
(1,368,942)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
757
—
—
—
—
—
—
530
4,134
30,649
(5,700)
(466,860)
—
174,684
—
—
—
1,160,513
—
—
—
—
—
—
—
—
—
1,160,513
16,303
1,176,816
(60,462)
(4,736)
(16)
4,891
30,649
(472,560)
(1,242,267)
(1,067,583)
—
—
(60,462)
(4,736)
(546)
—
—
—
—
—
(20,123)
(20,123)
16,303
—
—
—
—
—
—
—
—
—
Balance at December 31, 2021
2,510,696
432,013,372
(153,056,639)
278,956,733 $ 251,070 $ 86,403 $ 1,074,384 $
(17,897) $ 2,817,134 $ (2,061,383) $ 2,149,711
See accompanying notes to consolidated financial statements.
F-10 SLM CORPORATION — 2023 Form 10-K
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Common Stock Shares
(In thousands, except share and per
share amounts)
Balance at December 31, 2021
Net income
Other comprehensive loss, net of
tax
Total comprehensive income
Cash dividends declared:
Common stock (0.44 per share)
Preferred Stock, Series B ($3.60
per share)
Issuance of common shares
Stock-based compensation
expense
Common stock repurchased
Shares repurchased related to
employee stock-based
compensation plans
Preferred
Stock
Shares
Issued
Treasury
Outstanding
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Treasury
Stock
Total Equity
2,510,696
432,013,372
(153,056,639)
278,956,733 $ 251,070 $ 86,403 $ 1,074,384 $
(17,897) $ 2,817,134 $ (2,061,383) $ 2,149,711
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,107,768
—
—
—
—
—
—
—
—
—
—
—
—
—
3,107,768
—
(40,253,548)
(40,253,548)
—
(1,135,509)
(1,135,509)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
622
—
—
—
—
—
—
—
—
618
34,070
—
—
—
469,014
(75,973)
—
—
—
—
(112,961)
(9,029)
(807)
289
—
—
—
—
—
—
—
—
—
—
—
—
—
469,014
(75,973)
393,041
(112,961)
(9,029)
433
34,359
(707,742)
(707,742)
—
(20,842)
(20,842)
Balance at December 31, 2022
2,510,696
435,121,140
(194,445,696)
240,675,444 $ 251,070 $ 87,025 $ 1,109,072 $
(93,870) $ 3,163,640 $ (2,789,967) $ 1,726,970
See accompanying notes to consolidated financial statements.
2023 Form 10-K — SLM CORPORATION F-11
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Common Stock Shares
(In thousands, except share and per
share amounts)
Balance at December 31, 2022
Net income
Other comprehensive income,
net of tax
Total comprehensive income
Cash dividends declared:
Common stock ($0.44 per share)
Preferred Stock, Series B ($7.05
per share)
Issuance of common shares
Stock-based compensation
expense
Common stock repurchased
Shares repurchased related to
employee stock-based
compensation plans
Preferred
Stock
Shares
Issued
Treasury
Outstanding
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury
Stock
Total Equity
2,510,696
435,121,140
(194,445,696)
240,675,444 $ 251,070 $ 87,025 $ 1,109,072 $
(93,870) $ 3,163,640 $ (2,789,967) $ 1,726,970
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,109,276
—
—
—
—
—
—
—
—
—
—
—
—
—
3,109,276
—
(22,341,595)
(22,341,595)
—
(1,099,241)
(1,099,241)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
622
—
—
—
—
—
—
—
—
3,237
36,380
—
—
—
581,391
18,766
—
—
—
—
(101,233)
(17,705)
(1,234)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
581,391
18,766
600,157
(101,233)
(17,705)
2,625
36,380
(349,397)
(349,397)
—
(17,000)
(17,000)
Balance at December 31, 2023
2,510,696
438,230,416
(217,886,532)
220,343,884 $ 251,070 $ 87,647 $ 1,148,689 $
(75,104) $ 3,624,859 $ (3,156,364) $ 1,880,797
See accompanying notes to consolidated financial statements.
F-12 SLM CORPORATION — 2023 Form 10-K
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
(dollars in thousands)
Operating activities
Net income
Adjustments to reconcile net income to net cash used in operating activities:
Provisions for credit losses
Deferred tax provision (benefit)
Amortization of brokered deposit placement fee
Amortization of Secured Borrowing Facility upfront fee
Amortization of deferred loan origination costs and loan premium/(discounts),
net
Net amortization of discount on investments
Reduction of tax indemnification receivable
Depreciation of premises and equipment
Acquired intangible assets impairment and amortization expense
Stock-based compensation expense
Unrealized (gains) losses on derivative and hedging activities, net
Gains on sale of loans, net
(Gains) losses on securities, net
Acquisition transaction costs, net
Other adjustments to net income, net
Changes in operating assets and liabilities:
Increase in accrued interest receivable
Increase in trading investments
Increase in non-marketable securities
(Increase) decrease in other interest-earning assets
Increase in other assets
Increase (decrease) in income tax payable, net
Increase (decrease) in accrued interest payable
Increase (decrease) in other liabilities
Total adjustments
Total net cash (used in) provided by operating activities
Investing activities
Loans acquired and originated
2023
2022
2021
$ 581,391 $ 469,014 $ 1,160,513
345,463
633,453
(32,957)
(23,224)
(93,670)
11,681
2,869
12,583
(2,726)
2,816
17,811
66,364
36,380
(341)
12,904
2,634
14,804
103
5,231
17,331
7,779
34,461
269
55,372
15,516
2,415
16,103
7,310
10,445
16,043
—
30,649
23,249
(160,290)
(327,750)
(548,315)
(2,678)
60,267
(39,096)
952
16,212
2,603
14,213
—
15,686
(1,054,071)
(819,958)
(743,757)
—
(1,256)
1,933
(5,117)
(2,050)
(1,507)
—
(9,969)
33,219
(38,902)
(23,472)
(123,268)
36,723
33,480
(15,063)
72,191
24,986
(13,672)
(27,807)
(6,473)
2,801
(726,028)
(464,022)
(1,210,035)
(144,637)
4,992
(49,522)
(6,452,199)
(6,081,389)
(5,511,845)
Net proceeds from sales of loans held for investment and loans held for sale
3,198,502
3,459,527
4,642,505
Proceeds from FFELP Loan claim payments
50,145
33,197
19,386
Net decrease in loans held for investment and loans held for sale (other than
loans acquired and originated, and loan sales)
Purchases of available-for-sale securities
3,046,064
3,586,825
3,845,990
(105,970)
(753,129)
(1,257,129)
Proceeds from sales and maturities of available-for-sale securities
265,652
960,015
865,766
Purchase of subsidiary, net of cash acquired
Total net cash (used in) provided by investing activities
(14,654)
(127,654)
—
(12,460)
1,077,392
2,604,673
Financing activities
Brokered deposit placement fee
Net increase (decrease) in certificates of deposit
Net increase (decrease) in other deposits
Issuance costs for collateralized borrowings
(7,841)
(11,170)
(12,565)
953,412
130,109
(2,130,728)
(770,485)
570,147
393,306
(15)
(40)
—
Borrowings collateralized by loans in securitization trusts - issued
1,135,036
572,640
1,585,125
Borrowings collateralized by loans in securitization trusts - repaid
(1,154,269)
(1,278,183)
(1,143,738)
Fees paid on Secured Borrowing Facility
Issuance costs for unsecured debt offering
Unsecured debt issued
Unsecured debt repaid
(2,868)
(2,833)
—
—
—
(375)
(2,846)
(1,540)
—
—
492,135
(202,784)
2023 Form 10-K — SLM CORPORATION F-13
Preferred stock dividends paid
Common stock dividends paid
Common stock repurchased
Net cash used in financing activities
(17,705)
(9,029)
(4,736)
(101,233)
(112,961)
(60,462)
(350,264)
(713,197)
(1,530,683)
(316,232)
(854,892)
(2,619,516)
Net increase (decrease) in cash, cash equivalents and restricted cash
(473,329)
227,492
(64,365)
Cash, cash equivalents and restricted cash at beginning of year
4,772,836
4,545,344
4,609,709
Cash, cash equivalents and restricted cash at end of year
$ 4,299,507 $ 4,772,836 $ 4,545,344
Cash disbursements made for:
Interest
Income taxes paid
Income taxes refunded
$ 963,260 $ 482,974 $ 359,684
$ 191,690 $ 272,940 $ 261,473
$
(8,201) $
(2,043) $
(8,614)
Reconciliation of the Consolidated Statements of Cash Flows to the
Consolidated Balance Sheets:
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash
$ 4,149,838 $ 4,616,117 $ 4,334,603
149,669
156,719
210,741
$ 4,299,507 $ 4,772,836 $ 4,545,344
See accompanying notes to consolidated financial statements.
F-14 SLM CORPORATION — 2023 Form 10-K
1. Organization and Business
SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” “our,” or “us”) is a holding company that operates
through a number of subsidiaries and is the premier financial brand for higher education.
While the Sallie Mae name has existed for more than 50 years, the company that operates as Sallie Mae today, SLM
Corporation, was formed in late 2013 and includes its wholly-owned subsidiary, Sallie Mae Bank, an industrial bank
established in 2005 (the “Bank”). On April 30, 2014, we legally separated (the “Spin-Off”) from another public company
that is now named Navient Corporation (“Navient”), which is in the education loan management, servicing, asset recovery,
and consolidation loan business. We are a consumer banking business and did not retain any assets or liabilities
generated prior to the Spin-Off other than those explicitly retained by us pursuant to the documents executed in
connection with the Spin-Off. We sometimes refer to the company that existed prior to the Spin-Off as “pre-Spin-Off SLM.”
Our primary business is to originate and service loans we make to students and their families to finance the cost of
their education. We use “Private Education Loans” to mean education loans to students or their families that are not
made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured
or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP Loans”). The core of our
marketing strategy is to generate Private Education Loan originations by promoting our products on campuses through the
financial aid offices as well as through online and direct marketing to students and their families. The Bank is regulated by
the Utah Department of Financial Institutions (the “UDFI”), the Federal Deposit Insurance Corporation (the “FDIC”), and
the Consumer Financial Protection Bureau (the “CFPB”).
2023 Form 10-K — SLM CORPORATION F-15
2. Significant Accounting Policies
Use of Estimates and Assumptions
The financial reporting and accounting policies of SLM Corporation conform to generally accepted accounting
principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Key accounting policies that
include significant judgments and estimates include the valuation of allowance for credit losses.
Consolidation
The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and
controlled subsidiaries after eliminating the effects of intercompany accounts and transactions.
We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The
primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly
impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could
potentially be significant to the VIE.
Cash and Cash Equivalents
Cash and cash equivalents include cash held in the Federal Reserve Bank of San Francisco (the “FRB”) and
commercial bank accounts, and other short-term liquid instruments with original maturities of three months or less. Fees
associated with investing cash and cash equivalents are amortized into interest income using the effective interest rate
method.
Trading Investments
We periodically sell Private Education Loans through securitization transactions where we are required to retain a
five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those
vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the
residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings.
Available-for-Sale Investments
Our available-for-sale investments consist of mortgage-backed securities, Utah Housing Corporation bonds, and
U.S. government-sponsored enterprises and Treasury securities. We record our investment purchases and sales on a
trade date basis. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of
discounts, which are amortized using the effective interest rate method.
Our investments are classified as available-for-sale and reported at fair value. Unrealized gains or losses on
available-for-sale investments are recorded in equity and reported as a component of other comprehensive income (loss),
net of applicable income taxes.
We assess unrealized losses on available-for-sale debt securities that we have the ability and intent to hold for a
period of time sufficient to recover the amortized cost of the security, for the purpose of determining credit impairment. If
any credit impairment exists, an allowance for losses is established for the amount of the unrealized loss that is
determined to be credit-related.
F-16 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
Other Investments
We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus
or minus observable price changes of identical or similar securities of the same issuer.
We also invest in affordable housing projects that qualify for the low income housing tax credit (“LIHTC”), which is
designed to promote private development of low income housing. These investments generate a return mostly through
realization of federal tax credits.
Loans Held for Investment
Loans, consisting of Private Education Loans and FFELP Loans, that we have the ability and intent to hold for the
foreseeable future, are classified as held for investment, and are carried at amortized cost. Amortized cost includes the
unamortized premiums, discounts, and capitalized origination costs and fees, all of which are amortized to interest income
as discussed under “Loan Interest Income.” Loans that are held for investment are reported net of an allowance for credit
losses. At September 30, 2022, we transferred the portfolio of our former suite of credit cards (“Credit Cards”) from loans
held for investment to loans held for sale as we planned to sell the 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. For additional information, see Notes to Consolidated Financial Statements, Note
6, “Loans Held for Sale” in this Form 10-K.
Loans Held for Sale
Any loans we have not classified as held for investment are classified as held for sale and are carried at the lower of
cost or fair value. Loans are classified as held for sale when we have the intent and ability to sell such loans. Loans that
are held for sale do not have the associated premium, discount, and capitalized origination costs and fees amortized into
interest income. When a decision has been made to sell loans not previously classified as held for sale, such loans are
transferred into the held for sale classification and carried at the lower of amortized cost basis (which excludes any
allowance for credit losses) or fair value. At the time of the transfer to the held for sale classification, any amount by which
the amortized cost basis exceeds fair value is accounted for as a valuation allowance. In addition, once a loan is classified
as held for sale, we reverse any allowance for loan loss applicable to that loan.
As market conditions permit, we may sell or securitize loans as a source of financing for other loans. Due to varying
structuring terms, certain transactions may qualify for sale treatment while others do not qualify for sale treatment and are
recorded as financings. All of our education loans are initially categorized as held for investment. It is only when we have
selected the loans to sell or securitize and the transaction qualifies as a sale that we transfer the loans into the held for
sale classification and carry them at the lower of cost or fair value. If we anticipate recognizing a gain related to the
impending securitization or sale, then the fair value of the loans is higher than their respective cost basis and no valuation
allowance is recorded.
Restricted Cash
Restricted cash primarily includes amounts held in student loan securitization trusts and other secured borrowings.
This cash must be used to make payments related to trust obligations. Amounts on deposit in these accounts are primarily
the result of timing differences between when principal and interest is collected on the trust assets and when principal and
interest is paid on trust liabilities.
Allowance for Credit Losses
We maintain an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well
as for future loan commitments, at the reporting date.
In determining the lifetime expected credit losses on our Private Education Loan portfolio loan segments, we use a
discounted cash flow method. 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 methodology 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. These cash flows are discounted at the loan’s effective interest
rate to calculate the present value of those cash flows. Management adjusts the effective interest rate used to discount
2023 Form 10-K — SLM CORPORATION F-17
2. Significant Accounting Policies (Continued)
expected cash flows to incorporate expected prepayments. The difference between the present value of those cash flows
and the amortized cost basis of the underlying loans is the allowance for credit losses. Entities that measure credit losses
based on the present value of expected future cash flows are permitted to report the entire change in present value as
credit loss expense, but may alternatively report the change in present value due to the passage of time as interest
income. 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. 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). We also
develop an adverse and favorable economic scenario. At each reporting date, we determine the appropriate weighting of
these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes.
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.
In addition to the above modeling approach, we also take certain other qualitative factors into consideration when
calculating the allowance for credit losses, which could result in management overlays (increases or decreases to the
allowance for credit losses). These management overlays can encompass a broad array of factors not captured by model
inputs, including but not limited to, changes in lending policies and procedures, including changes in underwriting
standards, changes in servicing policies and collection administration practices, 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. These include, but are not limited to, CECL model inputs and any
overlays deemed necessary by management. The most impactful CECL model inputs include:
• Economic forecasts;
• Weighting of economic forecasts;
• Prepayment speeds; and
• Recovery 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. 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.
F-18 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
Allowance for Private Education Loan Losses
In addition to the key assumptions/estimates described above, some estimates are unique to our Private Education
Loan portfolio. Estimates are made on our Private Education Loans regarding when each borrower will separate from
school. The cash flow timing of when a borrower will begin making full principal and interest payments is dependent upon
when the student either graduates or leaves school. These dates can change based upon many factors. We receive
information regarding projected graduation dates from a third-party clearinghouse. The separation from school date is
updated quarterly based on updated information received from the clearinghouse.
Additionally, when we have a contractual obligation to fund a loan or a portion of a loan at a later date, we make an
estimate regarding the percentage of this obligation that will be funded. This estimate is based on historical experience.
For unfunded commitments, we recognize the related life of loan allowance as a liability. Once the loan is funded, that
liability transfers to the allowance for Private Education Loan losses.
Key Credit Quality Indicators - Private Education Loans
We determine the collectability of our Private Education Loan portfolio by evaluating certain risk characteristics. We
consider credit score at original approval and periodically refreshed/updated credit scores through the loan’s term,
existence of a cosigner, loan status, and loan seasoning as the key credit quality indicators because they have the most
significant effect on the determination of the adequacy of our allowance for credit losses. Credit scores are an indicator of
the creditworthiness of borrowers, and the higher the credit scores the more likely it is the borrowers will be able to make
all of their contractual payments. Loan status affects the credit risk because a past due loan is more likely to result in a
credit loss than a current loan. Additionally, loans in the deferred payment status have different credit risk profiles
compared with those in current pay status. 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. 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.
In the second quarter of 2023, we changed how we collect on defaulted loans. 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. This improved
our estimate of recovery rates for the year ended December 31, 2023. When we estimate the timing and amount of future
recoveries on charged-off loans, we no longer include expectations of future sales on retained defaulted loans. We
continue to monitor how we collect on defaulted loans and may modify the approach from time to time based on
performance, industry conventions, and/or regulatory feedback.
For December 31, 2022, we used both an estimate of recovery rates from in-house collections as well as
expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off
loans.
Private Education Loans generally do not require borrowers to begin principal and interest repayment until at least
six months after the borrowers have graduated or otherwise separated from school. Consequently, the loss estimates for
these loans are generally low while the borrower is in school and then increase upon the end of the grace period after
separation from school. At December 31, 2023 and 2022, 25 percent and 24 percent, respectively, of the principal balance
of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or
other deferment status and not required to make payments.
Our collection policies for Private Education Loans allow for periods of nonpayment (forbearance) for certain
borrowers requesting an extended grace period upon leaving school or experiencing temporary difficulty meeting payment
obligations.
As part of concluding on the adequacy of the allowance for credit losses for Private Education Loans, we review key
allowance and loan metrics. 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; 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.
2023 Form 10-K — SLM CORPORATION F-19
2. Significant Accounting Policies (Continued)
Adoption of ASU No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures”
On March 31, 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update
(“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.
ASU No. 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. For additional information, see Note 7, "Allowance for Credit Losses," in this Form 10–
K.
Troubled Debt Restructurings - 2021
In the year ended December 31, 2021, 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.
The allowance for our TDR portfolio was included in our overall allowance for Private Education Loans. 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.
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.
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
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the
borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such
approval, but instead have a commitment to fund a portion of the loan at a later date (usually the start of the second
semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are
exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by
us. The discounted cash flow approach described above includes expected future contractual disbursements. The portion
of the allowance for credit losses related to future disbursements is shown as a liability on the face of the balance sheet,
and related provision for credit losses is reflected on the income statement.
F-20 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
Uncollectible Interest
The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued
interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the
borrower makes a $25 monthly payment that is smaller than the interest accrued on the loan in that month. 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. This amount is recorded as a reduction of interest income. Accrued interest receivable is
separately disclosed on the face of the balance sheet.
Allowance for Credit Card Loans
At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale as we planned to sell our
Credit Card portfolio. At that time, we reversed $2.4 million through the provisions for credit losses for the allowance
related to these loans, when the loans were transferred to held for sale. We subsequently sold the Credit Card portfolio to
a third party in May 2023. For the year ended December 31, 2021, we used the gross loss approach when estimating the
allowance for credit losses for our Credit Card portfolio. Because our Credit Card portfolio was new and we did not have
sufficient historical loss experience, we used estimated loss rates reported by other financial institutions to estimate our
allowance for credit losses for Credit Cards, net of expected recoveries. In addition, we used a model that utilized
purchased credit card information with risk characteristics similar to those of our own portfolio as a challenger model. We
then considered any qualitative factors that may change our future expectations of losses.
Allowance for FFELP Loan Losses
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.
Business Combinations
On March 4, 2022, we completed the acquisition of the assets primarily used or held for use of Epic Research
Education Services, LLC, which does business as Nitro College (“Nitro”). Nitro provides resources that help students and
families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation. The
addition of Nitro will support our mission of providing students with the confidence needed to successfully navigate the
higher education journey. The acquisition of the Nitro assets, including its employees and intellectual property, has
expanded our digital marketing capabilities, reduced the cost to acquire customer accounts, and accelerated our progress
to become a broader education solutions provider for students before, during, and immediately after college.
