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Borrowings | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Borrowings | 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, 2020 and 2019.
|  | December 31, 2020 |  | December 31, 2019
|  | Short-Term |  | Long-Term |  | Total |  | Short-Term |  | Long-Term |  | Total
Unsecured borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Unsecured debt (fixed-rate) |  | $ | — |  |  | $ | 692,879 |  |  | $ | 692,879 |  |  | $ | — |  |  | $ | 198,159 |  |  | $ | 198,159 |
Total unsecured borrowings |  | — |  |  | 692,879 |  |  | 692,879 |  |  | — |  |  | 198,159 |  |  | 198,159 |
Secured borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loan term securitizations: |  |  |  |  |  |  |  |  |  |  |  |
Fixed-rate |  | — |  |  | 3,261,233 |  |  | 3,261,233 |  |  | — |  |  | 2,629,902 |  |  | 2,629,902 |
Variable-rate |  | — |  |  | 1,235,105 |  |  | 1,235,105 |  |  | — |  |  | 1,525,976 |  |  | 1,525,976 |
Total Private Education Loan term securitizations |  | — |  |  | 4,496,338 |  |  | 4,496,338 |  |  | — |  |  | 4,155,878 |  |  | 4,155,878 |
Secured Borrowing Facility |  | — |  |  | — |  |  | — |  |  | 289,230 |  |  | — |  |  | 289,230 |
Total secured borrowings |  | — |  |  | 4,496,338 |  |  | 4,496,338 |  |  | 289,230 |  |  | 4,155,878 |  |  | 4,445,108 |
Total |  | $ | — |  |  | $ | 5,189,217 |  |  | $ | 5,189,217 |  |  | $ | 289,230 |  |  | $ | 4,354,037 |  |  | $ | 4,643,267 |
Short-term Borrowings Secured Borrowing Facility On February 19, 2020, we amended our Secured Borrowing Facility to, among other things, increase the amount that can be borrowed under the facility to $2 billion (from $750 million) and extend the maturity of the facility. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the amended 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 February 17, 2021. On February 17, 2021, we further amended and extended the maturity of our Secured Borrowing Facility such that the revolving period now extends until February 16, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, now ends on February 16, 2023 (or earlier, if certain material adverse events occur). At December 31, 2020, there were no secured borrowings outstanding under the Secured Borrowing Facility, and at December 31, 2019, $289 million secured borrowings were outstanding under the Secured Borrowing Facility. For additional information, see Notes to Consolidated Financial Statements, Note 25, “Subsequent Events.” Short-term borrowings have a remaining term to maturity of one year or less. The following table summarizes the outstanding short-term borrowings, the weighted average interest rates at the end of the period and the related average balance and weighted average interest rates during the period. 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.
|  | December 31, 2020 |  | Year Ended December 31, 2020
|  | Ending Balance |  | Weighted Average Interest Rate |  | Average Balance |  | Weighted Average Interest Rate(1)
Short-term borrowings: |  |  |  |  |  |  |  |
Secured Borrowing Facility |  | $ | — |  |  | — | % |  | $ | 45,820 |  |  | 24.99 | %
Maximum outstanding at any month end |  | $ | 289,230 |  |  |  |  |  |  |
|  | December 31, 2019 |  | Year Ended December 31, 2019
|  | Ending Balance |  | Weighted Average Interest Rate |  | Average Balance |  | Weighted Average Interest Rate
Short-term borrowings: |  |  |  |  |  |  |  |
Secured Borrowing Facility |  | $ | 289,230 |  |  | 1.74 | % |  | $ | 102,639 |  |  | 4.91 | %
Maximum outstanding at any month end |  | $ | 297,800 |  |  |  |  |  |  |
___________ (1)The interest for the non-use fees is calculated based on the Secured Borrowing Facility’s maximum borrowing limit, which increased to $2 billion in 2020. Long-term Borrowings Unsecured Debt On April 5, 2017, we issued at par an unsecured debt offering of $200 million of 5.125 percent Senior Notes due April 5, 2022. At December 31, 2020, the outstanding balance was $199 million. 