On July 21, 2023, we completed the acquisition of several key assets of Scholly, Inc. (“Scholly”). Scholly 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.
These acquisitions were accounted for as business combinations using the acquisition method of accounting in
accordance with the FASB’s Accounting Standard Codification 805, “Business Combinations,” whereby as of the
respective acquisition date, the acquired tangible assets and liabilities were recorded at their estimated fair values. The
2023 Form 10-K — SLM CORPORATION F-21
2. Significant Accounting Policies (Continued)
identifiable intangible assets were recorded at fair values as determined by an independent appraiser. The final purchase
price allocation for Nitro resulted in an excess purchase price over fair value of net assets acquired, or goodwill, of
$51 million. The final purchase price allocation for Scholly resulted in an excess purchase price over fair value of net
assets acquired, or goodwill, of $5 million.
The results of operations of Nitro and Scholly have been included in our consolidated financial statements since the
respective acquisition dates. We have not disclosed the pro forma impact of these acquisitions to the results of operations
for the years ended December 31, 2023 and 2022, as the pro forma impacts were deemed immaterial. Transaction costs
associated with the Nitro acquisition were approximately $3 million and were expensed as incurred within “Other operating
expenses” in the consolidated statements of income for the year ended December 31, 2022. Transaction costs associated
with the Scholly acquisition were approximately $1 million and were expensed as incurred within “Other operating
expenses” in the consolidated statements of income for the year ended December 31, 2023.
Identifiable intangible assets at the acquisition date of Nitro included definite life intangible assets with an aggregate
fair value of approximately $75 million, including trade name and trademarks, customer relationships, and developed
technology. In the fourth quarter of 2023 we impaired our Nitro trade name and trademarks intangible asset. See Notes to
Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K for additional
details.
Identifiable intangible assets at the acquisition date of Scholly included definite life intangible assets with an
aggregate fair value of approximately $11 million, including trade name and trademarks, developed technology, customer
relationships, and partner relationships.
See “— Goodwill and Acquired Intangible Assets,” and Notes to Consolidated Financial Statements, Note 10,
“Goodwill and Acquired Intangible Assets” in this Form 10-K for additional details.
Goodwill and Acquired Intangible Assets
Acquisitions are accounted for under the acquisition method of accounting, which results in the Company allocating
the purchase price to the fair value of the acquired assets, liabilities, and non-controlling interests, if any, with the
remaining purchase price allocated to goodwill.
Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the
fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. We complete a goodwill
impairment analysis, which may be a qualitative or a quantitative analysis depending on the facts and circumstances
associated with the reporting unit. In conjunction with a qualitative impairment analysis, we assess relevant qualitative
factors to determine whether it is “more-likely-than-not” that the fair value of a reporting unit is less than its carrying
amount. The “more-likely-than-not” threshold is defined as having a likelihood of more than 50 percent. If, based on first
assessing impairment utilizing a qualitative approach, we determine it is “more-likely-than not” that the fair value of the
reporting unit is less than its carrying amount, we will also complete a quantitative impairment analysis. In conjunction with
a quantitative impairment analysis, we compare the fair value of the reporting unit to the reporting unit’s carrying value,
including goodwill. If the carrying value of the reporting unit exceeds the fair value, goodwill is impaired in an amount
equal to the amount by which the carrying value exceeds the fair value of the reporting unit, but not to exceed the goodwill
amount attributed to the reporting unit.
Acquired intangible assets include trade names and trademarks, customer relationships, developed technology, and
partner relationships. Our acquired intangible assets have finite lives and are amortized over their estimated useful lives in
proportion to their estimated economic benefit. We review our long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
See Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form
10-K for additional details.
Deposits
Our retail deposit accounts are principally certificates of deposit (“CDs”), money market deposit accounts
(“MMDAs”), and high-yield savings (“HYS”) accounts. CDs are accounts that have a stipulated maturity and interest rate.
Retail CDs may be withdrawn early, but a penalty is assessed. MMDA and HYS accounts are both interest and non-
interest bearing accounts that have no maturity or expiration date. For retail MMDA and HYS accounts, the depositor may
be required to give written notice of any intended withdrawal not less than seven days before the withdrawal is made.
F-22 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
The Bank also includes brokered CDs in its funding base. Early withdrawal of brokered CDs is prohibited (except in
the case of death or legal incapacity). Other deposit accounts include large interest-bearing omnibus accounts deposited
in the Bank by commercial entities having custodial responsibilities for many underlying accounts. These omnibus
accounts may be structured with or without fixed maturities, and may have fixed or variable interest rates.
Fair Value Measurement
We use estimates of fair value in applying various accounting standards for our financial statements. Fair value
measurements are used in one of four ways:
•
•
•
•
In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of income;
In the consolidated balance sheet with changes in fair value recorded in the accumulated other comprehensive
income section of the consolidated statement of changes in equity;
In the consolidated balance sheet for instruments carried at lower of cost or fair value with impairment charges
recorded in the consolidated statement of income; and
In the notes to the consolidated financial statements.
Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and
able market participants. In general, our policy in estimating fair value is to first look at observable market prices for
identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to
model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates, and
credit spreads (including for our liabilities), relying first on observable data from active markets. Depending on current
market conditions, additional adjustments to fair value may be based on factors such as liquidity, credit, and bid/offer
spreads. Transaction costs are not included in the determination of fair value. When possible, we seek to validate the
model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation
models could produce materially different fair value estimates. The values presented may not represent future fair values
and may not be realizable.
We categorize our fair value estimates based on a hierarchical framework associated with three levels of price
transparency utilized in measuring financial instruments at fair value. Classification is based on the lowest level of input
that is significant to the fair value of the instrument. The three levels are as follows:
•
•
•
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to
access at the measurement date. The types of financial instruments included in level 1 are highly liquid instruments
with quoted prices.
Level 2 — Inputs from active markets, other than quoted prices for identical instruments, are used to determine fair
value. Significant inputs are directly observable from active markets for substantially the full term of the asset or
liability being valued.
Level 3 — Pricing inputs significant to the valuation are unobservable. Inputs are developed based on the best
information available. However, significant judgment is required by us in developing the inputs.
Loan Interest Income
For all loans, including impaired loans (regardless of the delinquency status of the impaired loans), classified as held
for investment, we recognize interest income as earned, adjusted for the amortization of deferred direct origination and
acquisition costs. Deferred fees or costs are required to be recognized as yield adjustments over the life of the related
loans and are recognized by the interest method. The objective of the interest method is to arrive at periodic interest
income (including recognition of fees and costs) at a constant effective yield on the net investment in the receivable (i.e.,
the principal amount of the receivable adjusted by unamortized fees or costs, purchase premium or discount, and any
hedging activity—these unamortized costs will collectively be referred to as “basis adjustments”). The difference between
the periodic interest income so determined and the interest income determined by applying the stated interest rate to the
outstanding principal amount of the receivable is the amount of periodic amortization of deferred direct origination and
acquisition costs.
For the amortization of the basis adjustments, we determine the constant effective yield necessary to apply the
interest method based upon the contractual terms of the loan contract, with no consideration given to expected
prepayments.
For fixed-rate loans, when a prepayment occurs the unamortized balance of the basis adjustments is adjusted so
that future amortization (based upon the contractual terms of the loan) will result in a constant effective yield equal to the
2023 Form 10-K — SLM CORPORATION F-23
2. Significant Accounting Policies (Continued)
original effective interest rate. Prepayments do not result in a change in the effective interest rate of the loan. We
determine the contractual payments on a pool basis; as such, when a prepayment occurs, future contractual payments will
be determined assuming the pool will make smaller payments through the original term of the contract. The adjustment to
the unamortized basis adjustment balance is recorded in interest income.
For variable-rate loans, the effective interest rate at the time of origination is the loan’s effective interest rate
assuming all future contractual payments. The effective interest rate remains the same for that loan until the loan rate
changes. If there is no prepayment and no change in the stated interest rate, the periodic amortization of the basis
adjustments is equal to the difference between the effective interest rate multiplied by the book basis and the contractual
interest due. We determine the contractual payments on a pool basis; as such, when a prepayment occurs, future
contractual payments will be determined assuming the pool will make smaller payments through the original term of the
contract. The adjustment to the unamortized basis adjustment balance is recorded in interest income.
When the interest rate on a variable-rate loan changes, the effective interest rate is recalculated using the same
methodology described in the previous paragraph; however, the future contractual payments are changed to reflect the
new interest rate. There is no forecasting of future expected changes in interest rates. The accounting basis used to
determine the effective interest rate of the cash flows is equal to the balances of the unpaid principal balance and
unamortized basis adjustments at the time of the rate change.
We also pay to the U.S. Department of Education (the “DOE”) an annual 105 basis point Consolidation Loan Rebate
Fee on FFELP consolidation loans, which is netted against loan interest income. Additionally, interest earned on education
loans reflects potential non-payment adjustments in accordance with our uncollectible interest recognition policy. We do
not amortize any adjustments to the basis of loans when they are classified as held for sale.
For loans not currently in full principal and interest repayment status or interest-only repayment status, we recognize
the allowance for the portion of uncollectible interest representing amounts to be capitalized after separation from school
and the expiration of the grace period to the provisions for credit losses and classify this allowance as part of our
allowance for credit losses.
The allowance for the portion of uncollectible interest on loans making full interest payments will continue to be
recorded as a reduction of interest income. As we maintain an allowance for uncollectible interest on loans making full
interest payments and an allowance for credit losses for the interest on loans where all, or a portion of the interest, will be
capitalized in the future, we do not place loans in nonaccrual status prior to charge-off. However, if it is determined that an
individual loan or pool of loans is high risk, they may be placed on nonaccrual status, which entails stopping the accrual of
interest on those loans until such time that the borrower(s) have made a sufficient number of payments (typically six
months) to return to accrual status. At December 31, 2023, we had an immaterial amount of loans in nonaccrual status. At
December 31, 2022, we had no loans in nonaccrual status.
We recognize certain fee income (primarily late fees) on all loans when earned according to the contractual
provisions of the promissory notes, as well as our expectation of collectability. Fee income is recorded when earned in
“other non-interest income” in the accompanying consolidated statements of income.
Interest Expense
Interest expense is based upon contractual interest rates and other fees, adjusted for the amortization of issuance
costs, premiums, and discounts. We incur interest expense on interest-bearing deposits comprised of non-maturity
savings deposits, brokered and retail CDs, brokered and retail MMDAs, as well as unsecured and secured financings. Our
Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”) also incurs an unused
facility fee on the amount of unfunded commitments. Interest expense is recognized when amounts are contractually due
and is adjusted for net payments/receipts related to qualifying interest rate swap agreements designated as hedges of
interest-bearing liabilities. Interest expense also includes the amortization of deferred gains and losses on closed
qualifying hedge transactions. Amortization of debt issuance costs, premiums, discounts, and terminated hedge-basis
F-24 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
adjustments are recognized using the effective interest rate method. Refer to Note 11, “Deposits,” and Note 12,
“Borrowings” in this Form 10-K for further details of our interest-bearing liabilities.
Gains on Sale of Loans, Net
We may participate and sell loans to third parties and affiliates. These sales may occur through whole loan sales or
securitization transactions that qualify for sale treatment. If a transfer of loans qualifies as a sale, we derecognize the loan
and recognize a gain or loss as the difference between the carry basis of the loan sold and liabilities retained and the
compensation received. We recognize the results of a transfer of loans based upon the settlement date of the transaction.
These loans were initially recorded as held for investment and were transferred to held for sale immediately prior to sale
or securitization.
Other Income
Included in other income are late fees on both Private Education Loans and FFELP Loans, which we recognize
when the cash has been received, income for servicing private student loans for third parties, and changes to our tax
indemnification receivable from Navient. Other income also included fees related to our Credit Card program. At
September 30, 2022, we transferred our Credit Card portfolio to loans held for sale and subsequently sold the Credit Card
portfolio to a third party in May 2023.
Securitization Accounting
Our securitization transactions use a two-step structure with a special purpose entity VIE that legally isolates the
transferred assets from us in the event of bankruptcy or receivership. Transactions receiving sale treatment are also
structured to ensure that the holders of the beneficial interests issued are not constrained from pledging or exchanging
their interests, and that we do not maintain effective control over the transferred assets. If these criteria are not met, the
transaction does not meet the criteria for sale treatment and is accounted for as an on-balance sheet secured borrowing.
If a securitization qualifies as a sale, we assess whether Sallie Mae is the primary beneficiary of the securitization trust
and thus required to consolidate the trust. We are considered the primary beneficiary if we have both: (i) the power to
direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to
absorb losses or receive benefits of the entity that could potentially be significant to the VIE. As there is not a bright-line
test for determining significance, the assessment of who has the power to significantly direct the activities of the VIE, and
who has the obligation to absorb losses or receive benefits material to the VIE, can be qualitative and judgmental in
nature. If we are determined to be the primary beneficiary, then no gain or loss is recognized on the transaction.
Irrespective of whether a securitization receives sale or on-balance sheet treatment, our continuing involvement with
our securitization trusts is generally limited to:
• Owning the equity certificates of certain trusts;
•
The servicing of the student loan assets within the securitization trusts, on both a pre- and post-default basis;
• Our acting as administrator for the securitization transactions we sponsored;
• Our responsibilities relative to representation and warranty violations; and
•
The option to exercise the clean-up call and purchase the student loans from the trust when the pool balance is
10 percent or less of the original pool balance.
In 2023 and 2022, we executed several secured financing transactions. Based upon our relationships with these
securitizations, we believe the consolidation assessment is straightforward. We consolidated our secured financing
transactions because either we did not meet the accounting criterion for sales treatment or we determined we were the
primary beneficiary of the VIE because we retained (i) the residual interest in the securitization and therefore had the
obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE, as well as (ii) the
power to direct the activities of the VIE in our role as servicer.
The investors in our securitization trusts have no recourse to our other assets should there be a failure of the trust to
pay when due. Generally, the only recourse the securitization trusts have to us is in the event we breach a seller
representation or warranty or our duties as master servicer and servicer, in which event we are obligated to repurchase
the related loans from the trust. We may also be responsible for indemnities in other instances for such things as willful
misfeasance or bad faith.
In 2023 and 2022, we also closed several loan sales and securitization transactions that were not consolidated on
our balance sheet due to the transaction having met the criteria for sales treatment, for which Sallie Mae is not the primary
beneficiary. In these transactions, we remove loans from our consolidated balance sheet and recognize any assets
retained and liabilities assumed at fair value, and record a gain or loss on the transferred loans. Our continuing
2023 Form 10-K — SLM CORPORATION F-25
2. Significant Accounting Policies (Continued)
involvement in these securitization transactions mainly consists of acting as the primary servicer and holding certain
retained interests. We provide additional information regarding these types of activities in Note 12, “Borrowings —
Unconsolidated VIEs” in this Form 10-K.
Derivative Accounting
We account for our derivatives, consisting of interest rate swaps, at fair value on the consolidated balance sheets as
either an asset or liability. Derivative positions are recorded as net positions by counterparty based on master netting
arrangements (see Note 13, “Derivative Financial Instruments”), exclusive of accrued interest and cash collateral held or
pledged. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all
standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to
reduce counterparty risk. Two of the central counterparties we use are the Chicago Mercantile Exchange (the “CME”) and
the London Clearing House (the “LCH”). 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.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts
as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin
included as settlement as of December 31, 2023 was $(40) million and $(4) million for the CME and LCH, respectively.
Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).
We determine the fair value for our derivative contracts primarily using pricing models that consider current market
conditions and the contractual terms of the derivative contracts. These pricing models consider interest rates, time value,
forward interest rate curves, and volatility factors. Inputs are generally from active financial markets.
The accounting for derivative instruments requires that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at fair
value. Our derivative instruments are classified and accounted for by us as fair value hedges, cash flow hedges, and
trading hedges.
Each derivative is designated to a specific (or pool of) liability(ies) on the consolidated balance sheets, and is
designated as either a “fair value” hedge or a “cash flow” hedge. Fair value hedges are designed to hedge our exposure to
the changes in fair value of a fixed-rate liability. For effective fair value hedges, both the hedge and the hedged item (for
the risk being hedged) are recorded at fair value with any difference reflecting ineffectiveness recorded immediately in the
consolidated statements of income. Cash flow hedges are designed to hedge our exposure to variability in cash flows
related to variable-rate deposits. The assessment of the hedge’s effectiveness is performed at inception and on an
ongoing basis, using regression testing. For hedges of a pool of liabilities, tests are performed to demonstrate the
similarity of individual instruments of the pool. When it is determined that a derivative is not currently an effective hedge,
ineffectiveness is recognized for the full change in fair value of the derivative with no offsetting amount from the hedged
item since the last time it was effective. If it is also determined the hedge will not be effective in the future, we discontinue
the hedge accounting prospectively and begin amortization of any basis adjustments that exist related to the hedged item.
On March 12, 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (“Topic 848”): Facilitation of the
Effects of Reference Rate Reform on Financial Reporting.” On January 7, 2021, the FASB issued ASU No. 2021-01,
“Reference Rate Reform (“Topic 848”): Scope” that clarified the scope of Topic 848. Topic 848 contains temporary optional
expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions
affected by reference rate reform.
Our derivative portfolio is made up of interest rate swaps that are centrally cleared through either the CME or the
LCH. On October 16, 2020, both the CME and the LCH changed the price alignment interest and discount rate applied
when valuing these transactions to the Secured Overnight Financing rate (“SOFR”). The ISDA 2020 LIBOR Fallbacks
Protocol (the “ISDA Fallback Protocol”) was made available for adherence on October 23, 2020, with an effective date of
January 25, 2021. Once adhered to by both counterparties in a bilateral relationship and the effective date is reached, the
ISDA Fallback Protocol represents a change to the contractual terms of derivatives governed by each respective ISDA
agreement between the Company and a derivative counterparty. We have elected the option provided in Topic 848 to not
reassess previous accounting determinations as well as the option to not dedesignate a hedging relationship due to a
current or future change in a critical or contractual term related to reference rate reform, including changes in the discount
rate.
F-26 SLM CORPORATION — 2023 Form 10-K
2. Significant Accounting Policies (Continued)
As our liabilities began to use alternatives to LIBOR before LIBOR was no longer published, for cash flow hedges of
forecasted LIBOR based payments, we elected the expedient offered in Topic 848 to disregard the potential change in the
designated hedged interest rate risk that may occur because of reference rate reform when we assess whether the
hedged forecasted transactions are probable, in accordance with the requirements of “Derivatives and Hedging” Topic
815. We have also elected the expedient provided by Topic 848 to assume the reference rate would not be replaced for
the remainder of the hedging relationship when assessing hedge effectiveness.
Stock-Based Compensation
We recognize stock-based compensation cost in our consolidated statements of income using the fair value method.
Under this method, we determine the fair value of the stock-based compensation at the time of the grant and recognize
the resulting compensation expense over the shorter of the vesting period of the stock-based grant or the employee’s
retirement eligible date. We do not apply a forfeiture rate to our stock-based compensation expense, but rather record
forfeitures when they occur. We record all excess tax benefits/deficiencies related to the settlement of employee stock-
based compensation to the income tax expense line item on our consolidated statements of income.
Restructuring Activities
From time to time we implement plans to restructure our business. During the third quarter of 2020, we initiated a
restructuring program to reduce costs and improve operating efficiencies by better aligning our organizational structure
with our new corporate strategic imperatives. In conjunction with these restructuring plans, involuntary benefit
arrangements, and certain other costs that are incremental and incurred as a direct result of our restructuring plans, are
classified as restructuring expenses in the accompanying consolidated statements of income. We recorded $1 million in
additional restructuring expenses in the year ended December 31, 2021.
We sponsor employee severance plans that provide severance benefits in the event of termination of our full-time
employees and part-time employees who work at least 24 hours per week. The severance plans establish specified
benefits based on base salary, job level immediately preceding termination, and years of service upon termination of
employment due to involuntary termination or a job abolishment, as defined in the severance plans. The benefits payable
under the severance plans relate to past service. Accordingly, we recognize severance costs to be paid pursuant to the
severance plans when payment of such benefits is probable and reasonably estimable. Such benefits, including
severance pay calculated based on the severance plan, medical and dental benefits, outplacement services, and
continuation pay, were incurred during the year ended December 31, 2020, as a direct result of our restructuring initiative.
Accordingly, such costs are classified as restructuring expenses in the accompanying consolidated statements of income.
We finalized this restructuring plan in 2020.
Income Taxes
We account for income taxes under the asset and liability approach, which requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts
and tax basis of our assets and liabilities. To the extent tax laws change, deferred tax assets and liabilities are adjusted in
the period that the tax change is enacted.
“Income tax expense (benefit)” includes (i) deferred tax expense (benefit), which represents the net change in the
deferred tax asset or liability balance during the year when applicable, and (ii) current tax expense (benefit), which
represents the amount of tax currently payable to or receivable from a tax authority plus amounts accrued for
unrecognized tax benefits. Income tax expense (benefit) excludes the tax effects related to adjustments recorded in
equity.
An uncertain tax position is recognized only if it is more likely than not to be sustained upon examination based on
the technical merits of the position. The amount of tax benefit recognized in the consolidated financial statements is the
largest amount of benefit that is more than 50 percent likely of being sustained upon ultimate settlement of the uncertain
tax position. We recognize interest and penalties related to unrecognized tax benefits in income tax expense (benefit).
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. If there is an adjustment to the indemnified uncertain tax liability, an offsetting adjustment to
the indemnification receivable is recorded as pre-tax adjustment to other income in the income statement. As of December
31, 2023, with respect to those amounts recorded at the Spin-Off, both the remaining liability balance (related to uncertain
tax positions) and the remaining indemnification receivable balance (related to uncertain tax positions) were zero.
2023 Form 10-K — SLM CORPORATION F-27
3. Cash and Cash Equivalents
As of December 31, 2023, cash and cash equivalents include cash due from the FRB of $4.1 billion and cash due
from depository institutions of $41 million. As of December 31, 2022, cash and cash equivalents include cash due from the
FRB of $4.6 billion and cash due from depository institutions of $63 million. As of December 31, 2023 and 2022, we had
no outstanding cash equivalents.
The FRB Term Deposit Facility program is used to facilitate the conduct of monetary policy by providing a tool that
may be used to manage the aggregate quantity of reserve balances held by depository institutions. Under this program,
the FRB accepts deposits for a stated maturity at a rate of interest determined via auction. The funds are removed from
the accounts of participating institutions for the life of the term deposit. We did not participate in these auctions in 2023 or
2022, resulting in no interest reported. As of December 31, 2023 and 2022, no funds were on deposit with the FRB under
this program.
4. Investments
Trading Investments
We periodically sell Private Education Loans through securitization transactions where we were required to retain a
five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those
vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the
residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings.
At December 31, 2022, we had a $5 million investment in a convertible debt security classified as a trading
investment. In March 2023, this security, and the related accrued interest, was converted into equity securities classified
as investments in non-marketable securities.
At December 31, 2023 and 2022, we had $54 million and $56 million, respectively, classified as trading investments.
Available-for-Sale Investments
The amortized cost and fair value of securities available for sale are as follows:
As of December 31, 2023
(dollars in thousands)
Available for sale:
Amortized
Cost
Allowance
for credit
losses(1)
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Mortgage-backed securities
$ 468,204 $
— $
703 $ (62,480) $
406,427
Utah Housing Corporation bonds
3,408
U.S. government-sponsored
enterprises and Treasuries
Other securities
Total
As of December 31, 2022
(dollars in thousands)
Available for sale:
1,645,609
446,763
—
—
—
—
(279)
3,129
—
603
(66,870)
1,578,739
(24,039)
423,327
$ 2,563,984 $
— $
1,306 $ (153,668) $ 2,411,622
Amortized
Cost
Allowance
for credit
losses(1)
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Mortgage-backed securities
$ 389,067 $
— $
2 $ (68,705) $
320,364
Utah Housing Corporation bonds
3,584
U.S. government-sponsored
enterprises and Treasuries
Other securities
Total
1,804,726
356,955
—
—
—
—
(357)
3,227
—
(115,416)
1,689,310
33
(27,800)
329,188
$ 2,554,332 $
— $
35 $ (212,278) $ 2,342,089
(1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the
consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes
unrealized losses related to non-credit factors.
F-28 SLM CORPORATION — 2023 Form 10-K
4.
Investments (Continued)
The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the
estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have
been in an unrealized loss position:
As of December 31,
(dollars in thousands)
2023:
Less than 12 months
12 months or more
Total
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Mortgage-backed securities
$
(531) $
51,391 $ (61,949) $ 300,318 $ (62,480) $
351,709
Utah Housing Corporation bonds
U.S. government-sponsored enterprises
and Treasuries
—
—
—
—
(279)
3,129
(279)
3,129
(66,870) 1,578,739
(66,870) 1,578,739
Other securities
(2,221)
90,725
(21,818)
241,253
(24,039)
331,978
Total
2022:
$
(2,752) $ 142,116 $ (150,916) $ 2,123,439 $ (153,668) $ 2,265,555
Mortgage-backed securities
$ (13,956) $
99,598 $ (54,749) $ 220,576 $ (68,705) $
320,174
Utah Housing Corporation bonds
(357)
3,227
—
—
(357)
3,227
U.S. government-sponsored enterprises
and Treasuries
Other securities
Total
(28,128)
689,300
(87,288) 1,000,010
(115,416) 1,689,310
(15,852)
232,546
(11,948)
92,883
(27,800)
325,429
$ (58,293) $ 1,024,671 $ (153,985) $ 1,313,469 $ (212,278) $ 2,338,140
At December 31, 2023 and 2022, 213 of 248 and 191 of 194, respectively, of our available-for-sale securities were in
an unrealized loss position.
Impairment
For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more
likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of these
criteria is met, the security’s amortized cost basis is written down to fair value through income. For securities in an
unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from
credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized
cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as
well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this
assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on
the security.
Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac,
as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community
Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal
Home Loan Banks, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued
under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-
backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac,
respectively. Our Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors
Service or AA+ by Standard and Poor’s. The decline in value from December 31, 2022 to December 31, 2023 was driven
by the current interest rate environment and is not credit-related. We have the intent and ability to hold these bonds for a
period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on
this qualitative analysis, we have determined that no credit impairment exists.
We periodically sell Private Education Loans through securitization transactions where we are required to retain a
five percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale
investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price
to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to
these investments and do not consider a credit impairment to exist.
2023 Form 10-K — SLM CORPORATION F-29
4.
Investments (Continued)
As of December 31, 2023, the amortized cost and fair value of securities, by contractual maturities, are summarized
below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.
As of December 31, 2023
Year of Maturity
(Dollars in thousands)
2024
2025
2026
2027
2038
2039
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2058
Total
Amortized
Cost
Estimated
Fair Value
$ 699,496
$ 686,762
298,815
548,686
98,612
289,794
506,438
95,746
68
646
2,296
4,156
4,837
5,107
7,725
7,646
2,027
15,792
107,611
154,622
53,653
245,209
71,439
86,199
102,609
46,733
69
639
2,002
3,773
4,483
4,596
6,897
6,880
1,971
14,170
87,112
124,399
46,966
236,537
63,426
81,892
100,728
46,342
$ 2,563,984
$ 2,411,622
Some of the mortgage-backed securities and a portion of the government securities have been pledged to the FRB
as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB.
We had $612 million and $547 million par value of securities pledged to this borrowing facility at December 31, 2023 and
2022, respectively, as discussed further in Note 12, “Borrowings” in this Form 10-K.
Other Investments
Investments in Non-Marketable Securities
We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus
or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are
recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or
similar securities of the same issuer, or when observable prices are not available, use market data of similar entities, in
determining any changes in the value of the securities. In March 2023, our $5 million investment in a convertible debt
security, classified as a trading investment, and the related accrued interest were converted into equity securities and
were reclassified to investments in non-marketable securities. In the second quarter of 2021, we funded an additional
investment, as part of a larger equity raise, in an issuer whose equity securities we purchased in the past. We used the
valuation associated with the more recent equity raise to adjust the valuation of our previous investments, and, as a result,
recorded a gain of $35 million on our earlier equity securities investments. This gain was recorded in “gains (losses) on
securities, net” in the consolidated statements of income in 2021. In the fourth quarter of 2022, we determined that our
investment in these non-marketable equity securities was impaired. As such, we wrote down the value based upon an
F-30 SLM CORPORATION — 2023 Form 10-K
4.
Investments (Continued)
estimate of the value of these securities and recorded a loss of $60 million in “gains (losses) on securities, net” in the
consolidated statements of income in 2022. At December 31, 2023 and December 31, 2022, our total investment in the
non-marketable securities of this issuer was $14 million and $8 million, respectively.
Low Income Housing Tax Credit Investments
We invest in affordable housing projects that qualify for the LIHTC, which is designed to promote private
development of low income housing. We recognized $11 million, $9 million, and $7 million of tax credits and other tax
benefits associated with investments in affordable housing projects within income tax expense for the years ended
December 31, 2023, 2022, and 2021, respectively. The amount of amortization of such investments reported in income
tax expense was $9 million, $7 million, and $6 million for the years ended December 31, 2023, 2022, and 2021,
respectively. Total carrying value of the LIHTC investments was $72 million at December 31, 2023 and $80 million at
December 31, 2022. We are periodically required to provide additional financial support during the investment period. Our
liability for these unfunded commitments was $30 million at December 31, 2023 and $46 million at December 31, 2022.
5. Loans Held for Investment
Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Credit Cards” to refer to
the suite of Credit Card loans that we previously held. At September 30, 2022, we transferred our Credit Card portfolio to
loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. We recorded a loss of
$4 million on the on the sale of the Credit Card portfolio in 2023. For additional information, see Note 6, “Loans Held for
Sale” in this Form 10-K.
Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the
amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full
credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners.
Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight
Financing Rate. As of December 31, 2023, 33 percent of all our Private Education Loans were indexed to SOFR. As of
December 31, 2022, 45 percent of all our Private Education Loans were indexed to LIBOR or SOFR. We provide
incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our
portfolio are cosigned. We also encourage customers to make payments while in school.
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 on all qualifying claims.
In 2021, we recognized $548 million in gains from the sale of approximately $4.24 billion of our Private Education
Loans, including $3.98 billion of principal and $264 million in capitalized interest, to unaffiliated third parties. In 2022, we
recognized $328 million in gains from the sale of approximately $3.34 billion of our Private Education Loans, including
$3.13 billion of principal and $217 million in capitalized interest, to unaffiliated third parties. In 2023, we recognized
$164 million in gains from the sale of approximately $3.15 billion of our Private Education Loans, including $2.93 billion of
principal and $226 million in capitalized interest, to an unaffliated third party. There were VIEs created in the execution of
certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these
VIEs. These 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, see Note 12, “Borrowings - Unconsolidated VIEs” in this
Form 10-K.
2023 Form 10-K — SLM CORPORATION F-31
5. Loans Held for Investment (Continued)
Loans held for investment are summarized as follows:
As of December 31,
(dollars in thousands)
Private Education Loans:
Fixed-rate
Variable-rate
2023
2022
$ 13,985,791 $ 11,108,079
7,040,053
9,195,609
Total Private Education Loans, gross
21,025,844
20,303,688
Deferred origination costs and unamortized
premium/ (discount)
Allowance for credit losses
81,554
69,656
(1,335,105)
(1,353,631)
Total Private Education Loans, net
19,772,293
19,019,713
FFELP Loans
537,401
609,050
Deferred origination costs and unamortized
premium/ (discount)
Allowance for credit losses
Total FFELP Loans, net
1,330
(4,667)
1,549
(3,444)
534,064
607,155
Loans held for investment, net
$ 20,306,357 $ 19,626,868
The estimated weighted average life of education loans in our portfolio was approximately 5.0 years at both
December 31, 2023 and 2022.
The average balance and the respective weighted average interest rates of loans in our portfolio (net of unamortized
premium/discount) are summarized as follows:
2023
2022
2021
Years ended December 31,
(dollars in thousands)
Average
Balance
Weighted
Average
Interest
Rate
Average
Balance
Weighted
Average
Interest
Rate
Average
Balance
Weighted
Average
Interest
Rate
Private Education Loans
$ 21,039,701
10.86 % $ 20,576,737
9.14 % $ 20,968,061
8.25 %
FFELP Loans
Credit Cards(1)
Total portfolio
574,218
—
7.19
—
662,194
4.62
—
—
718,186
14,982
3.43
4.67
$ 21,613,919
$ 21,238,931
$ 21,701,229
(1) Credit Card loans were transferred to loans held for sale at September 30, 2022 and were subsequently sold to a third party in May 2023.
F-32 SLM CORPORATION — 2023 Form 10-K
5. Loans Held for Investment (Continued)
Certain Collection Tools — Private Education Loans
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.
Forbearance allows a borrower to not make scheduled payments for a specified period of time. Using forbearance
extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the
total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is
capitalized (added to principal) at the end of the forbearance. 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. 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. 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. In addition, we currently limit the participation of delinquent borrowers in certain short-term
extended or interest-only repayment alternatives to once in 12 months and twice in five years. We also now count the
number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance
limit described above.
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
2023 Form 10-K — SLM CORPORATION F-33
5. Loans Held for Investment (Continued)
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 up to 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., Graduated
Repayment Period program (“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 these changes to 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.
The period of delinquency for loans is based on the number of days scheduled payments are contractually past due.
As of December 31, 2023 and 2022, we had $151 million and $135 million, respectively, of Private Education Loans held
for investment and $45 million and $68 million, respectively, of FFELP Loans held for investment which were more than 90
days delinquent that continue to accrue interest. At December 31, 2023, we had an immaterial amount of loans in
nonaccrual status. At December 31, 2022, we had no loans in nonaccrual status.
Borrower-in-Custody Arrangements
We maintain Borrower-in-Custody arrangements with the FRB. Under these arrangements, we can pledge FFELP
Loans or Private Education Loans to the FRB to secure any advances and accrued interest generated under the Primary
Credit program at the FRB. As of December 31, 2023 and 2022, we had $1.4 billion and $2.7 billion, respectively, of
Private Education Loans pledged to this borrowing facility, as discussed further in Note 12, “Borrowings” in this Form 10-K.
We did not have any FFELP Loans pledged at December 31, 2023 or 2022.
Loans Held for Investment by Region
At December 31, 2023 and 2022, 43.5 percent and 43.1 percent, respectively, of total education loans were
concentrated in the following states:
F-34 SLM CORPORATION — 2023 Form 10-K
5. Loans Held for Investment (Continued)
As of December 31,
2023
2022
California
New York
Pennsylvania
Texas
New Jersey
Florida
10.1 %
9.8 %
9.0
7.2
6.3
5.6
5.3
9.1
7.4
6.0
5.8
5.0
43.5 %
43.1 %
No other state had a concentration of total education loans in excess of 5 percent of the aggregate outstanding
education loans held for investment.
6. Loans Held for Sale
We had no loans held for sale at December 31, 2023 and $29 million in loans held for sale at December 31, 2022.
The balance at December 31, 2022 was comprised of our Credit Card loan portfolio. At September 30, 2022, when the
loans were transferred to held for sale, we reversed $2.4 million through the provisions for credit losses for the allowance
related to these loans. At September 30, 2022, we wrote down this loan portfolio to its estimated fair value through a
charge-off to the allowance for credit losses of $1.5 million. 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.
7. Allowance for Credit Losses
Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb
lifetime expected credit losses in the held for investment loan portfolios. The evaluation of the allowance for credit losses
is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the
allowance for credit losses is appropriate to cover lifetime expected losses incurred in the loan portfolios. See Note 2,
“Significant Accounting Policies — Allowance for Credit Losses, — Allowance for Private Education Loan Losses, —
Allowance for FFELP Loan Losses, — Allowance for Credit Card Loans,” for a more detailed discussion.
2023 Form 10-K — SLM CORPORATION F-35
7. Allowance for Credit Losses (Continued)
Allowance for Credit Losses Metrics
Year Ended December 31, 2023
(dollars in thousands)
Allowance for Credit Losses
Beginning balance
FFELP
Loans
Private Education
Loans
Total
$
3,444
$
1,353,631
$ 1,357,075
Transfer from unfunded commitment liability(1)
—
320,237
320,237
Provisions:
Provision for current period
Loan sale reduction to provision
Loans transferred to held-for-sale
Total provisions(2)
Net charge-offs:
Charge-offs
Recoveries
Net charge-offs
Ending Balance
Allowance(3):
Ending balance: collectively evaluated for impairment
Loans(3):
Ending balance: collectively evaluated for impairment
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment
Net charge-offs as a percentage of average loans in
repayment(4)
Allowance as a percentage of the ending total loan balance
and accrued interest to be capitalized(5)
Allowance as a percentage of the ending loans in repayment
and accrued interest to be capitalized on loans in
repayment(4)(5)
Allowance coverage of net charge-offs
Ending total loans, gross
Average loans in repayment(4)
Ending loans in repayment(4)
Accrued interest to be capitalized on loans in repayment(6)
2,224
—
—
2,224
(1,001)
—
(1,001)
4,667
4,667
537,401
—
0.23 %
0.87 %
1.15 %
4.66
537,401
433,225
406,568
—
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
240,347
(205,383)
—
34,964
(420,095)
46,368
(373,727)
242,571
(205,383)
—
37,188
(421,096)
46,368
(374,728)
1,335,105
$ 1,339,772
1,335,105
$ 1,339,772
21,025,844
$ 21,563,245
1,203,357
$ 1,203,357
2.44 %
6.01 %
8.43 %
3.57
21,025,844
15,310,934
15,409,814
435,807
(1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2) Below is a reconciliation of the provisions 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 loan 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
Year Ended December 31, 2023 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses
Provisions for unfunded loan commitments
Total Private Education Loan provisions for credit losses
Other impacts to the provisions for credit losses:
FFELP Loans
Total
$
Provisions for credit losses reported in consolidated statements of income
$
34,964
308,275
343,239
2,224
2,224
345,463
(3) For the year ended December 31, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were
individually evaluated for impairment.
(4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and
interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(5) Accrued interest to be capitalized on Private Education Loans only.
(6) 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
repayment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance).
F-36 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
Year Ended December 31, 2022
(dollars in thousands)
Allowance for Credit Losses
Beginning balance
Transfer from unfunded commitment liability(1)
Provisions:
Provision for current period
Loan sale reduction to provision
Loans transferred to held-for-sale
Total provisions(2)
Net charge-offs:
Charge-offs
Recoveries
Net charge-offs
Ending Balance
Allowance(3):
Ending balance: collectively evaluated for impairment
Loans(3):
Ending balance: collectively evaluated for impairment
Accrued interest to be capitalized(3):
Ending balance: collectively evaluated for impairment
$
—
Net charge-offs as a percentage of average loans in
repayment(4)
Allowance as a percentage of the ending total loan balance and
accrued interest to be capitalized(5)
Allowance as a percentage of the ending loans in repayment
and accrued interest to be capitalized on loans in repayment(4)(5)
Allowance coverage of net charge-offs
0.12 %
0.57 %
0.76 %
5.62
Ending total loans, gross
Average loans in repayment(4)
Ending loans in repayment(4)
Accrued interest to be capitalized on loans in repayment(6)
$
$
$
$
609,050
517,139
453,915
—
FFELP
Loans
Private Education
Loans
Credit
Cards
Total
$
4,077
$
1,158,977
$ 2,281
$
1,165,335
—
(20)
—
—
(20)
(613)
—
(613)
3,444
3,444
$
$
$
609,050
344,310
—
344,310
410,254
3,301
(174,231)
—
—
(2,372)
236,023
929
(427,416)
(3,215)
41,737
5
(385,679)
(3,210)
413,535
(174,231)
(2,372)
236,932
(431,244)
41,742
(389,502)
1,353,631
$ —
$
1,357,075
1,353,631
$ —
$
1,357,075
20,303,688
$ —
$ 20,912,738
936,837
$ —
$
936,837
2.55 %
— %
6.37 %
— %
8.76 %
3.51
— %
—
20,303,688
$ —
15,103,123
$ —
15,129,550
$ —
324,384
$ —
$
$
$
$
$
$
$
$
(1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2) Below is a reconciliation of the provisions 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 loan 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
Year Ended December 31, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses
Provisions for unfunded loan commitments
Total Private Education Loan provisions for credit losses
Other impacts to the provisions for credit losses:
FFELP Loans
Credit Cards
Total
$
236,023
396,521
632,544
(20)
929
909
Provisions for credit losses reported in consolidated statements of income
$
633,453
(3) For the year ended December 31, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were
individually evaluated for impairment.
(4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and
interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(5) Accrued interest to be capitalized on Private Education Loans only.
(6) 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
repayment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance).