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, 2020, the outstanding balance was $494 million. Secured Financings 2020 Transactions On February 12, 2020, we executed our $636 million SMB Private Education Loan Trust 2020-A term ABS transaction, which was accounted for as a secured financing. We sold $636 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $634 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.18 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.88 percent. At December 31, 2020, $605 million of our Private Education Loans, including $567 million of principal and $38 million in capitalized interest, were encumbered because of this transaction. On August 12, 2020, we executed our $707 million SMB Private Education Loan Trust 2020-B term ABS transaction, which was accounted for as a secured financing. We sold $707 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $705 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.14 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 1.30 percent. At December 31, 2020, $748 million of our Private Education Loans, including $701 million of principal and $47 million in capitalized interest, were encumbered because of this transaction. 2019 Transactions On March 13, 2019, we executed our $453 million SMB Private Education Loan Trust 2019-A term ABS transaction, which was accounted for as a secured financing. We sold $453 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $451 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.26 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.92 percent. At December 31, 2020, $377 million of our Private Education Loans, including $355 million of principal and $22 million in capitalized interest, were encumbered because of this transaction. On June 12, 2019, we executed our $657 million SMB Private Education Loan Trust 2019-B term ABS transaction, which was accounted for as a secured financing. We sold $657 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $655 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.41 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 1.01 percent. At December 31, 2020, $578 million of our Private Education Loans, including $542 million of principal and $36 million in capitalized interest, were encumbered because of this transaction. Pre-2019 Transactions Prior to 2019, we executed a total of $5.8 billion in ABS transactions that were accounted for as secured financings. At December 31, 2020, $3.7 billion of our Private Education Loans, including $3.5 billion of principal and $159 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, 2020 |  | Year Ended December 31, 2020 |  | December 31, 2019 |  | Year Ended December 31, 2019
|  | Ending Balance |  | Weighted Average Interest Rate |  | Average Balance |  | Ending Balance |  | Weighted Average Interest Rate |  | Average Balance
Floating-rate borrowings |  | $ | 1,235,105 |  |  | 1.09 | % |  | $ | 1,432,446 |  |  | $ | 1,525,976 |  |  | 2.61 | % |  | $ | 1,731,675 |
Fixed-rate borrowings |  | 3,954,112 |  |  | 3.08 |  |  | 3,316,425 |  |  | 2,828,061 |  |  | 3.31 |  |  | 2,752,183 |
Total long-term borrowings |  | $ | 5,189,217 |  |  | 2.60 | % |  | $ | 4,748,871 |  |  | $ | 4,354,037 |  |  | 3.07 | % |  | $ | 4,483,858 |
As of December 31, 2020, the stated maturity and maturity to call date of our brokered deposits and borrowings are summarized below.
| December 31, 2020
| Stated Maturity(1) |  | Maturity to Call Date
| Brokered Deposits |  | Unsecured Debt |  | Secured Borrowings |  | Total |  | Brokered Deposits |  | Unsecured Debt |  | Secured Borrowings |  | Total
Year of Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2021 | $ | 3,691,601 |  |  | $ | — |  |  | $ | 612,195 |  |  | $ | 4,303,796 |  |  | $ | 3,691,601 |  |  | $ | — |  |  | $ | 612,195 |  |  | $ | 4,303,796 |
2022 | 2,918,823 |  |  | 200,000 |  |  | 567,540 |  |  | 3,686,363 |  |  | 2,918,823 |  |  | 200,000 |  |  | 567,540 |  |  | 3,686,363 |
2023 | 1,536,077 |  |  | — |  |  | 605,658 |  |  | 2,141,735 |  |  | 1,536,077 |  |  | — |  |  | 605,658 |  |  | 2,141,735 |
2024 | 499,112 |  |  | — |  |  | 596,843 |  |  | 1,095,955 |  |  | 499,112 |  |  | — |  |  | 596,843 |  |  | 1,095,955 |
2025 | 270,274 |  |  | 500,000 |  |  | 587,801 |  |  | 1,358,075 |  |  | 270,274 |  |  | 500,000 |  |  | 587,801 |  |  | 1,358,075 |
2026 and after | 47,401 |  |  | — |  |  | 1,705,576 |  |  | 1,752,977 |  |  | 47,401 |  |  | — |  |  | 1,705,576 |  |  | 1,752,977 |
| 8,963,288 |  |  | 700,000 |  |  | 4,675,613 |  |  | 14,338,901 |  |  | 8,963,288 |  |  | 700,000 |  |  | 4,675,613 |  |  | 14,338,901 |