2023 Form 10-K — SLM CORPORATION F-37
7. Allowance for Credit Losses (Continued)
Year Ended December 31, 2021
(dollars in thousands)
Allowance for Credit Losses
Beginning balance
Transfer from unfunded commitment liability(1)
Provisions:
Provision for current period
Loan sale reduction to provision
Loans transferred to held-for-sale
Total provisions(2)
Net charge-offs:
Charge-offs
Recoveries
Net charge-offs
Ending Balance
Allowance:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Loans:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Accrued interest to be capitalized:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Net charge-offs as a percentage of average loans in
repayment(3)
Allowance as a percentage of the ending total loan balance
and accrued interest to be capitalized(4)
Allowance as a percentage of the ending loans in repayment
and accrued interest to be capitalized on loans in
repayment(3)(4)
Allowance coverage of net charge-offs
Ending total loans, gross
Average loans in repayment(3)
Ending loans in repayment(3)
Accrued interest to be capitalized on loans in repayment(5)
FFELP
Loans
Private Education
Loans
Credit
Cards
Total
$
4,378
$
1,355,844
$
1,501
$
1,361,723
—
20
—
—
20
(321)
—
(321)
301,655
—
301,655
(233,852)
(66,460)
1,887
1,124
—
—
(298,425)
1,124
(229,591)
29,494
(200,097)
(356)
12
(344)
(232,708)
(66,460)
1,887
(297,281)
(230,268)
29,506
(200,762)
4,077
$
1,158,977
$
2,281
$
1,165,335
—
4,077
—
695,216
—
—
0.06 %
0.59 %
0.74 %
12.70
695,216
545,689
553,980
—
$
$
$
$
$
$
$
$
$
$
47,712
1,111,265
1,057,665
19,659,198
—
947,391
$
$
$
$
$
$
—
2,281
—
25,014
—
—
$
$
$
$
$
$
47,712
1,117,623
1,057,665
20,379,428
—
947,391
1.33 %
2.24 %
5.35 %
9.12 %
7.32 %
5.79
9.12 %
6.63
20,716,863
15,019,869
15,511,212
312,537
$
$
$
$
25,014
15,343
25,014
—
$
$
$
$
$
$
$
$
$
$
$
(1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments,
respectively.
(2) Below is a reconciliation of the provisions 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 loan 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
Year Ended December 31, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses
Provisions for unfunded loan commitments
Total Private Education Loan provisions for credit losses
Other impacts to the provisions for credit losses:
FFELP Loans
Credit Cards
Total
$
(298,425)
264,324
(34,101)
20
1,124
1,144
Provisions for credit losses reported in consolidated statements of income
$
(32,957)
(3) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full
principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they
are in forbearance).
(4) Accrued interest to be capitalized on Private Education Loans only.
(5) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and
interest payment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in
forbearance).
F-38 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
Private Education Loans Allowance for Credit Losses - Forecast Assumptions
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 used 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 occurring. 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 January 1, 2020 (the initial adoption
date of CECL), December 31, 2023, December 31, 2022, and December 31, 2021, 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.
Provision for credit losses for the year ended December 31, 2023 was $345 million, compared with $633 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 Loans 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 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. “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.
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; and delinquency and forbearance percentages.
Loan Modifications to Borrowers Experiencing Financial Difficulty
The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each
asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is
historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial
difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a
borrower is experiencing financial difficulty is made on the date of a modification.
The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already
included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance.
The forecast of expected future cash flows is updated as the loan modifications occur.
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.
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
2023 Form 10-K — SLM CORPORATION F-39
7. Allowance for Credit Losses (Continued)
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.
Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming. FFELP
Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event
of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in
their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim.
For additional information, see Note 2, “Significant Accounting Policies —Allowance for Credit Losses” in this Form
10-K.
Under our current forbearance practices, temporary forbearance of payments is generally granted in one-to-two
month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a
borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12
monthly required payments under the loan). See Note 5, “Loans Held for Investment — Certain Collection Tools - Private
Education Loans.” In the first quarter of 2022, we adopted ASU No. 2022-02 (see Note 2, “Significant Accounting
Policies”). Under this new amendment, if the debt has been previously restructured, an entity must consider the
cumulative effect of past restructurings made within the 12-month period before the current restructuring when
determining whether a delay in payment resulting from the current restructuring is insignificant. Due to our current
forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of
forbearances will exceed the significance threshold and, therefore, we do not consider the forbearances as loan
modifications.
The limitations on granting of forbearances described above apply to hardship forbearances. We offer other
administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school
assistance) that are either required by law (such as by the Servicemembers Civil Relief Act) or are considered separate
from our active loss mitigation programs and therefore are not considered to be loan modifications requiring disclosure
under ASU No. 2022-02. In addition, we may offer on a limited basis term extensions or rate reductions or a combination
of both to borrowers to reduce consolidation activities. For purposes of this disclosure, we do not consider them
modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.
The following tables show the amortized cost basis at the end of the respective reporting period of the loans to
borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing
receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we
do not always disburse the full amount of the loan at the time of 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 consider
borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and
interest payments.
Year Ended December 31, 2023
(dollars in thousands)
Interest Rate Reduction
Combination - Interest Rate
Reduction and Term Extension
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Loan Type:
Private Education Loans
Total
Amortized Cost
Basis
$
$
48,637
48,637
% of Total Class
of Financing
Receivable
Amortized Cost
Basis
% of Total Class
of Financing
Receivable
0.22 % $
331,889
0.22 % $
331,889
1.48 %
1.48 %
F-40 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
Year Ended December 31, 2022
(dollars in thousands)
Interest Rate Reduction
Combination - Interest Rate
Reduction and Term Extension
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Loan Type:
Private Education Loans
Total
Amortized Cost
Basis
$
$
30,569
30,569
% of Total Class
of Financing
Receivable
Amortized Cost
Basis
% of Total Class
of Financing
Receivable
0.14 % $
295,547
0.14 % $
295,547
1.37 %
1.37 %
The following tables describe the financial effect of the modifications made to loans whose borrowers are
experiencing financial difficulty:
Year Ended December 31, 2023
Interest Rate Reduction
Combination - Interest Rate
Reduction and Term Extension
Loan Type
Financial Effect
Loan Type
Financial Effect
Private Education Loans
Reduced average
contractual rate from 13.37%
to 4.00%
Private Education Loans
Added a weighted average
10.20 years to the life of
loans
Reduced average
contractual rate from
12.92% to 4.00%
Year Ended December 31, 2022
Interest Rate Reduction
Combination - Interest Rate
Reduction and Term Extension
Loan Type
Financial Effect
Loan Type
Financial Effect
Private Education Loans
Reduced average
contractual rate from 11.12%
to 4.00%
Private Education Loans
Added a weighted average
10.40 years to the life of
loans
Reduced average
contractual rate from
10.57% to 4.00%
Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or
otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is
reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Note 2,
“Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses, and —
Allowance for FFELP Loan Losses” in this Form 10-K for a more detailed discussion.
2023 Form 10-K — SLM CORPORATION F-41
7. Allowance for Credit Losses (Continued)
For the current period presented, the following table provides loan modifications for which a payment default
occurred in the relevant period presented and within 12 months of the loan receiving a loan modification. Additionally, for
the current period presented, the table summarizes charge-offs occurring in the relevant period presented and within 12
months of the loan receiving a loan modification. We define payment default as 60 days past due for purposes of this
disclosure.
(Dollars in thousands)
Loan Type:
Private Education Loans
Total
Year Ended December 31, 2023
Year Ended December 31, 2022
Modified
Loans(1)(2)
Payment
Default(3)
Charge-
Offs(4)
Modified
Loans(1)(2)
Payment
Default(3)
Charge-
Offs(4)
$
$
28,972 $
30,862 $
8,070 $
22,925 $
22,621 $
28,972 $
30,862 $
8,070 $
22,925 $
22,621 $
6,331
6,331
(1) Represents period-end amortized cost basis of loans that have been modified and for which a payment default occurred in the relevant period
presented and within 12 months of receiving a modification (or within the reporting period, for the loans shown in in the year-ago period, as the case
may be).
(2) For the year ended December 31, 2023, the modified loans include $24.8 million of interest rate reduction and term extension loan modifications and
$4.2 million of interest rate reduction only loan modifications. For the year ended December 31, 2022, the modified loans include $20.6 million of
interest rate reduction and term extension loan modifications and $2.3 million of interest rate reduction only loan modifications.
(3) Represents the unpaid principal balance at the time of payment default.
(4) Represents the unpaid principal balance at the time of charge off.
We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to
understand the effectiveness of the modification efforts. The following table depicts the performance of loans that have
been modified during the respective reporting periods (the full years 2023 and 2022, respectively).
At December 31, 2023
(dollars in thousands)
Loan Type:
Private Education Loans
Total
At December 31, 2022
(dollars in thousands)
Loan Type:
Private Education Loans
Total
Payment Status (Amortized Cost Basis)
Deferment(1)
Current(2)(3)
30-59 Days
Past Due(2)(3)
60-89 Days
Past Due(2)(3)
90 Days or
Greater
Past Due(2)(3)
Total
$
$
6,843
$ 334,967
6,843
$ 334,967
$
$
17,205
17,205
$
$
7,689
7,689
$
$
13,822 $
380,526
13,822 $
380,526
Payment Status (Amortized Cost Basis)
Deferment(1)
Current(2)(3)
30-59 Days
Past Due(2)(3)
60-89 Days
Past Due(2)(3)
90 Days or
Greater
Past Due(2)(3)
Total
$
$
7,698
$ 289,134
7,698
$ 289,134
$
$
13,859
13,859
$
$
8,809
8,809
$
$
6,616 $
326,116
6,616 $
326,116
(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet
required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar
exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted.
(2)
For purposes of this table, loans in repayment only include loans on which borrowers are making full principal and interest payments after
any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(3)
The period of delinquency is based on the number of days scheduled payments are contractually past due.
F-42 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
Private Education Loans Held for Investment - Key Credit Quality Indicators
FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest in the event of default;
therefore, there are no key credit quality indicators associated with FFELP Loans.
For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan
status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated
through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio
(held for investment), by year of origination approval, stratified by key credit quality indicators.
As of December 31, 2023
(dollars in thousands)
Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination
2023(1)
2022(1)
2021(1)
2020(1)
2019(1)
2018 and
Prior(1)
Total(1)
% of
Balance
Cosigners:
With cosigner
$ 3,903,676
$ 4,428,163
$ 2,516,380
$ 1,535,308
$ 1,378,699
$ 4,529,768
$ 18,291,994
Without cosigner
586,443
660,576
421,042
283,781
253,601
528,407
2,733,850
Total
$ 4,490,119
$ 5,088,739
$ 2,937,422
$ 1,819,089
$ 1,632,300
$ 5,058,175
$ 21,025,844
87 %
13
100 %
FICO at Origination
Approval(2):
Less than 670
$
328,199
$
395,526
$
208,696
$
118,935
$
137,494
$
451,613
$ 1,640,463
8 %
670-699
700-749
635,642
704,642
1,383,779
1,586,783
400,744
934,033
Greater than or equal to 750
2,142,499
2,401,788
1,393,949
254,762
590,401
854,991
257,840
545,333
691,633
868,777
3,122,407
1,709,299
6,749,628
2,028,486
9,513,346
15
32
45
Total
$ 4,490,119
$ 5,088,739
$ 2,937,422
$ 1,819,089
$ 1,632,300
$ 5,058,175
$ 21,025,844
100 %
FICO Refreshed(2)(3):
Less than 670
$
495,451
$
638,381
$
379,738
$
217,956
$
214,665
$
791,875
$ 2,738,066
13 %
670-699
700-749
616,684
672,777
1,347,094
1,477,310
365,674
836,747
Greater than or equal to 750
2,030,890
2,300,271
1,355,263
193,462
498,414
909,257
176,963
445,244
795,428
564,245
2,589,805
1,361,073
5,965,882
2,340,982
9,732,091
12
28
47
Total
$ 4,490,119
$ 5,088,739
$ 2,937,422
$ 1,819,089
$ 1,632,300
$ 5,058,175
$ 21,025,844
100 %
Seasoning(4):
1-12 payments
13-24 payments
25-36 payments
37-48 payments
More than 48 payments
$ 2,514,079
$
740,450
$
440,293
$
245,631
$
208,941
$
332,608
$ 4,482,002
21 %
—
—
—
—
2,675,956
303,045
—
—
—
1,524,834
—
—
167,532
195,091
902,938
116
165,577
129,571
208,521
706,097
213,593
384,760
3,696,870
456,448
2,305,944
446,350
1,557,809
2,985,015
3,691,228
452,994
5,291,991
18
11
7
18
25
Not yet in repayment
1,976,040
1,672,333
669,250
307,781
Total
$ 4,490,119
$ 5,088,739
$ 2,937,422
$ 1,819,089
$ 1,632,300
$ 5,058,175
$ 21,025,844
100 %
2023 Current period(5) gross
charge-offs
2023 Current period(5)
recoveries
2023 Current period(5) net
charge-offs
Total accrued interest by
origination vintage
$
(1,812) $
(31,032) $
(70,331) $
(49,624) $
(50,585) $
(216,711) $
(420,095)
172
2,342
6,496
4,923
5,260
27,175
46,368
$
(1,640) $
(28,690) $
(63,835) $
(44,701) $
(45,325) $
(189,536) $
(373,727)
$
177,959
$
408,800
$
269,978
$
152,094
$
116,618
$
229,116
$ 1,354,565
(1)
(2)
(3)
(4)
(5)
Balance represents gross Private Education Loans held for investment.
Represents the higher credit score of the cosigner or the borrower.
Represents the FICO score updated as of the fourth-quarter 2023.
Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a
scheduled payment was due.
Current period refers to period from January 1, 2023 through December 31, 2023.
2023 Form 10-K — SLM CORPORATION F-43
7. Allowance for Credit Losses (Continued)
As of December 31, 2022
(dollars in thousands)
Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination
2022(1)
2021(1)
2020(1)
2019(1)
2018(1)
2017 and
Prior(1)
Total(1)
% of
Balance
Cosigners:
With cosigner
$ 3,656,111
$ 3,941,921
$ 2,208,033
$ 1,853,619
$ 1,402,828
$ 4,626,491
$ 17,689,003
Without cosigner
620,422
605,238
376,589
319,041
213,014
480,381
2,614,685
Total
$ 4,276,533
$ 4,547,159
$ 2,584,622
$ 2,172,660
$ 1,615,842
$ 5,106,872
$ 20,303,688
87 %
13
100 %
FICO at Origination
Approval(2):
Less than 670
$
326,991
$
307,646
$
158,606
$
177,098
$
143,674
$
439,587
$ 1,553,602
8 %
670-699
700-749
593,216
611,649
1,336,765
1,440,510
356,541
834,819
Greater than or equal to 750
2,019,561
2,187,354
1,234,656
339,685
719,777
936,100
259,142
537,680
675,346
878,426
3,038,659
1,722,068
6,591,619
2,066,791
9,119,808
15
32
45
Total
$ 4,276,533
$ 4,547,159
$ 2,584,622
$ 2,172,660
$ 1,615,842
$ 5,106,872
$ 20,303,688
100 %
FICO Refreshed(2)(3):
Less than 670
$
443,868
$
461,589
$
242,310
$
237,105
$
204,894
$
773,324
$ 2,363,090
12 %
670-699
700-749
594,118
579,784
1,322,558
1,378,910
284,244
748,368
240,999
628,060
Greater than or equal to 750
1,915,989
2,126,876
1,309,700
1,066,496
173,754
449,701
787,493
564,344
2,437,243
1,388,090
5,915,687
2,381,114
9,587,668
12
29
47
Total
$ 4,276,533
$ 4,547,159
$ 2,584,622
$ 2,172,660
$ 1,615,842
$ 5,106,872
$ 20,303,688
100 %
Seasoning(4):
1-12 payments
13-24 payments
25-36 payments
37-48 payments
More than 48 payments
$ 2,448,884
$
636,073
$
384,334
$
330,316
$
235,878
$
424,636
$ 4,460,121
22 %
2,477,764
255,510
1,366,398
195,753
257,534
—
—
—
—
—
—
—
127
1,008,418
—
—
166,045
126,223
224,805
643,611
219,280
455,782
3,550,854
489,157
2,239,312
451,102
1,684,452
2,830,285
3,473,896
455,910
4,895,053
18
11
8
17
24
Not yet in repayment
1,827,649
1,433,322
578,253
380,639
Total
$ 4,276,533
$ 4,547,159
$ 2,584,622
$ 2,172,660
$ 1,615,842
$ 5,106,872
$ 20,303,688
100 %
2022 Current period(5) gross
charge-offs
2022 Current period(5)
recoveries
2022 Current period(5) net
charge-offs
Total accrued interest by
origination vintage
$
(2,224) $
(25,698) $
(48,271) $
(62,071) $
(57,505) $
(231,647) $
(427,416)
124
1,841
4,170
5,556
5,407
24,639
41,737
$
(2,100) $
(23,857) $
(44,101) $
(56,515) $
(52,098) $
(207,008) $
(385,679)
$
142,915
$
315,308
$
207,858
$
184,832
$
116,211
$
210,438
$ 1,177,562
(1)
(2)
(3)
(4)
(5)
Balance represents gross Private Education Loans held for investment.
Represents the higher credit score of the cosigner or the borrower.
Represents the FICO score updated as of the fourth-quarter 2022.
Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment
status) for which a scheduled payment was due.
Current period refers to period from January 1, 2022 through December 31, 2022.
F-44 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
Delinquencies - Private Education Loans Held for Investment
The following tables provide information regarding the loan status of our Private Education Loans held for
investment, by year of origination approval. 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 following tables, do not include those loans while they are in forbearance).
As of December 31, 2023
(dollars in thousands)
2023
2022
2021
2020
2019
2018 and
Prior
Total
Private Education Loans Held for Investment - Delinquencies by Origination Vintage
Loans in-school/grace/deferment(1)
Loans in forbearance(2)
Loans in repayment:
Loans current
Loans delinquent 30-59 days(3)
Loans delinquent 60-89 days(3)
Loans 90 days or greater past due(3)
Total Private Education Loans in
repayment
$ 1,976,040
$ 1,672,333
$ 669,250
$ 307,781
$ 213,593
$ 452,994
$ 5,291,991
19,265
93,079
58,438
35,450
31,818
85,989
324,039
2,469,817
3,254,534
2,131,040
1,416,069
1,323,825
4,213,986
14,809,271
17,599
5,720
1,678
34,627
17,227
16,939
37,147
20,077
21,470
28,020
16,614
15,155
31,432
15,482
16,150
149,926
75,897
79,383
298,751
151,017
150,775
2,494,814
3,323,327
2,209,734
1,475,858
1,386,889
4,519,192
15,409,814
Total Private Education Loans, gross
4,490,119
5,088,739
2,937,422
1,819,089
1,632,300
5,058,175
21,025,844
Private Education Loans deferred
origination costs and unamortized
premium/(discount)
35,616
18,556
9,465
5,809
3,556
8,552
81,554
Total Private Education Loans
4,525,735
5,107,295
2,946,887
1,824,898
1,635,856
5,066,727
21,107,398
Private Education Loans allowance for
losses
(269,642)
(335,090)
(194,104)
(118,755)
(100,111)
(317,403)
(1,335,105)
Private Education Loans, net
$ 4,256,093
$ 4,772,205
$ 2,752,783
$ 1,706,143
$ 1,535,745
$ 4,749,324
$ 19,772,293
Percentage of Private Education Loans in
repayment
Delinquent Private Education Loans in
repayment as a percentage of Private
Education Loans in repayment
Loans in forbearance as a percentage of
loans in repayment and forbearance
55.6 %
65.3 %
75.2 %
81.1 %
85.0 %
89.3 %
73.3 %
1.0 %
0.8 %
2.1 %
2.7 %
3.6 %
2.6 %
4.1 %
2.3 %
4.5 %
2.2 %
6.8 %
1.9 %
3.9 %
2.1 %
(1)
(2)
(3)
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).
Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily
ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
The period of delinquency is based on the number of days scheduled payments are contractually past due.
2023 Form 10-K — SLM CORPORATION F-45
7. Allowance for Credit Losses (Continued)
As of December 31, 2022
(dollars in thousands)
2022
2021
2020
2019
2018
2017 and
Prior
Total
Private Education Loans Held for Investment - Delinquencies by Origination Vintage
Loans in-school/grace/deferment(1)
Loans in forbearance(2)
Loans in repayment:
Loans current
Loans delinquent 30-59 days(3)
Loans delinquent 60-89 days(3)
Loans 90 days or greater past due(3)
Total Private Education Loans in
repayment
Total Private Education Loans, gross
Private Education Loans deferred
origination costs and unamortized
premium/(discount)
Total Private Education Loans
Private Education Loans allowance for
losses
Private Education Loans, net
Percentage of Private Education Loans in
repayment
Delinquent Private Education Loans in
repayment as a percentage of Private
Education Loans in repayment
Loans in forbearance as a percentage of
loans in repayment and forbearance
$ 1,827,649
$ 1,433,322
$ 578,253
$ 380,639
$ 219,280
$ 455,910
$ 4,895,053
16,046
64,360
38,613
37,802
30,583
91,681
279,085
2,411,441
2,991,839
1,907,574
1,683,986
1,301,809
4,262,698
14,559,347
14,164
5,523
1,710
30,740
15,056
11,842
30,877
14,433
14,872
35,213
18,201
16,819
31,366
16,697
16,107
144,948
77,595
74,040
287,308
147,505
135,390
2,432,838
3,049,477
1,967,756
1,754,219
1,365,979
4,559,281
15,129,550
4,276,533
4,547,159
2,584,622
2,172,660
1,615,842
5,106,872
20,303,688
26,714
15,933
9,062
5,496
3,575
8,876
69,656
4,303,247
4,563,092
2,593,684
2,178,156
1,619,417
5,115,748
20,373,344
(304,943)
(323,506)
(181,915)
(141,424)
(101,023)
(300,820)
(1,353,631)
$ 3,998,304
$ 4,239,586
$ 2,411,769
$ 2,036,732
$ 1,518,394
$ 4,814,928
$ 19,019,713
56.9 %
67.1 %
76.1 %
80.7 %
84.5 %
89.3 %
74.5 %
0.9 %
0.7 %
1.9 %
2.1 %
3.1 %
1.9 %
4.0 %
2.1 %
4.7 %
2.2 %
6.5 %
2.0 %
3.8 %
1.8 %
(1)
(2)
(3)
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).
Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily
ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
The period of delinquency is based on the number of days scheduled payments are contractually past due.
F-46 SLM CORPORATION — 2023 Form 10-K
7. Allowance for Credit Losses (Continued)
As of December 31, 2021
(dollars in thousands)
2021
2020
2019
2018
2017
2016 and
Prior
Total
Private Education Loans Held for Investment - Delinquencies by Origination Vintage
Loans in-school/grace/deferment(1)
Loans in forbearance(2)
Loans in repayment(1):
Loans current
Loans delinquent 30-59 days(3)
Loans delinquent 60-89 days(3)
Loans 90 days or greater past due(3)
Total Private Education Loans in
repayment
$ 1,556,550
$ 1,283,523
$
773,320
$
435,657
$
296,008
$
559,356
$
4,904,414
11,951
55,844
52,364
43,613
41,355
96,110
301,237
2,234,876
2,786,646
2,321,728
1,772,651
1,570,815
4,319,057
15,005,773
15,148
3,194
642
29,146
7,441
3,683
46,616
14,044
8,453
43,197
14,310
10,632
41,695
16,425
11,935
132,757
61,533
44,588
308,559
116,947
79,933
2,253,860
2,826,916
2,390,841
1,840,790
1,640,870
4,557,935
15,511,212
Total Private Education Loans, gross
3,822,361
4,166,283
3,216,525
2,320,060
1,978,233
5,213,401
20,716,863
Private Education Loans deferred
origination costs and unamortized
premium/(discount)
22,169
16,067
9,575
5,918
4,588
9,171
67,488
Total Private Education Loans
3,844,530
4,182,350
3,226,100
2,325,978
1,982,821
5,222,572
20,784,351
Private Education Loans allowance for
losses
(248,102)
(239,507)
(195,223)
(129,678)
(99,982)
(246,485)
(1,158,977)
Private Education Loans, net
$ 3,596,428
$ 3,942,843
$ 3,030,877
$ 2,196,300
$ 1,882,839
$ 4,976,087
$ 19,625,374
Percentage of Private Education Loans in
repayment
Delinquent Private Education Loans in
repayment as a percentage of Private
Education Loans in repayment
Loans in forbearance as a percentage of
loans in repayment and forbearance
59.0 %
67.9 %
74.3 %
79.3 %
82.9 %
87.4 %
74.9 %
0.8 %
0.5 %
1.4 %
1.9 %
2.9 %
2.1 %
3.7 %
2.3 %
4.3 %
2.5 %
5.2 %
2.1 %
3.3 %
1.9 %
(1)
(2)
(3)
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).
Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily
ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
The period of delinquency is based on the number of days scheduled payments are contractually past due.
2023 Form 10-K — SLM CORPORATION F-47
7. Allowance for Credit Losses (Continued)
Accrued Interest Receivable
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 on loans making full interest payments. 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 the 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.
(Dollars in thousands)
Private Education Loans
Accrued Interest Receivable
Total Interest
Receivable
90 Days or
Greater
Past Due
Allowance for
Uncollectible
Interest(1)
December 31, 2023
December 31, 2022
$ 1,354,565 $
8,373 $
$ 1,177,562 $
6,609 $
9,897
8,121
(1) The allowance for uncollectible interest at December 31, 2023 and 2022 represents the expected
losses related to the portion of accrued interest receivable on those loans that are in repayment (at
December 31, 2023 and 2022, relates to $151 million and $240 million, respectively, of accrued
interest receivable) that is/was not expected to be capitalized. The accrued interest receivable that
is/was expected to be capitalized ($1.2 billion and $937 million at December 31, 2023 and 2022,
respectively) is reserved in the allowance for credit losses.
F-48 SLM CORPORATION — 2023 Form 10-K
8. Unfunded Loan Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the
borrowing for the entire academic year. 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. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses, — Off-Balance Sheet Exposure for
Contractual Loan Commitments” in this Form 10-K for additional information.
At December 31, 2023, we had $2.2 billion of outstanding contractual loan commitments that we expect to fund
during the remainder of the 2023/2024 academic year. The tables below summarize the activity in the allowance recorded
to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the
consolidated balance sheets, as well as the activity in the unfunded commitments balance.
Years ended December 31,
(dollars in thousands)
Allowance
Unfunded
Commitments
Allowance
Unfunded
Commitments
Allowance
Unfunded
Commitments
2023
2022
2021
Beginning Balance
$ 124,924
$
1,995,808
$
72,713
$
1,776,976 $ 110,044 $
1,673,018
Provision/New commitments
- net(1)
Transfer - funded loans(2)
308,275
6,602,803
396,521
6,180,805
264,324
5,512,841
(320,237)
(6,377,534)
(344,310)
(5,961,973)
(301,655)
(5,408,883)
Ending Balance
$ 112,962
$
2,221,077
$ 124,924
$
1,995,808 $
72,713 $
1,776,976
(1) Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to
provision for existing commitments.
(2) When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for
unfunded commitments) is transferred to the allowance for credit losses.
The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at
each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments.
We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments.
The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to
period based upon the loan characteristics of the underlying commitments.
2023 Form 10-K — SLM CORPORATION F-49
9. Premises and Equipment, net
The following is a summary of our premises and equipment.
As of December 31,
(dollars in thousands)
2023
2022
Land and land improvements
$
12,356
$
12,356
Buildings and leasehold improvements
122,301
122,243
Furniture, fixtures, and equipment
Software
Premises and equipment, gross
34,068
106,422
275,147
32,170
97,140
263,909
Accumulated depreciation
(145,646)
(123,181)
Premises and equipment, net
$ 129,501
$ 140,728
Depreciation expense for premises and equipment was $18 million, $17 million, and $16 million for the years
ended December 31, 2023, 2022, and 2021, respectively.
10. Goodwill and Acquired Intangible Assets
Goodwill
We recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and
liabilities acquired as part of the Nitro acquisition in the first quarter of 2022 and the Scholly acquisition in the third quarter
of 2023. At December 31, 2023, we had $56 million in total goodwill. See Notes to Consolidated Financial Statements,
Note 2, “Significant Accounting Policies — Business Combination,” in this Form 10-K for additional details on our
acquisitions of Nitro and Scholly.
Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the
fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. As a part of the 2023 annual
impairment testing, we conducted a quantitative impairment test of goodwill associated with our education business
services reporting unit. We utilized the income approach to estimate the fair value of the reporting unit. The income
approach measures the value of the reporting unit’s future economic benefit determined by its discounted cash flows
derived from our reporting unit’s internal forecast. Based on the quantitative analysis, we determined that the fair value of
the reporting unit exceeded its carrying value. Thus, no impairment charges were recorded during the year ended
December 31, 2023.
Acquired Intangible Assets
Our intangible assets include acquired trade name and trademarks, customer relationships, developed technology,
and partner relationships. We review our long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable.
In the fourth quarter of 2023, we determined that it was more likely than not that the Nitro trade name and trademark
assets would not be used as originally intended due to changes in business strategy and, therefore, no longer held value.
As a result, the Company performed an impairment review and wrote down the Nitro trade name and trademark to zero,
which resulted in the recognition of a non-cash pre-tax impairment loss of $56 million. That impairment loss was recorded
to acquired intangible assets impairment and amortization expense.
F-50 SLM CORPORATION — 2023 Form 10-K
10. Goodwill and Acquired Intangibles Assets (Continued)
Acquired intangible assets include the following:
(Dollars in thousands)
Trade name and trademarks(2)(3)
Customer relationships(2)
Developed technology(2)
Partner relationships
Useful Life
(in years)(1)
Cost Basis
Accumulated
Amortization
Net
Cost Basis
December 31, 2023
December 31, 2022
Accumulated
Amortization
Net
4.0
4.6
3.5
2.5
$
6,040 $
(629) $
5,411
$
68,470 $
(5,706) $
62,764
8,920
2,590
730
(4,013)
(908)
(122)
4,907
1,682
608
5,670
1,260
—
(1,723)
3,947
(350)
—
910
—
Total acquired intangible assets
$ 18,280 $
(5,672) $ 12,608
$
75,400 $
(7,779) $
67,621
(1) The weighted average useful life of acquired intangible assets related to the Nitro acquisition is 4.3 years and the weighted average useful life of the
acquired intangible assets related to the Scholly acquisition is 3.9 years.
(2) Trade name and trademarks, customer relationships, and developed technology at December 31, 2023 include $6 million, $3 million, and $1 million,
respectively, related to the Scholly acquisition.
(3) In 2023, we fully impaired the Nitro trade name and trademarks asset for $56 million.
We recorded amortization of acquired intangible assets totaling approximately $10 million and $8 million in the years
ended December 31, 2023 and 2022, respectively. We will continue to amortize our intangible assets with definite useful
lives over their remaining estimated useful lives. We estimate amortization expense associated with these intangible
assets will be approximately $5 million, $4 million, $3 million, and $1 million in 2024, 2025, 2026, and 2027.
2023 Form 10-K — SLM CORPORATION F-51
11. Deposits
The following table summarizes total deposits at December 31, 2023 and 2022.
As of December 31,
(dollars in thousands)
Deposits - interest bearing
Deposits - non-interest bearing
Total deposits
2023
2022
$ 21,651,657 $ 21,446,647
1,424
$ 21,653,188 $ 21,448,071
1,531
Our total deposits of $21.7 billion were comprised of $10.3 billion in brokered deposits and $11.4 billion in retail and
other deposits at December 31, 2023, compared with total deposits of $21.4 billion, which were comprised of $9.9 billion
in brokered deposits and $11.5 billion in retail and other deposits, at December 31, 2022.
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 also include
deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be
core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented
$7.6 billion of our deposit total as of December 31, 2023, compared with $8.0 billion at December 31, 2022.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered
CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense
of $12 million, $13 million, and $16 million in the years ended December 31, 2023, 2022, and 2021, respectively. Fees
paid to third-party brokers related to brokered CDs were $8 million, $13 million, and $13 million during the years ended
December 31, 2023, 2022, and 2021, respectively.
Interest bearing deposits at December 31, 2023 and 2022 are summarized as follows:
As of December 31,
(dollars in thousands)
Money market
Savings
Certificates of deposit
Deposits - interest bearing
2023
2022
Year-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Amount
$ 10,258,292
4.85 % $ 10,977,242
3.75 %
945,000
10,448,365
$ 21,651,657
4.35
3.69
982,586
9,486,819
$ 21,446,647
3.15
2.57
(1) Includes the effect of interest rate swaps in effective hedge relationships.
F-52 SLM CORPORATION — 2022 Form 10-K
11. Deposits (Continued)
Certificates of deposit remaining maturities are summarized as follows:
As of December 31,
(dollars in thousands)
One year or less
2023
2022
$ 3,937,766 $ 3,224,573
After one year to two years
4,112,902
2,954,257
After two years to three years
1,881,371
1,904,919
After three years to four years
After four years to five years
After five years
Total
327,295
1,031,881
188,802
324,375
229
46,814
$ 10,448,365 $ 9,486,819
As of December 31, 2023 and 2022, there were $478 million and $615 million, respectively, of deposits exceeding
FDIC insurance limits. Accrued interest on deposits was $91 million and $59 million at December 31, 2023 and 2022,
respectively.
2023 Form 10-K — SLM CORPORATION F-53
12. Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program
and our Secured Borrowing Facility. The issuing entities for those secured borrowings are VIEs and are consolidated for
accounting purposes. The following table summarizes our secured borrowings at December 31, 2023 and 2022.
As of December 31,
(dollars in thousands)
Unsecured borrowings:
2023
2022
Short-Term
Long-Term
Total
Short-Term
Long-Term
Total
Unsecured debt (fixed-rate)
$
— $
992,200 $
992,200 $
— $
988,986 $
988,986
Total unsecured borrowings
—
992,200
992,200
—
988,986
988,986
Secured borrowings:
Private Education Loan term
securitizations:
Fixed-rate
Variable-rate
Total Private Education Loan term
securitizations
Secured Borrowing Facility
—
—
—
—
3,585,254
3,585,254
650,058
650,058
4,235,312
4,235,312
—
—
—
—
—
—
3,462,363
3,462,363
783,765
783,765
4,246,128
4,246,128
—
—
Total secured borrowings
—
4,235,312
4,235,312
—
4,246,128
4,246,128
Total
$
— $ 5,227,512 $ 5,227,512 $
— $ 5,235,114 $ 5,235,114
Short-term Borrowings
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. 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.
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); 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, 2023 and 2022,
there were no outstanding short-term borrowings. The Secured Borrowing Facility also incurs a non-use fee based upon
the facility’s maximum borrowing limit of $2 billion, for both 2023 and 2022, which is applied to the unfunded balance. The
facility non-use fee was 55 basis points and 45 basis points in 2023 and 2022, respectively.
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. At December 31, 2023, the outstanding balance was $497 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. At December 31, 2023, the outstanding balance was $495 million.
F-54 SLM CORPORATION — 2023 Form 10-K
12. Borrowings (Continued)
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.
Pre-2022 Transactions
Prior to 2022, we executed a total of $9.81 billion in ABS transactions that were accounted for as secured financings.
At December 31, 2023, $4.02 billion of our Private Education Loans, including $3.90 billion of principal and $128 million in
capitalized interest, were encumbered as a result of these transactions.
The following table summarizes the outstanding long-term borrowings, the weighted average interest rates at the
end of the period and the related average balance during the period. Rates reflect stated interest of borrowings and
related discounts and premiums. The long-term borrowings amortize over time and mature serially from 2025 to 2053.
December 31, 2023
Ending
Balance
Weighted
Average
Interest
Rate
Year Ended
December
31, 2023
December 31, 2022
Average
Balance
Ending
Balance
Weighted
Average
Interest
Rate
Year Ended
December
31, 2022
Average
Balance
(Dollars in thousands)
Long-term borrowings:
Floating-rate borrowings
$ 650,058
6.51 % $ 715,409
$ 783,765
5.26 % $ 898,002
Fixed-rate borrowings
4,577,454
3.52
4,605,806
4,451,349
2.93
4,571,690
Total long-term borrowings
$ 5,227,512
3.89 % $ 5,321,215
$ 5,235,114
3.28 % $ 5,469,692
2023 Form 10-K — SLM CORPORATION F-55
12. Borrowings (Continued)
As of December 31, 2023, the maturities of our brokered CDs and borrowings are summarized below.
As of December 31, 2023
(dollars in thousands)
Brokered
CDs
Unsecured
Debt
Secured
Borrowings(1)
Total
2024
2025
2026
2027
2028
$ 2,385,510 $
— $
721,038 $ 3,106,548
2,768,889
497,567
710,111
3,976,567
1,832,740
494,633
663,588
2,990,961
151,131
146,459
—
—
592,381
496,386
743,512
642,845
2029 and after
—
—
1,051,808
1,051,808
7,284,729
992,200
4,235,312
12,512,241
Hedge accounting
adjustments
(1,306)
—
—
(1,306)
Total
$ 7,283,423 $ 992,200 $ 4,235,312 $ 12,510,935
(1) We view our secured borrowings as long-term based on the contractual maturity
dates ranging from 2031 to 2053. However, the actual maturity of our secured
borrowings depends on the prepayment speeds of the underlying collateralized loans.
To disclose how we expect this debt to pay down over time, the maturities for our
secured borrowings are based on the projected bond principal paydowns using the
current estimated loan prepayment speeds.
Secured Financings
The following summarizes our secured financings issued in 2022 and 2023:
Issue
Date Issued
Total Issued
Weighted Average
Cost of Funds(1)
Weighted
Average Life
(in years)
(Dollars in thousands)
Private Education Loans:
2022-C
August 2022
Total notes issued in 2022
Total loan and accrued interest amount
securitized at inception in 2022(2)
2023-A
2023-C
March 2023
August 2023
$
$
$
$
SOFR plus 1.76%
4.69
575,000
575,000
674,387
579,000
568,000
SOFR plus 1.53%
SOFR plus 1.69%
5.06
4.93
Total notes issued in 2023
$
1,147,000
Total loan and accrued interest amount
securitized at inception in 2023(3)
$
1,292,507
(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.
(2) At December 31, 2023, $543 million of our Private Education Loans, including $513 million of principal and $30 million in
capitalized interest, were encumbered related to these transactions.
(3) At December 31, 2023, $1.21 billion of our Private Education Loans, including $1.13 billion of principal and $81 million in
capitalized interest, were encumbered related to these transactions.
F-56 SLM CORPORATION — 2023 Form 10-K
12. Borrowings (Continued)
Consolidated Funding Vehicles
We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a
result, these financing VIEs are accounted for as secured borrowings.
As of December 31, 2023
(dollars in thousands)
Secured borrowings:
Private Education Loan
term securitizations
Secured Borrowing
Facility
Total
As of December 31, 2022
(dollars in thousands)
Secured borrowings:
Private Education Loan
term securitizations
Secured Borrowing
Facility
Total
Debt Outstanding
Carrying Amount of Assets Securing Debt Outstanding
Short-Term
Long-Term
Total
Loans
Restricted
Cash
Other
Assets(1)
Total
$
$
— $ 4,235,312 $ 4,235,312 $ 5,539,964 $ 149,412 $
311,697 $ 6,001,073
—
—
—
—
—
1,066
1,066
— $ 4,235,312 $ 4,235,312 $ 5,539,964 $ 149,412 $
312,763 $ 6,002,139
Debt Outstanding
Carrying Amount of Assets Securing Debt Outstanding
Short-Term
Long-Term
Total
Loans
Restricted
Cash
Other
Assets(1)
Total
$
$
— $ 4,246,128 $ 4,246,128 $ 5,433,602 $ 156,719 $
286,093 $ 5,876,414
—
—
—
—
—
1,066
1,066
— $ 4,246,128 $ 4,246,128 $ 5,433,602 $ 156,719 $
287,159 $ 5,877,480
(1) Other assets primarily represent accrued interest receivable.
Unconsolidated VIEs
Private Education Loan Securitizations
Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our
Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable
servicing agreements executed in connection with the sales, and we are also the administrator of these trusts.
Additionally, we own five percent of the securities issued by the trusts to meet risk retention requirements. We were not
required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with
our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we
maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an
insignificant amount of the VIE’s expected residual returns.
2023-B Transaction
On May 24, 2023, we closed an SMB Private Education Loan Trust 2023-B term ABS transaction (the “2023-B
Transaction”), in which an unaffiliated third party sold to the trust approximately $2 billion of Private Education Loans that
the third-party seller previously purchased from us on May 3, 2023. Sallie Mae Bank sponsored the 2023-B Transaction, is
the servicer and administrator, and was the seller of an additional $105 million of Private Education Loans into the trust.
The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the
settlement date of the 2023-B Transaction and we recorded a $5 million gain on sale associated with this transaction. In
connection with the 2023-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five
percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2023-
B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a
trading investment recorded at fair value with changes recorded through earnings.
2023 Form 10-K — SLM CORPORATION F-57
12. Borrowings (Continued)
2023-D Transaction
On November 7, 2023, we closed an SMB Private Education Loan Trust 2023-D term ABS transaction (the “2023-D
Transaction”), in which an unaffiliated third party sold to the trust approximately $1.0 billion of Private Education Loans
that the third-party seller previously purchased from us on October 13, 2023. Sallie Mae Bank sponsored the 2023-D
Transaction, is the servicer and administrator, and was the seller of an additional $53 million of Private Education Loans
into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance
sheet on the settlement date of the 2023-D Transaction and we recorded a $1 million gain on sale associated with this
transaction. In connection with the 2023-D Transaction settlement, we retained a five percent vertical risk retention interest
(i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to
the 2023-D Transaction as available-for-sale investments, except for the interest in the residual class, which we classified
as a trading investment recorded at fair value with changes recorded through earnings.