Hedge accounting adjustments | 108,913 |  |  | — |  |  | — |  |  | 108,913 |  |  | 108,913 |  |  | — |  |  | — |  |  | 108,913 |
Total | $ | 9,072,201 |  |  | $ | 700,000 |  |  | $ | 4,675,613 |  |  | $ | 14,447,814 |  |  | $ | 9,072,201 |  |  | $ | 700,000 |  |  | $ | 4,675,613 |  |  | $ | 14,447,814 |
____________ (1)We view our securitization trust debt as long-term based on the contractual maturity dates and projected principal paydowns based on our current estimates regarding loan prepayment speeds. The projected principal paydowns in year 2021 include $612 million related to the securitization trust debt. Secured Financings The following summarizes our secured financings issued in 2019 and 2020:
Issue |  | Date Issued |  | Total Issued |  | Weighted Average Cost of Funds(1) |  | Weighted Average Life (in years)
Private Education Loans: |  |  |  |  |  |
2019-A |  | March 2019 |  | $ | 453,000 |  |  | 1-month LIBOR plus 0.92% |  | 4.26
2019-B |  | June 2019 |  | 657,000 |  |  | 1-month LIBOR plus 1.01% |  | 4.41
Total notes issued in 2019 |  | $ | 1,110,000 |  |  |  |  |
Total loan and accrued interest amount securitized at inception in 2019 |  | $ | 1,208,963 |  |  |  |  |
2020-A |  | February 2020 |  | $ | 636,000 |  |  | 1-month LIBOR plus 0.88% |  | 4.18
2020-B |  | August 2020 |  | 707,000 |  |  | 1-month LIBOR plus 1.30% |  | 4.14
Total notes issued in 2020 |  |  |  | $ | 1,343,000 |  |  |  |  |
Total loan and accrued interest amount securitized at inception in 2020 |  | $ | 1,463,230 |  |  |  |  |
____________ (1) Represents LIBOR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs. 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.
|  | December 31, 2020
|  | Debt Outstanding |  | Carrying Amount of Assets Securing Debt Outstanding
|  | Short-Term |  | Long-Term |  | Total |  | Loans |  | Restricted Cash |  | Other Assets(1) |  | Total
Secured borrowings: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loan term securitizations |  | $ | — |  |  | $ | 4,496,338 |  |  | $ | 4,496,338 |  |  | $ | 5,661,123 |  |  | $ | 154,417 |  |  | $ | 356,967 |  |  | $ | 6,172,507 |
Secured Borrowing Facility |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 436 |  |  | 436 |
Total |  | $ | — |  |  | $ | 4,496,338 |  |  | $ | 4,496,338 |  |  | $ | 5,661,123 |  |  | $ | 154,417 |  |  | $ | 357,403 |  |  | $ | 6,172,943 |
|  | December 31, 2019
|  | Debt Outstanding |  | Carrying Amount of Assets Securing Debt Outstanding
|  | Short-Term |  | Long-Term |  | Total |  | Loans |  | Restricted Cash |  | Other Assets(1) |  | Total
Secured borrowings: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loan term securitizations |  | $ | — |  |  | $ | 4,155,878 |  |  | $ | 4,155,878 |  |  | $ | 5,246,986 |  |  | $ | 145,760 |  |  | $ | 333,173 |  |  | $ | 5,725,919 |
Secured Borrowing Facility |  | 289,230 |  |  | — |  |  | 289,230 |  |  | 339,666 |  |  | 8,803 |  |  | 23,832 |  |  | 372,301 |
Total |  | $ | 289,230 |  |  | $ | 4,155,878 |  |  | $ | 4,445,108 |  |  | $ | 5,586,652 |  |  | $ | 154,563 |  |  | $ | 357,005 |  |  | $ | 6,098,220 |
________ (1) Other assets primarily represent accrued interest receivable. Unconsolidated VIEs Student Loan Securitizations Our 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 in the first quarter of 2020. The Company remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and is also the administrator of these trusts. Additionally, we own 5 percent of the securities issued by the trusts in order to meet risk retention requirements. We were not required to consolidate these entities because we do not have the power to direct the activities that most significantly impact their economic performance. Our maximum exposure to these entities is limited to the investment on our consolidated balance sheet of $86 million as of December 31, 2020. Other Borrowing Sources We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at December 31, 2020. 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, 2020 and 2019. 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, 2020 and December 31, 2019, the value of our pledged collateral at the FRB totaled $3.8 billion and $3.2 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, 2020 and 2019.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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