2022-A Transaction
On March 16, 2022, we closed an SMB Private Education Loan Trust 2022-A term ABS transaction (the “2022-A
Transaction”), in which an unaffiliated third party sold to the trust approximately $973 million of Private Education Loans
that the third-party seller previously purchased from us on November 17, 2021. In the 2022-A Transaction, we were the
sponsor, servicer and administrator, and the seller of an additional $95 million of Private Education Loans into the trust.
The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the
settlement date of the 2022-A Transaction and we recorded a $10 million gain on sale associated with this transaction. In
connection with the 2022-A Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five
percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-A
Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading
investment recorded at fair value with changes recorded through earnings.
2022-B Transaction
On May 27, 2022, we closed an SMB Private Education Loan Trust 2022-B term ABS transaction (the “2022-B
Transaction”), in which an unaffiliated third party sold to the trust approximately $2.0 billion of Private Education Loans
that the third-party seller previously purchased from us on April 27, 2022. In the 2022-B Transaction, we were the sponsor,
servicer and administrator, and the seller of an additional $107 million of Private Education Loans into the trust. The sale
of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement
date of the 2022-B Transaction and we recorded an $11 million gain on sale associated with this transaction. In
connection with the 2022-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five
percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-
B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a
trading investment recorded at fair value with changes recorded through earnings.
2022-D Transaction
On October 19, 2022, we closed an SMB Private Education Loan Trust 2022-D term ABS transaction (the “2022-D
Transaction”), in which an unaffiliated third party sold to the trust approximately $1.0 billion of Private Education Loans
that the third-party seller previously purchased from us on September 15, 2022. In the 2022-D Transaction, we were the
sponsor, servicer and administrator, and the seller of an additional $54 million of Private Education Loans into the trust.
The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the
settlement date of the 2022-D Transaction and we recorded a $3 million gain on sale associated with this transaction. In
connection with the 2022-D Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five
percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-
D Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a
trading investment recorded at fair value with changes recorded through earnings.
The table below provides a summary of our exposure related to our unconsolidated VIEs.
2023
2022
As of December 31,
(dollars in thousands)
Debt
Interests(1)
Equity
Interests(2)
Total
Exposure
Debt
Interests(1)
Equity
Interests(2)
Total
Exposure
Private Education Loan
term securitizations
$ 423,327
$ 54,481
$ 477,808
$ 329,188
$ 50,786
$ 379,974
(1) Vertical risk retention interest classified as available-for-sale investment.
(2) Vertical risk retention interest classified as trading investment.
F-58 SLM CORPORATION — 2023 Form 10-K
12. Borrowings (Continued)
Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which
totaled $125 million at December 31, 2023. The interest rate we are charged on these lines of credit is priced at Fed
Funds plus a spread at the time of borrowing, and is payable daily. We did not utilize these lines of credit in the years
ended December 31, 2023 and 2022.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing
facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available
to depository institutions that are in generally sound financial condition. 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. Generally, collateral value is assigned based on
the estimated fair value of the pledged assets. At December 31, 2023 and December 31, 2022, the value of our pledged
collateral at the FRB totaled $1.6 billion and $2.2 billion, respectively. The interest rate charged to us is the discount rate
set by the FRB. We did not utilize this facility in the years ended December 31, 2023 and 2022.
13. Derivative Financial Instruments
Risk Management Strategy
We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to
reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the
repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse
impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate
fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash
flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this
unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this
strategy as a prudent management of interest rate risk.
Although we use derivatives to reduce the risk of interest rate changes, the use of derivatives does expose us to
both market and credit risk. Market risk is the chance of financial loss resulting from changes in interest rates and market
liquidity. Credit risk is the risk that a counterparty will not perform its obligations under a contract and it is limited to the
loss of the fair value gain in a derivative that the counterparty owes us less collateral held and plus collateral posted.
When the fair value of a derivative contract less collateral held and plus collateral posted is negative, we owe the
counterparty and, therefore, we have no credit risk exposure to the counterparty; however, the counterparty has exposure
to us. We minimize the credit risk in derivative instruments by entering into transactions with reputable counterparties that
are reviewed regularly by our Credit Department. We also maintain a policy of requiring that all derivative contracts be
governed by an International Swaps and Derivatives Association, Inc. Master Agreement. Depending on the nature of the
derivative transaction, bilateral collateral arrangements are required as well. When we have more than one outstanding
derivative transaction with the counterparty, and there exists legally enforceable netting provisions with the counterparty
(i.e., a legal right to offset receivable and payable derivative contracts), the “net” mark-to-market exposure, less collateral
held and plus collateral posted, represents exposure with the counterparty. We refer to this as the “net position.” When
there is a net negative exposure, we consider our exposure to the counterparty and the net position to be zero.
Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be
submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are
the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for
as legal settlement. As of 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.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts
as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin
included as settlement as of December 31, 2023 was $(40) million and $(4) million for the CME and LCH, respectively.
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. 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.
2023 Form 10-K — SLM CORPORATION F-59
13. Derivative Financial Instruments (Continued)
Accounting for Derivative Instruments
The accounting for derivative instruments requires that every derivative instrument, including certain derivative
instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at fair
value. Our derivative instruments are classified and accounted for by us as fair value hedges, cash flow hedges, and
trading hedges.
Fair Value Hedges
We generally use fair value hedges to offset the exposure to changes in fair value of a recognized fixed-rate liability.
We enter into interest rate swaps to economically convert fixed-rate liabilities into variable-rate liabilities. For fair value
hedges, we generally consider all components of the derivative’s gain and/or loss when assessing hedge effectiveness
and generally hedge changes in fair values due to interest rates. For fair value hedges, the entire change in the fair value
of the hedging instrument included in the assessment of hedge effectiveness is recorded in the same line item in the
consolidated statements of income that is used to present the earnings effect of the hedged component of the hedged
item.
Cash Flow Hedges
We use cash flow hedges to hedge the exposure to variability in cash flows of floating-rate liabilities. This strategy is
used primarily to minimize the exposure to volatility in cash flows from future changes in interest rates. In assessing hedge
effectiveness, generally all components of each derivative’s gains or losses are included in the assessment. We hedge
exposure to changes in cash flows due to changes in interest rates or total changes in cash flow. For cash flow hedges,
the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is
recorded in other comprehensive income (loss). Those amounts are subsequently reclassified to earnings, in the same
line item in the consolidated statements of income as impacted by the hedged item, when the hedged item affects
earnings.
Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to
interest expense as interest payments are made on our variable-rate deposits. During the next twelve months, we
estimate that $36 million will be reclassified as a decrease to interest expense.
Trading Activities
When derivative instruments do not qualify for hedge accounting treatment, they are accounted for at fair value with
all changes in fair value recorded through earnings. All of our derivative instruments entered into with maturities of less
than three years are economically hedging risk, but do not receive hedge accounting treatment. Trading derivatives also
include any hedges that originally received hedge accounting treatment, but lost hedge accounting treatment due to failed
effectiveness testing, as well as the activity of certain derivatives prior to those derivatives receiving hedge accounting
treatment.
F-60 SLM CORPORATION — 2023 Form 10-K
13. Derivative Financial Instruments (Continued)
Summary of Derivative Financial Statement Impact
The following tables summarize the fair values and notional amounts of all derivative instruments at December 31,
2023 and 2022, and their impact on earnings and other comprehensive income for the years ended December 31, 2023,
2022, and 2021.
Impact of Derivatives on the Consolidated Balance Sheets
As of December 31,
(dollars in thousands)
Fair Values(1)
Derivative Assets:(2)
Interest rate swaps
Derivative
Liabilities:(2)
Interest rate swaps
Hedged
Risk
Exposure
Interest
rate
Interest
rate
Cash Flow Hedges
Fair Value Hedges
Trading
Total
2023
2022
2023
2022
2023
2022
2023
2022
$
— $
972 $
— $
— $
— $
— $
— $
972
(339)
—
(31)
(567)
—
—
(370)
(567)
Total net derivatives
$
(339) $
972 $
(31) $
(567) $
— $
— $
(370) $
405
(1)
Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master
netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other
assets or other liabilities depending on whether in a net positive or negative position.
(2)
The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
As of December 31,
(dollars in thousands)
Gross position(1)
Impact of master netting agreement
Derivative values with impact of master
netting agreements (as carried on
balance sheet)
Cash collateral pledged(2)
Other Assets
Other Liabilities
2023
2022
2023
2022
$
— $
—
972 $
(370) $
(567)
—
(567)
567
Net position
$
9,228 $
11,567 $
(370) $
—
9,228
405
11,162
(370)
—
—
—
—
__________
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract.
(2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.
Notional Values
As of December 31,
(dollars in
thousands)
Interest rate
swaps
Net total
notional
Cash Flow
Fair Value
Trading
Total
2023
2022
2023
2022
2023
2022
2023
2022
$ 1,203,783 $ 1,314,660 $ 702,309 $ 1,528,186 $
— $
— $ 1,906,092 $ 2,842,846
$ 1,203,783 $ 1,314,660 $ 702,309 $ 1,528,186 $
— $
— $ 1,906,092 $ 2,842,846
2023 Form 10-K — SLM CORPORATION F-61
13. Derivative Financial Instruments (Continued)
As of December 31, 2023 and 2022, the following amounts were recorded on the consolidated balance sheet related
to cumulative basis adjustments for fair value hedges:
As of December 31,
(dollars in thousands)
Line Item in the Balance Sheet in Which
the Hedged Item is Included:
Carrying Amount of the
Hedged Assets/(Liabilities)
Cumulative Amount of Fair
Value Hedging Adjustment
Included in the Carrying
Amount of the Hedged
Assets/(Liabilities)
2023
2022
2023
2022
Deposits
$
(689,137) $ (1,494,087) $
12,910 $
31,259
Impact of Derivatives on the Consolidated Statements of Income
Years Ended December 31,
(dollars in thousands)
Fair Value Hedges
Interest rate swaps:
2023
2022
2021
Interest recognized on derivatives
$
(26,054) $
16,308 $
85,850
Hedged items recorded in interest expense
(18,350)
82,043
103,450
Derivatives recorded in interest expense
18,487
(82,063)
(103,431)
Total
$
(25,917) $
16,288 $
85,869
Cash Flow Hedges
Interest rate swaps:
Amount of gain (loss) reclassified from
accumulated other comprehensive income
into interest expense
Total
Trading
Interest rate swaps:
Change in fair value of future interest
payments recorded in earnings
Total
Total
$
$
$
$
47,810 $
3,658 $
(20,852)
47,810 $
3,658 $
(20,852)
— $
(248) $
(23,216)
—
(248)
(23,216)
21,893 $
19,698 $
41,801
F-62 SLM CORPORATION — 2023 Form 10-K
13. Derivative Financial Instruments (Continued)
Impact of Derivatives on the Statements of Changes in Stockholders’ Equity
Years Ended December 31,
(dollars in thousands)
2023
2022
2021
Amount of gain (loss) recognized in other comprehensive
income (loss)
$
13,353 $
97,389 $
27,259
Less: Amount of gain (loss) reclassified in interest expense
47,810
3,658
(20,852)
Total change in other comprehensive income (loss) for
unrealized gains (losses) on derivatives, before income tax
(expense) benefit
$
(34,457) $
93,731 $
48,111
Cash Collateral
As of December 31, 2023, cash collateral held and pledged excludes amounts that represent legal settlement of the
derivative contracts held with the CME and LCH. There was no cash collateral held by us related to derivative exposure
between us and our derivatives counterparties at December 31, 2023 and 2022, respectively. Collateral held is recorded
in “Other Liabilities” on the consolidated balance sheets. Cash collateral pledged related to derivative exposure between
us and our derivatives counterparties was $9 million and $11 million at December 31, 2023 and 2022, respectively.
Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.
14. Stockholders’ Equity
Preferred Stock
At December 31, 2023, we had 2.5 million shares of Floating-Rate Non-Cumulative Preferred Stock, Series B (the
“Series B Preferred Stock”) outstanding. The Series B Preferred Stock does not have a maturity date, but can be
redeemed at our option. Redemption would include any accrued and unpaid dividends for the then current quarterly
dividend period, up to the redemption date. The shares have no preemptive or conversion rights and are not
exchangeable for any of our other securities or property. Dividends are not mandatory and are paid quarterly, when, as,
and if declared by the Board of Directors. Holders of Series B Preferred Stock were entitled to receive quarterly dividends
based on 3-month LIBOR plus 170 basis points per annum in arrears, until the transition to SOFR in the third quarter of
2023. The first dividends on our Series B Preferred Stock that were based on a SOFR rate were declared dividends paid
on December 15, 2023, which were based on the adjusted 3-month CME Term SOFR plus 170 basis points per annum in
arrears, where the adjusted 3-month CME Term SOFR includes the LIBOR Benchmark Replacement Adjustment of
26.161 basis points. Upon liquidation or dissolution of the Company, holders of the Series B Preferred Stock are entitled to
receive $100 per share, plus an amount equal to accrued and unpaid dividends for the then current quarterly dividend
period, pro rata, and before any distribution of assets is made to holders of our common stock.
Common Stock
Our shareholders have authorized the issuance of 1.125 billion shares of common stock (par value of $0.20). At
December 31, 2023, 220 million shares were issued and outstanding and 36 million shares were unissued but
encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend
equivalent units for employee compensation and remaining authority for stock-based compensation plans.
Common Stock Dividends
In both the years ended December 31, 2023 and 2022, we paid a total common stock dividend of $0.44 per common
share. In the year ended December 31, 2021, we paid a total common stock dividend of $0.20 per common share.
Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors. We
may change our common stock dividend policy at any time.
We are dependent on funds obtained from the Bank to fund dividend payments. Regulatory and other legal
restrictions may limit our ability to transfer funds freely, either to or from our subsidiaries. In particular, the Bank is subject
to laws and regulations that authorize regulatory bodies to block or reduce the flow of funds to us, or that prohibit such
transfers altogether in certain circumstances. These laws, regulations, and rules may hinder our ability to access funds
that we may need to make payments in respect of our stock or to satisfy our other responsibilities. The FDIC has the
authority to prohibit or limit the payment of dividends by the Bank and SLM Corporation.
2023 Form 10-K — SLM CORPORATION F-63
14. Stockholders’ Equity (Continued)
Share Repurchases
On January 22, 2020, we announced a share repurchase program (the “2020 Share Repurchase Program”), which
was effective upon announcement and expired on January 21, 2022, and permitted us to repurchase shares of common
stock from time to time up to an aggregate repurchase price not to exceed $600 million.
Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an accelerated
share repurchase agreement (“ASR”) with a third-party financial institution under which we paid $525 million for an upfront
delivery of our common stock and a forward agreement. On March 11, 2020, the third-party financial institution delivered
to us approximately 45 million shares. The final total actual number of shares of common stock delivered to us pursuant to
the forward agreement was based generally upon a volume-weighted average price at which the shares of our common
stock traded during the regular trading sessions on the NASDAQ Global Select Market during the term of the ASR. The
transactions were accounted for as equity transactions and were included in treasury stock when the shares were
received, at which time there was an immediate reduction in the weighted average common shares calculation for basic
and diluted earnings per share. On January 26, 2021, we completed the ASR and upon final settlement on January 28,
2021, we received an additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average
price per share of $9.01. Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares
of common stock for $75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020
Share Repurchase Program.
On January 27, 2021, we announced another share repurchase program (the “2021 Share Repurchase Program”),
which was effective upon announcement and expired on January 26, 2023, and originally permitted us to repurchase
shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion.
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that could
be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in addition to
the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program
authorization of $1.5 billion. Of the total $1.5 billion 2021 Share Repurchase Program authorization, we repurchased
81.1 million shares of common stock for $1.46 billion in the year ended December 31, 2021. (Those amounts include the
shares repurchased under the Tender Offer described below.) We also repurchased 2.0 million shares of common stock
under the 2021 Share Repurchase Program for $38 million in the three months ended March 31, 2022. We have utilized
all capacity under the 2021 Share Repurchase Program.
On January 26, 2022, we announced another share repurchase program (the “2022 Share Repurchase Program”),
which was effective upon announcement and expired on January 25, 2024, and permitted us to repurchase shares of our
common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion. Under the 2022 Share
Repurchase Program, we repurchased 22.3 million shares of common stock at an average price per share of $15.64, for
$349 million in the year ended December 31, 2023, and we repurchased 38.2 million shares of common stock at an
average price per share of $17.52, for $669 million in the year ended December 31, 2022. There was $236 million of
capacity remaining under the 2022 Share Repurchase Program at December 31, 2023. Any capacity remaining unused
under the 2022 Share Repurchase Program on January 25, 2024 expired on that date pursuant to the terms of the 2022
Share Repurchase Program.
On January 24, 2024, we announced a new share repurchase program (the “2024 Share Repurchase Program”),
which became effective on January 26, 2024 and expires on February 6, 2026, and permits us to repurchase shares of
our common stock from time to time up to an aggregate repurchase price not to exceed $650 million.
Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety of
methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block
purchases, accelerated share repurchase programs, tender offers, or other similar transactions. The timing and volume of
any repurchases will be subject to market conditions, and there can be no guarantee that the Company will repurchase up
to the limit of the 2024 Share Repurchase Program or at all.
Common Stock Tender Offer
On February 2, 2021, we announced the commencement of a “modified Dutch Auction” tender offer (the “Tender
Offer”) to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value
$0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The
purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and
expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer.
This cancellation decreased the balances of common stock by $6 million and of additional paid-in capital by $466 million,
respectively.
F-64 SLM CORPORATION — 2023 Form 10-K
14. Stockholders’ Equity (Continued)
Share Repurchases under our Rule 10b5-1 Trading Plans
During the years ended December 31, 2023, 2022, and 2021, we repurchased 22 million, 40 million, and 57 million
shares, respectively, of our common stock at a total cost of $349 million, $708 million, and $1.1 billion, respectively, under
Rule 10b5-1 trading plans authorized under our share repurchase programs.
The following table summarizes our common share repurchases and issuances associated with these programs.
Years Ended December 31,
(shares and per share amounts in actuals)
Common stock repurchased under repurchase
programs(1)(2)(3)
Average purchase price per share(4)
Shares repurchased related to employee stock-based
compensation plans(5)
Average purchase price per share
Common shares issued(6)
2023
2022
2021
22,341,595
40,253,548
98,748,905
$
15.64
$
17.58
$
17.37
1,099,241
$
15.46
3,109,276
1,135,509
$
18.36
3,107,768
$
1,368,942
14.70
3,786,581
(1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 2021 Share Repurchase
Program. There was $236 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2023.
(2) For the year ended December 31, 2021, the amount includes 13 million shares related to the accelerated share repurchase agreement
described above.
(3) For the year ended December 31, 2021, the amount includes 28.5 million shares related to the settlement of our common stock Tender
Offer described above.
(4)
Average purchase price per share includes purchase commission costs and excise taxes.
(5) Comprised of shares withheld from stock option exercises and vesting of restricted stock for employees’ tax withholding obligations and
shares tendered by employees to satisfy option exercise costs.
(6) Common shares issued under our various compensation and benefit plans.
The closing price of our common stock on the NASDAQ Global Select Market on December 29, 2023 was $19.12.
2023 Form 10-K — SLM CORPORATION F-65
15. Earnings per Common Share
Basic earnings per common share (“EPS”) are calculated using the weighted average number of shares of common
stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS
calculations follows.
Years ended December 31, (dollars in thousands, except per share data)
2023
2022
2021
Numerator:
Net income
Preferred stock dividends
$
581,391 $
469,014 $
1,160,513
17,705
9,029
4,736
Net income attributable to SLM Corporation common stock
$
563,686 $
459,985 $
1,155,777
Denominator:
Weighted average shares used to compute basic EPS
231,411
258,439
314,993
Effect of dilutive securities:
Dilutive effect of stock options, restricted stock, restricted stock units,
performance stock units, and Employee Stock Purchase Plan
(“ESPP”) (1)(2)
Weighted average shares used to compute diluted EPS
Basic earnings per common share
Diluted earnings per common share
2,652
234,063
3,064
261,503
4,919
319,912
$
$
2.44 $
1.78 $
3.67
2.41 $
1.76 $
3.61
(1) Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted
stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the
treasury stock method.
(2) For the years ended December 31, 2023, 2022, and 2021, securities covering approximately 1 million shares, 1 million shares, and 1 million
shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
F-66 SLM CORPORATION — 2023 Form 10-K
16. Stock-Based Compensation Plans and Arrangements
Plan Summaries
As of December 31, 2023, we had one active stock-based compensation plan that provides for grants of equity
awards to our employees and non-employee directors.
The SLM Corporation 2021 Omnibus Incentive Plan was approved by shareholders on June 8, 2021, and at
December 31, 2023, 16 million shares were authorized to be issued from this plan.
We also maintain an Employee Stock Purchase Plan (the “ESPP”). The number of shares authorized under the plan
at December 31, 2023 was 14 million shares.
Shares issued under these stock-based compensation plans may be either shares reacquired by us or shares that
are authorized but unissued.
Stock-Based Compensation
The total stock-based compensation cost recognized in the consolidated statements of income for the years ended
December 31, 2023, 2022, and 2021 was $36 million, $34 million, and $31 million, respectively. As of December 31, 2023,
there was $22 million of total unrecognized compensation expense related to unvested restricted stock awards, restricted
stock units, performance stock units, and ESPP awards, which is expected to be recognized over a weighted average
period of 1.4 years. We amortize compensation expense on a straight-line basis over the related vesting periods of each
tranche of each award.
Stock Options
There were 998,891 time-vested options granted in the year ended December 31, 2021. The options were granted
solely to members of senior management. The exercise price of the options is equal to 115 percent of the fair market
value of a share of our common stock as of the grant date. The options will vest 100 percent on the third anniversary of
the respective grant date and expire ten years after the respective grant date. The fair value of each stock option grant
was estimated on the date of grant using the Monte Carlo simulation-pricing model. The expected volatility of our common
stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on
historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based
on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates
consistent with the expected life of each stock option grant.
There were 86,536 time-vested options granted in the year ended December 31, 2022. The options were granted to
team members of an acquisition that took place in the first half of the year in 2022. The exercise price of the options is
equal to 100 percent of the fair market value of a share of our common stock as of the grant date. The options will vest
100 percent on the third anniversary of the respective grant date and expire ten years after the respective grant date. The
fair value of each stock option grant was estimated on the date of grant using a Black-Scholes option pricing model. The
expected volatility of our common stock at the date of grant is estimated based on a historic volatility rate and the
expected option life is calculated based on historical stock option experience as the best estimate of future exercise
patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate
assumption is based on observed interest rates consistent with the expected life of each stock option grant.
There were no stock options granted in the year ended December 31, 2023.
2023 Form 10-K — SLM CORPORATION F-67
16. Stock-Based Compensation Plans and Arrangements (Continued)
The following table summarizes stock option activity for the year ended December 31, 2023.
(Dollars in thousands, shares and per share
amounts in actuals)
Number of
Options
Weighted
Average
Exercise
Price per
Share
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
(1)
Value
Outstanding at December 31, 2022
1,066,197 $
17.59
Granted
Exercised(2)
Canceled
Outstanding at December 31, 2023(3)
—
—
—
—
—
—
1,066,197 $
17.59
0.2 years $
1,629
Exercisable at December 31, 2023
— $
—
— $
—
(1)
(2)
(3)
The aggregate intrinsic value represents the total intrinsic value (the aggregate difference between our
closing stock price on December 31, 2023 and the exercise price of in-the-money options) that would have
been received by the option holders if all in-the-money options had been exercised on December 31, 2023.
No options were exercised in the years ended December 31, 2023 and 2022. The total intrinsic value of
options exercised was $2 million for the year ended December 31, 2021.
For net-settled options, gross number is reflected.
Restricted Stock
Restricted stock awards generally vest over one year. Outstanding restricted stock is entitled to dividend equivalent
units that vest subject to the same vesting requirements or lapse of transfer restrictions, as applicable, as the underlying
restricted stock award. The fair value of restricted stock awards is based on our stock price at the grant date.
The following table summarizes restricted stock activity for the year ended December 31, 2023.
(Shares and per share amounts in actuals)
Non-vested at December 31, 2022
Granted
Vested(1)
Canceled
Non-vested at December 31, 2023(2)
Number of
Shares
Weighted
Average Grant
Date
Fair Value
79,710 $
83,479
(79,710)
—
15.68
16.47
15.68
—
83,479 $
16.47
(1)
(2)
The total fair value of shares that vested during the years ended December 31, 2023,
2022, and 2021 was $1 million, $1 million, and $1 million, respectively.
As of December 31, 2023, there was $0.6 million of unrecognized compensation cost
related to restricted stock, which is expected to be recognized over a weighted average
period of 0.5 years.
F-68 SLM CORPORATION — 2023 Form 10-K
16. Stock-Based Compensation Plans and Arrangements (Continued)
Restricted Stock Units and Performance Stock Units
Restricted stock units (“RSUs”) and performance stock units (“PSUs”) are equity awards granted to employees that
entitle the holder to shares of our common stock when the award vests. RSUs may be time-vested over three years or
vested at grant but subject to transfer restrictions, while PSUs vest based on corporate performance targets at the end of
a three-year period.
Outstanding RSUs and PSUs are entitled to dividend equivalent units that vest subject to the same vesting
requirements or lapse of transfer restrictions, as applicable, as the underlying award. The fair value of RSUs is based on
our stock price at the grant date. The fair value of each PSU grant was estimated on the date of grant using the Monte
Carlo simulation-pricing model.
The following table summarizes RSU and PSU activity for the year ended December 31, 2023.
(Shares and per share amounts in actuals)
Number of
RSUs/
PSUs
Weighted
Average Grant
Date
Fair Value
Outstanding at December 31, 2022
4,248,945 $
Granted
Vested and converted to common stock(1)
Canceled
Outstanding at December 31, 2023(2)
2,932,239
(2,746,671)
(87,519)
4,346,994 $
15.44
14.30
12.68
16.63
16.39
(1)
(2)
The total fair value of RSUs/PSUs that vested and converted to common stock
during the years ended December 31, 2023, 2022, and 2021 was $35 million,
$34 million, and $31 million, respectively.
As of December 31, 2023, there was $21 million of unrecognized compensation
cost related to RSUs/PSUs, which is expected to be recognized over a weighted
average period of 1.5 years.
Employee Stock Purchase Plan
Employees may purchase shares of our common stock at the end of a 12-month offering period at a price equal to
the share price at the beginning of the 12-month period, less 15 percent, up to a maximum purchase price of $7,500
(whole dollars). The purchase price for each offering is determined at the beginning of the offering period on August 1.
The fair values of the stock purchase rights of the ESPP offerings were calculated using a Black-Scholes option
pricing model with the following weighted average assumptions:
Years ended December 31, (per share amounts in
actuals)
2023
2022
2021
Risk-free interest rate
Expected volatility
Expected dividend rate
Expected life of the option
5.31 %
38 %
2.73 %
1 year
3.02 %
39 %
2.78 %
1 year
0.07 %
34 %
0.66 %
1 year
Weighted average fair value of stock purchase
rights
$
4.14
$
4.17
$
4.93
The expected volatility is based on implied volatility from publicly-traded options on our stock at the grant date and
historical volatility of our stock consistent with the expected life. The risk-free interest rate is based on the zero-coupon
U.S. Treasury STRIPS rate at the grant date consistent with the expected life.
The fair values were amortized to compensation cost on a straight-line basis over a one-year vesting period. As of
December 31, 2023, there was less than $1 million of unrecognized compensation cost related to the ESPP, which is
expected to be recognized by July 2024.
2023 Form 10-K — SLM CORPORATION F-69
16. Stock-Based Compensation Plans and Arrangements (Continued)
During the years ended December 31, 2021 and 2023, plan participants purchased approximately 496,000 shares
and 195,000 shares, respectively, of our common stock. No shares were purchased for the year ended December 31,
2022, as our stock price on July 31, 2022 was less than the offering price for the ESPP plan.
17. Fair Value Measurements
We use estimates of fair value in applying various accounting standards for the consolidated financial statements.
We categorize our fair value estimates based on a hierarchical framework associated with three levels of price
transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for
determining fair value and the hierarchical framework, see Note 2, “Significant Accounting Policies — Fair Value
Measurement” in this Form 10-K.
The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring
basis.
As of December 31,
(dollars in thousands)
Assets:
Fair Value Measurements on a Recurring Basis
2023
2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Trading investments
$ — $
— $ 54,481 $
54,481 $ — $
— $ 55,903 $
55,903
Available-for-sale
investments
—
2,411,622
—
2,411,622
—
2,342,089
—
2,342,089
Derivative instruments
—
—
—
—
—
972
—
972
Total
$ — $ 2,411,622 $ 54,481 $ 2,466,103 $ — $ 2,343,061 $ 55,903 $ 2,398,964
Liabilities:
Derivative instruments
$ — $
(370) $
Total
$ — $
(370) $
— $
— $
(370) $ — $
(567) $
(370) $ — $
(567) $
— $
— $
(567)
(567)
F-70 SLM CORPORATION — 2023 Form 10-K
17. Fair Value Measurements (Continued)
The following table summarizes the fair values of our financial assets and liabilities, including derivative financial
instruments.
As of December 31,
(dollars in thousands)
Earning assets:
Loans held for investment, net:
Fair
Value
2023
Carrying
Value
Difference
Fair
Value
2022
Carrying
Value
Difference
Private Education Loans
$ 22,229,045 $ 19,772,293 $ 2,456,752 $ 21,062,548 $ 19,019,713 $ 2,042,835
542,775
534,064
8,711
618,186
607,155
11,031
FFELP Loans
Loans held for sale
Cash and cash equivalents
4,149,838
4,149,838
Trading investments
54,481
54,481
Available-for-sale investments
2,411,622
2,411,622
—
—
—
—
—
—
29,448
29,448
4,616,117
4,616,117
55,903
55,903
2,342,089
2,342,089
—
—
—
—
Accrued interest receivable
1,448,766
1,379,904
68,862
1,237,074
1,202,059
35,015
Tax indemnification receivable
Derivative instruments
Total earning assets
Interest-bearing liabilities:
Money-market and savings
accounts
Certificates of deposit
Long-term borrowings
—
—
—
—
—
—
2,816
972
2,816
972
—
—
$ 30,836,527 $ 28,302,202 $ 2,534,325 $ 29,965,153 $ 27,876,272 $ 2,088,881
$ 11,134,883 $ 11,203,292 $
68,409 $ 11,854,849 $ 11,959,828 $ 104,979
10,380,684
10,448,365
67,681
9,175,339
9,486,819
4,873,690
5,227,512
353,822
4,813,233
5,235,114
Accrued interest payable
105,066
105,066
Derivative instruments
370
370
—
—
71,586
567
71,586
567
311,480
421,881
—
—
Total interest-bearing liabilities
$ 26,494,693 $ 26,984,605 $ 489,912 $ 25,915,574 $ 26,753,914 $ 838,340
Excess of net asset fair value
over carrying value
$ 3,024,237
$ 2,927,221
The methods and assumptions used to estimate the fair value of each class of financial instruments are as follows:
Cash and Cash Equivalents
Cash and cash equivalents are carried at cost. Carrying value approximated fair value for disclosure purposes.
These are level 1 valuations.
Investments
Trading
Investments classified as trading are carried at fair value in the consolidated financial statements. Investments in
residual class interests are valued using observable inputs in its cash flow modeling where available but many significant
inputs are unobservable. Residual interests are not exchange traded nor do they have quoted market prices as they are
unique and do not actively trade. As such, these are level 3 valuations.
At December 31, 2023 and December 31, 2022, we had $54 million and $56 million, respectively, classified as level
3 financial instruments carried at fair value on a recurring basis through earnings. At December 31, 2023 and December
31, 2022, $54 million and $51 million, respectively, represent the five percent vertical risk retentions in the residual classes
of Private Education Loans sold through securitizations. Total gains/(losses), net included in earnings were $3 million in
net gains in the year ended December 2023, compared to less than $1 million in net losses in the year-ago period.
Settlements in the year ended December 31, 2023 were $1 million, compared to $13 million in the year-ago period. There
2023 Form 10-K — SLM CORPORATION F-71
17. Fair Value Measurements (Continued)
were no transfers into or out of level 3 related to these residual interest investments during the years ended December 31,
2023 and 2022. The change in mark to market gains/(losses) on investments held as of the reporting date were $4 million
in the year ended December 31, 2023, compared to $13 million in the year-ago period.
At December 31, 2022, $5 million of the total trading investment balance included a debt security investment which
was converted to an equity investment (classified in other investments) in the first quarter of 2023. Total interest income
included in earnings was less than $1 million for both of the years ended December 31, 2023 and 2022. There were no
transfers into or out of level 3 related to this investment. There were no market value adjustments recorded related to this
investment in the years ended December 31, 2023 and 2022.
The fair value at December 31, 2023 of the residual interests classified as level 3 valuations was $54 million. The
residual interest investments are the projected future cash flows representing the difference between the securitized
trust’s asset cash flows and the related outflows to the bondholders and for other fees. The residual investments are
valued using an internal discounted cash flow model to arrive at the net present value of expected trust residual
distributions. These instruments are not actively traded, nor do they have quoted market prices. As a result, unobservable
model input assumptions are made regarding the expected CPR and the probability of defaults of the loans in the
securitization trusts. At December 31, 2023, the range (average by volume) of the CPR input was 8.1 percent to 12.2
percent (average of 9.49 percent) and the range of the defaults input was 5.1 percent to 20.7 percent (average of 11.03
percent).
The significant inputs considered unobservable detailed above would be expected to have the following impacts to
the valuations:
• A decrease in CPR would result in a longer weighted average life of the trust, resulting in a decrease to the
valuation due to the delay in residual cash flows with the increased term. The opposite is true for an increase in
the CPR.
• A decrease in the probability of defaults means increased principal receipts, resulting in an increase to the
valuation due to the increase in residual cash flow.
• Conversely, an increase in the probability of defaults means decreased principal receipts, resulting in a decrease
to the valuation due to the decrease in residual cash flow.
Available-for-Sale
Investments classified as available-for-sale are carried at fair value in the consolidated financial statements.
Investments in mortgage-backed securities, U.S. government-sponsored enterprises and Treasury securities, and Utah
Housing Corporation bonds are valued using observable market prices of similar assets. As such, these are level 2
valuations. The fair value of our non-residual vertical risk retention investments is estimated using pricing indications
obtained from the investment bankers who participate in the asset-backed securities market. As such, these are level 2
valuations.
Loans Held For Investment and Accrued Interest Receivable
Private Education Loans
For Private Education Loans, fair value was determined by using observable quoted prices for similar assets in our
most recent market transactions. Adjustments were then made to account for the value of loans in our portfolio that have
materially different characteristics than those included in the most recent market transaction. These are considered level 2
valuations. A portion of the fair value that has been modeled is attributable to accrued interest receivable that has not yet
been capitalized, and has been allocated to the accrued interest receivable line item. The remaining accrued interest
receivable that will not be capitalized into the principal balance of the loan is carried at cost.
FFELP Loans
For FFELP Loans, the fair value was determined by modeling expected loan level cash flows using stated terms of
the assets and internally developed assumptions to determine aggregate portfolio yield, net present value, and average
life. The significant assumptions used to determine fair value are prepayment speeds, default rates, cost of funds, and
required return on equity. Significant inputs into the model are not observable. However, we do calibrate the model based
on market transactions when appropriate. As such, these are level 3 valuations.
F-72 SLM CORPORATION — 2023 Form 10-K
17. Fair Value Measurements (Continued)
Loans Held For Sale
Our loans held for sale are accounted for at the lower of cost or market. The fair value was determined by using
observable quoted prices for similar assets in our most recent market transactions. These are considered level 2
valuations.
Tax Indemnification Receivable
Tax indemnification receivable is carried at cost. The carrying value approximates fair value. This is a level 2
valuation.
Money Market and Savings Accounts
Some of our MMDAs are fixed-rate deposits that are subject to minimum balances for a specified period of time. The
fair values of these deposits are estimated using discounted cash flows based on rates currently offered for deposits of
similar maturities. These are level 2 valuations. The fair values of our remaining money market and savings accounts
equal the amounts payable on demand at the balance sheet date and are reported at their carrying value. These are level
1 valuations.
Certificates of Deposit
The fair values of CDs are estimated using discounted cash flows based on rates currently offered for deposits of
similar remaining maturities. These are level 2 valuations.
Accrued Interest Payable
Accrued interest payable is carried at cost. The carrying value approximates fair value due to its short-term nature.
This is a level 1 valuation.
Borrowings
Borrowings are accounted for at cost in the consolidated financial statements. The carrying value of short-term
borrowings approximated fair value for disclosure purposes, due to the short-term nature of those borrowings. This is a
level 1 valuation. The fair value of long-term borrowings is estimated using pricing indications obtained from the
investment bankers who participate in the asset-backed securities market. This is a level 2 valuation.
Derivatives
All derivatives are accounted for at fair value in the consolidated financial statements. The fair value of derivative
financial instruments was determined by a standard derivative pricing and option model using the stated terms of the
contracts and observable market inputs. It is our policy to compare the derivative fair values to those received from our
counterparties in order to evaluate the model’s outputs.
When determining the fair value of derivatives, we take into account counterparty credit risk for positions where we
are exposed to the counterparty on a net basis by assessing exposure net of collateral held. When the counterparty has
exposure to us under derivative contracts with the Company, we fully collateralize the exposure (subject to certain
thresholds).
Interest rate swaps are valued using a standard derivative cash flow model with a SOFR swap yield curve, which is
an observable input from an active market. These derivatives are level 2 fair value estimates in the hierarchy.
The carrying value of borrowings designated as the hedged item in a fair value hedge is adjusted for changes in fair
value due to changes in the benchmark interest rate (SOFR). These valuations are determined through standard pricing
models using the stated terms of the borrowings and observable yield curves.
2023 Form 10-K — SLM CORPORATION F-73
18. Arrangements with Navient Corporation
In connection with the Spin-Off, we entered into a Separation and Distribution Agreement with Navient (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; and
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.
•
•
•
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.
F-74 SLM CORPORATION — 2023 Form 10-K
18. Arrangements with Navient Corporation (Continued)
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.
19. Regulatory Capital
The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI. Failure to
meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and
financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and the
regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative
measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.
The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to
qualitative judgments by the regulators about components of capital, risk weightings, and other factors.
The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-based
capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent,
and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation
buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make
capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including
the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such
restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of
greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the
Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital
ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least
5.0 percent.
In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel III
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. The proposed rule therefore would not
affect the Bank’s capital requirements or the calculation of its capital ratios.
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted
CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the
following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank
elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on
January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for
credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes
(collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. 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. The
Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the
liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our
deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by
$953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as
necessary, to address any limitations in the models used.
2023 Form 10-K — SLM CORPORATION F-75
19. Regulatory Capital (Continued)
At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory
capital purposes are as follows:
Adjusted
Transition
Amounts
Phase-In
Amounts for the
Year Ended
Phase-In
Amounts for the
Year Ended
Remaining
Adjusted
Transition
Amounts to be
Phased-In
(Dollars in thousands)
December 31, 2021
December 31, 2022
December 31, 2023
December 31, 2023
Retained earnings
Allowance for credit
losses
Liability for unfunded
commitments
Deferred tax asset
$
836,351 $
(209,088) $
(209,088) $
418,175
1,038,145
(259,536)
(259,536)
519,073
104,377
306,171
(26,094)
(76,542)
(26,094)
(76,542)
52,189
153,087
The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following
table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as
indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale
investments and swap valuations from Common Equity Tier 1 Capital. At December 31, 2023 and December 31, 2022, the
unrealized loss on available-for-sale investments included in other comprehensive income totaled $115 million and
$160 million, net of tax of $37 million and $52 million, respectively. The capital ratios would remain above the U.S. Basel
III well capitalized thresholds if the unrealized loss became fully recognized into capital.
(Dollars in thousands)
Actual
U.S. Basel III
Minimum Requirements
Plus Buffer(1)(2)
Amount
Ratio
Amount
Ratio
As of December 31, 2023(3):
Common Equity Tier 1 Capital (to Risk-Weighted
Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Total Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
As of December 31, 2022(3):
Common Equity Tier 1 Capital (to Risk-Weighted
Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Total Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
$ 3,019,973
12.3 %
$ 1,719,621 >
$ 3,019,973
12.3 %
$ 2,088,111 >
7.0 %
8.5 %
$ 3,334,140
13.6 %
$ 2,579,432 >
10.5 %
$ 3,019,973
10.2 %
$ 1,184,213 >
4.0 %
$ 3,040,662
12.9 %
$ 1,645,807 >
$ 3,040,662
12.9 %
$ 1,998,480 >
7.0 %
8.5 %
$ 3,338,645
14.2 %
$ 2,468,711 >
10.5 %
$ 3,040,662
10.3 %
$ 1,185,280 >
4.0 %
(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.
(2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective
action framework.
(3) For both December 31, 2023 and 2022, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed
above that were phased in at the beginning of 2023 and 2022.
F-76 SLM CORPORATION — 2023 Form 10-K
19. Regulatory Capital (Continued)
Bank Dividends
The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s
ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial
bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory
approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Company
relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other
payments and consummate share repurchases, as described herein. The Bank declared $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. In the future, 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
its repurchase programs.
20. Defined Contribution Plans
We participate in a defined contribution plan which is intended to qualify under section 401(k) of the Internal Revenue
Code. The Sallie Mae 401(k) Savings Plan covers substantially all employees. After six months of service, we match 100
percent of the first five percent of contributions for eligible employees. For the years ended December 31, 2023, 2022, and
2021, we contributed $8 million, $7 million, and $7 million, respectively, to this plan.
21. Commitments, Contingencies and Guarantees
Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the
borrowing for the entire academic year. 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 that we are exposed
to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At
December 31, 2023, we had $2.2 billion of outstanding contractual loan commitments which we expect to fund during the
remainder of the 2023/2024 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. See Notes to Consolidated Financial Statements, Note 2,“Significant Accounting Policies - Allowance for
Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in this Form 10-K and Note 8,
“Unfunded Loan Commitments” in this Form 10-K for additional information.
Regulatory Matters
In May 2014, the Bank received a Civil Investigative Demand (“CID”) from the CFPB as part of the CFPB’s separate
investigation relating to customer complaints, fees, and charges assessed in connection with the servicing of student
loans and related collection practices of pre-Spin-Off SLM by entities now subsidiaries of Navient during a time period
prior to the Spin-Off (the “CFPB Investigation”). To the extent requested, the Bank has been cooperating fully with the
CFPB. Given the timeframe covered by the CID and the CFPB Investigation, and the focus on practices and procedures
previously conducted by Navient and its servicing subsidiaries prior to the Spin-Off, Navient is leading the response to
these investigations. Consequently, we have no basis from which to estimate either the duration or ultimate outcome of
this investigation.
We note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against Navient,
along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc. The complaint alleges these Navient
entities, among other things, engaged in deceptive practices with respect to their historic servicing and debt collection
practices. Neither SLM, the Bank, nor any of their current subsidiaries are named in, or otherwise a party to, the lawsuit
and are not alleged to have engaged in any wrongdoing. The CFPB’s complaint asserts Navient’s assumption of these
liabilities pursuant to the Separation and Distribution Agreement.
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
2023 Form 10-K — SLM CORPORATION F-77
21. Commitments, Contingencies and Guarantees (Continued)
related to the conduct of the pre-Spin-Off consumer banking business that were specifically assumed by the Bank (and as
to which the Bank is obligated to indemnify Navient). Navient has acknowledged its indemnification obligations under the
Separation and Distribution Agreement, in connection with the previously disclosed investigation matters and the now
resolved multistate litigation. Navient has informed the Bank, however, that it believes the Bank may be responsible to
indemnify Navient against certain potential liabilities arising from the above-described lawsuits under the Separation and
Distribution Agreement and/or a separate loan servicing agreement between the parties, and has suggested that the
parties defer further discussion regarding indemnification obligations, and reimbursement of ongoing legal costs, in
connection with the lawsuits. The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that
Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off
SLM that are at issue.
Contingencies
In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and
threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These
actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other
laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us
and our subsidiaries.
It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and
investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests
may be for informational or regulatory purposes and may relate to our business practices, the industries in which we
operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate
with these bodies and be responsive to any such requests.
We are required to establish reserves for litigation and regulatory matters where those matters present loss
contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do
not establish reserves.
Based on current knowledge, management does not believe there are loss contingencies, if any, arising from
pending investigations, litigation, or regulatory matters for which reserves should be established.
F-78 SLM CORPORATION — 2023 Form 10-K
22. Income Taxes
Reconciliations of the statutory U.S. federal income tax rates to our effective tax rate for continuing operations follow:
Years ended December 31,
2023
2022
2021
Statutory rate
State tax, net of federal benefit
Business credits
Other, net
Effective tax rate
21.0 %
21.0 %
21.0 %
3.8
(1.3)
1.8
4.1
(1.5)
2.0
3.1
(0.8)
1.4
25.3 %
25.6 %
24.7 %
The effective tax rate varies from the statutory U.S. federal rate of 21 percent primarily due to business tax credits
and the impact of state taxes, net of federal benefit, for the year ended December 31, 2023; due to business tax credits
and the impact of state taxes, net of federal benefit, for the year ended December 31, 2022; and due to the impact of state
taxes, net of federal benefit, for the year ended December 31, 2021.
Income tax expense consists of:
As of December 31,
(dollars in thousands)
Current provision (benefit):
Federal
State
Total current provision (benefit)
Deferred provision (benefit):
Federal
State
Total deferred provision (benefit)
2023
2022
2021
$
175,977 $
205,954 $
259,536
44,152
220,129
49,427
255,381
64,843
324,379
(20,687)
(75,978)
(2,537)
(17,692)
(23,224)
(93,670)
47,240
8,132
55,372
Provision for income tax expense
$
196,905 $
161,711 $
379,751
2023 Form 10-K — SLM CORPORATION F-79
22.
Income Taxes (Continued)
The tax effect of temporary differences that give rise to deferred tax assets and liabilities is summarized below.
As of December 31,
(dollars in thousands)
Deferred tax assets:
Loan reserves
Net unrealized losses
Accrued expenses not currently deductible
Unrecorded tax benefits
Research and development costs
Stock-based compensation plans
Acquired intangible assets
Operating loss carryovers
Other
Total deferred tax assets
Deferred tax liabilities:
2023
2022
$
354,412 $
362,368
24,176
16,297
11,568
26,519
10,847
14,536
26
1,426
459,807
30,160
12,949
12,916
10,929
9,624
781
300
3,837
443,864
Student loan premiums and discounts, net
15,908
14,065
Fixed assets
Federal deferred for state receivable
Other
Total deferred tax liabilities
Net deferred tax assets
8,533
1,171
614
9,347
2,111
397
26,226
25,920
$
433,581 $
417,944
Included in operating loss carryovers are state net operating losses of $223 million and $7 million as of December
31, 2023 and 2022, respectively. The Company has recorded a valuation allowance against these net operating losses of
$223 million and $7 million, respectively. Also included in operating loss carryovers is a capital loss of $18 million and
$16 million as of December 31, 2023 and 2022, respectively. The Company has recorded a full valuation allowance
against this capital loss. The valuation allowance is primarily attributable to deferred tax assets for state net operating
losses and capital losses that management believes are more likely than not to expire prior to being realized. Included in
net unrealized losses is a valuation allowance of $4 million and $4 million, respectively.
The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income of the
appropriate character (i.e., capital or ordinary) during the period in which the temporary differences become deductible.
Management considers, among other things, the scheduled reversals of deferred tax liabilities and the history of positive
taxable income in evaluating the realizability of the deferred tax assets. Management believes that it is more likely than
not that the results of future operations will generate sufficient taxable income to realize our deferred tax assets (other
than state net operating loss, net unrealized losses and capital loss carryovers as outlined above).
As of December 31, 2023, the state net operating loss carryforwards will begin to expire in 2029 and the capital
losses in 2025.
F-80 SLM CORPORATION — 2023 Form 10-K
22.
Income Taxes (Continued)
Accounting for Uncertainty in Income Taxes
The following table summarizes changes in unrecognized tax benefits:
As of December 31,
(dollars in thousands)
2023
2022
2021
Unrecognized tax benefits at beginning of year
$
79,366 $
75,328 $
63,134
Increases resulting from tax positions taken during a prior period
1,204
6,049
Decreases resulting from tax positions taken during a prior period
(250)
(1,327)
Increases resulting from tax positions taken during the current period
2,711
11,032
Decreases related to settlements with taxing authorities
(10,089)
(4,666)
Increases related to settlements with taxing authorities
—
—
1,496
(1,481)
20,743
(3,682)
96
Reductions related to the lapse of statute of limitations
(4,819)
(7,050)
(4,978)
Unrecognized tax benefits at end of year
$
68,123 $
79,366 $
75,328
As of December 31, 2023, the gross unrecognized tax benefits are $68 million. Included in the $68 million are
$59 million of unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate. As a part of the
Spin-Off, the Company recorded a liability related to uncertain tax positions for which it was indemnified by Navient. See
Note 2, “Significant Accounting Policies — Income Taxes” in this Form 10-K for additional details.
Tax-related interest and penalty expense is reported as a component of income tax expense. As of December 31,
2023, 2022, and 2021, the total amount of income tax-related accrued interest and penalties, net of related benefit,
recognized in the consolidated balance sheets was $8 million, $8 million, and $10 million, respectively.
For the years ended December 31, 2023, 2022, and 2021, the total amount of income tax-related accrued interest,
net of related tax benefit, recognized in the consolidated statements of income was $2 million, $(2) million, and $(1)
million, respectively.
The Company or one of its subsidiaries files income tax returns at the U.S. federal level and in most U.S. states.
U.S. federal income tax returns filed for years 2014 and prior are no longer subject to examination. Various combinations
of subsidiaries, tax years, and jurisdictions remain open for review, subject to statute of limitations periods (typically three
to four prior years). The Company’s federal income tax returns for the years ended December 31, 2015, December 31,
2016, and December 31, 2017 are currently under audit by the Internal Revenue Service. We do not expect the resolution
of open audits to have a material impact on our unrecognized tax benefits.
It is reasonably possible that the uncertain tax position reserve may decrease by as much as $21 million during the
next 12 months due to the expiration of statutes of limitations and audit settlements. The reduction in the uncertain tax
position reserve would be reflected as a tax benefit.
2023 Form 10-K — SLM CORPORATION F-81
23. Concentrations of Risk
Our business is primarily focused on helping students and their families save, plan, and pay for college. We primarily
originate, service, and/or collect loans made to students and their families to finance the cost of their education. We
provide funding, delivery, and servicing support for education loans in the United States through our Private Education
Loan program. Because of this concentration in one industry, we are exposed to credit, legislative/political/reputational,
operational, regulatory, liquidity, capital, and interest rate risks associated with the student loan industry.
Concentration Risk in the Revenues Associated with Private Education Loans
We compete in the Private Education Loan market with banks and other consumer lending institutions, some with
strong consumer brand name recognition and greater financial resources. We compete based on our products, origination
capability, and customer service. To the extent our competitors compete aggressively or more effectively, we could lose
market share to them or subject our existing loans to refinancing risk. Our product offerings may not prove to be profitable
and may result in higher-than-expected losses.
We are a leading provider of saving- and paying-for-college products and programs. This concentration gives us a
competitive advantage in the marketplace. This concentration also creates risks in our business, particularly in light of our
concentration as a Private Education Loan lender. If population demographics result in a decrease in college-age
individuals, if demand for higher education decreases, if the cost of attendance of higher education decreases, if
consumers increase their targeted savings for higher education, if public resistance to higher education costs strengthens,
if certain proposals for new federal and state spending on education gain broader appeal or momentum, or if the demand
for higher education loans decreases, our consumer lending business could be negatively affected. In addition, the federal
government, through the Federal Direct Student Loan Program (the “DSLP”), poses significant competition to our private
credit loan products. If loan limits under the DSLP increase, DSLP loans could be more widely available to students and
their families and DSLP loans could increase, resulting in further decreases in the size of the Private Education Loan
market and demand for our Private Education Loan products. Also, competition from banks and other consumer lenders,
many of whom may have a greater level of diversification in their mix of assets or may have lower return hurdles, could
lead to decreases in demand for our Private Education Loan products.
Concentration Risk Associated with Deposit Products
Our ability to achieve our business goals, including funding our Private Education Loans, is heavily reliant on our
ability to obtain deposits. We expect to compete for deposits based primarily on a combination of reputation, rate, and
availability of information about our deposit products. Our competitors, many of whom have greater financial resources or
lower costs than we do, may be more effective in attracting new deposits and retaining existing deposits such as by
offering more competitive rates, dedicating more resources for advertising, or engaging in more effective forms of
marketing.
At December 31, 2023, our brokered deposits represented 47 percent of our total deposits. Brokered deposits may
be more price sensitive than other types of deposits and may become less available if alternative investments offer higher
returns. In addition, our ability to maintain existing balances of all deposit types or obtain additional deposits of any type
may be affected by factors, including those beyond our control, such as a rising stock market, more attractive returns on
alternative investments, perceptions about our existing and future financial strength, quality of deposit servicing or online
banking generally, changes in monetary or fiscal policies that influence deposit or other rates, general economic
conditions, including high unemployment and decreased savings rates, and adverse developments in the financial
services industry generally. Also, our ability to maintain our current level of deposits or grow our deposit base could be
affected by regulatory restrictions, including the possible imposition by our regulators of prior approval requirements or
restrictions on our offered rates, brokered deposit growth, or other areas.
F-82 SLM CORPORATION — 2023 Form 10-K
24. Parent Only Statements
The following parent company-only financial information should be read in conjunction with the other notes to the
consolidated financial statements. The accounting policies for the parent company-only financial statements are the same
as those used in the presentation of the consolidated financial statements, except that the parent company-only financial
statements account for the parent company’s investments in its subsidiaries under the equity method.
Parent Only Condensed Balance Sheets
At December 31, (dollars in thousands, except share and per share amounts)
2023
2022
Assets
Cash and cash equivalents
Total investments in subsidiaries (primarily Sallie Mae Bank)
Tax indemnification receivable
Due from subsidiaries, net
Other assets
Total assets
Liabilities and Equity
Liabilities
Long-term borrowings
Income taxes payable, net
Other liabilities
Total liabilities
Equity
$
237,857 $
2,628,838
—
63,679
196,820
2,476,020
2,816
100,543
2,270
3,052
$ 2,932,644 $ 2,779,251
$
992,200 $
26,701
32,946
988,986
26,211
37,084
1,051,847
1,052,281
Preferred stock, par value $0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated
value of $100 per share
Common stock, par value $0.20 per share, 1.125 billion shares authorized:
438.2 million and 435.1 million shares issued, respectively
Additional paid-in capital
Accumulated other comprehensive loss (net of tax benefit of $(24,176) and
$(30,160), respectively)
Retained earnings
Total SLM Corporation stockholders’ equity before treasury stock
Less: Common stock held in treasury at cost: 217.9 million and 194.4 million
shares, respectively
Total equity
Total liabilities and equity
251,070
251,070
87,647
87,025
1,148,689
1,109,072
(75,104)
3,624,859
(93,870)
3,163,640
5,037,161
4,516,937
(3,156,364)
(2,789,967)
1,880,797
1,726,970
$ 2,932,644 $ 2,779,251
2023 Form 10-K — SLM CORPORATION F-83
24. Parent Only Statements (Continued)
Parent Only Condensed Statements of Income
Years ended December 31, (dollars in thousands)
2023
2022
2021
Interest income
Interest expense
Net interest loss
Non-interest loss
Non-interest expenses
Loss before income tax benefit and equity in net
income from subsidiaries
Income tax expense (benefit)
Equity in net income from subsidiaries (primarily
Sallie Mae Bank)
Net income
Preferred stock dividends
Net income attributable to SLM Corporation
common stock
$
9,334 $
4,084 $
392
39,850
(30,516)
39,860
(35,776)
35,208
(34,816)
(2,701)
61,958
(95,175)
(6,942)
669,624
581,391
17,705
(5,117)
55,466
(13,078)
54,352
(96,359)
(10,351)
(102,246)
8,477
555,022
1,271,236
469,014
1,160,513
9,029
4,736
$
563,686 $
459,985 $ 1,155,777
F-84 SLM CORPORATION — 2023 Form 10-K
24. Parent Only Statements (Continued)
Parent Only Condensed Statement of Cash Flows
Years ended December 31, (dollars in thousands)
2023
2022
2021
Increase in other assets
(13,422)
(20,533)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Undistributed earnings of subsidiaries
Dividends received from Sallie Mae Bank
Reduction of tax indemnification receivable
Amortization of unsecured debt upfront fees
Amortization of discount on unsecured borrowings
Loss on early extinguishment of unsecured debt
Acquisition related costs
(Increase) decrease in investment in subsidiaries, net
(Increase) decrease in due from subsidiaries, net
Increase (decrease) in income taxes payable, net
Decrease in payable due to entity that is a subsidiary of Navient
Increase (decrease) in other liabilities
Total adjustments
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of subsidiary, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities:
Issuance costs for unsecured debt offering
Unsecured debt issued
Unsecured debt repaid
Common stock dividends paid
Preferred stock dividends paid
Common stock repurchased
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
$
581,391 $
469,014 $ 1,160,513
(669,624)
(555,022)
(1,271,236)
550,000
699,500
1,444,500
2,816
2,643
571
—
952
35,654
36,864
5,231
2,651
571
—
2,603
(9,179)
5,124
10,445
2,663
—
2,784
—
34,935
(58,310)
(16,964)
36,657
(8,430)
2,165
490
—
(3,442)
(56,498)
524,893
(8,713)
(101)
(1,836)
120,296
589,310
179,209
1,339,722
(14,654)
(14,654)
(127,654)
(127,654)
—
—
—
—
—
(375)
—
—
(101,233)
(112,961)
(9,029)
(1,540)
492,135
(202,784)
(60,462)
(4,736)
(17,705)
(350,264)
(469,202)
41,037
196,820
(713,197)
(1,530,683)
(835,562)
(1,308,070)
(373,906)
570,726
31,652
539,074
Cash and cash equivalents at end of year
$
237,857 $
196,820 $
570,726
2023 Form 10-K — SLM CORPORATION F-85
25. Selected Quarterly Financial Information (unaudited)
2023
(Dollars in thousands, except per share data)
Net interest income
Less: provisions for credit losses
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$ 405,068 $ 386,631 $ 384,628 $ 385,886
114,112
17,729
198,023
15,599
Net interest income after provisions for credit losses
290,956
368,902
186,605
370,287
Gains (losses) on sales of loans, net
Gains (losses) on securities, net
Other income
Total operating expenses
(9) 124,754
(5) 35,550
1,711
(1,213)
1,490
690
20,009
20,513
22,753
20,873
154,539
154,164
167,402
143,101
Acquired intangible assets impairment and amortization expense
2,272
2,245
2,834
59,013
Income tax expense
Net income
Preferred stock dividends
Net income attributable to SLM Corporation common stock
Basic earnings per common share(1)
Diluted earnings per common share(1)
Declared dividends per common share
37,338
91,482
11,242
56,843
118,518
265,065
29,365
168,443
4,063
4,274
4,642
4,726
$ 114,455 $ 260,791 $ 24,723 $ 163,717
$
$
$
0.47 $
1.11 $
0.11 $
0.47 $
1.10 $
0.11 $
0.11 $
0.11 $
0.11 $
0.73
0.72
0.11
(1)
Basic and diluted earnings per common share attributable to SLM Corporation are computed independently for each
of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per common share information
may not equal annual basic and diluted earnings per common share.
F-86 SLM CORPORATION — 2023 Form 10-K
25. Selected Quarterly Financial Information (unaudited) (Continued)
2022
(Dollars in thousands, except per share data)
Net interest income
Less: provisions for credit losses
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$ 375,032 $ 362,808 $ 369,510 $ 381,431
98,050
30,545
207,598
297,260
Net interest income after provisions for credit losses
276,982
332,263
161,912
84,171
Gains on sales of loans, net
Gains (losses) on securities, net
Gains (losses) on derivative and hedging activities, net
Other income
Total operating expenses
9,881
239,997
74,978
2,894
(3,580)
(5)
667
—
891
(58,245)
—
—
15,629
17,589
19,234
14,708
132,006
131,730
149,964
137,762
Acquired intangible assets amortization expense
733
2,417
2,328
2,301
Income tax expense (benefit)
Net income (loss)
Preferred stock dividends
Net income (loss) attributable to SLM Corporation common
stock
Basic earnings (loss) per common share(1)
Diluted earnings (loss) per common share(1)
Declared dividends per common share
37,356
114,296
29,551
(19,492)
128,812
342,073
75,172
(77,043)
1,275
1,757
2,531
3,466
$ 127,537 $ 340,316 $ 72,641 $ (80,509)
$
$
$
0.46 $
1.30 $
0.29 $
(0.33)
0.45 $
1.29 $
0.29 $
(0.33)
0.11 $
0.11 $
0.11 $
0.11
(1)
Basic and diluted earnings (loss) per common share attributable to SLM Corporation are computed independently for
each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings (loss) per common share
information may not equal annual basic and diluted earnings (loss) per common share.
2023 Form 10-K — SLM CORPORATION F-87
26. Subsequent Event
2024 Loan Sales
On February 1, 2024, we sold approximately $2.0 billion of our Private Education Loans, including $1.9 billion
in principal, $143 million in capitalized interest and $10 million in accrued interest to an unaffiliated third party. The
gain on sale of loans sold expressed as a percentage was in the mid-to-high single-digits and will be recognized in
the first-quarter 2024 consolidated statements of income. The transaction qualified for sale treatment and removed
the balance of the loans from our balance sheet on the settlement date. We will continue to service these loans
pursuant to the terms of the applicable transaction documents.
F-88 SLM CORPORATION — 2023 Form 10-K