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Borrowings
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Borrowings Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securitization (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in our 2022 Form 10-K. The following table summarizes our borrowings at June 30, 2023 and December 31, 2022.

June 30, 2023December 31, 2022
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $990,592 $990,592 $— $988,986 $988,986 
Total unsecured borrowings— 990,592 990,592 — 988,986 988,986 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,536,400 3,536,400 — 3,462,363 3,462,363 
Variable-rate— 686,706 686,706 — 783,765 783,765 
Total Private Education Loan term securitizations— 4,223,106 4,223,106 — 4,246,128 4,246,128 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,223,106 4,223,106 — 4,246,128 4,246,128 
Total$— $5,213,698 $5,213,698 $— $5,235,114 $5,235,114 

Short-term Borrowings
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 June 30, 2023, and December 31, 2022, there were no secured borrowings outstanding under the Secured Borrowing Facility.
Long-term Borrowings
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 June 30, 2023, $625 million of our Private Education Loans, including $581 million of principal and $44 million in capitalized interest, were encumbered because of this transaction.
Secured Financings at Issuance
The following table summarizes our secured financings issued in the year ended December 31, 2022 and in the six months ended June 30, 2023.

IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
(Dollars in thousands)
Private Education Loans:
2022-CAugust 2022$575,000 
SOFR plus 1.76%
4.69
Total notes issued in 2022$575,000 
Total loan and accrued interest amount securitized at inception in 2022(2)
$674,387 
2023-AMarch 2023$579,000 
SOFR plus 1.53%
5.06
Total notes issued in 2023$579,000 
Total loan and accrued interest amount securitized at inception in 2023(3)
$644,573 


(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.
(2) At June 30, 2023, $588 million of our Private Education Loans, including $550 million of principal and $38 million in capitalized interest, were encumbered related to these transactions.
(3) At June 30, 2023, $625 million of our Private Education Loans, including $581 million of principal and $44 million in capitalized interest, were encumbered related to these transactions.
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 June 30, 2023
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,223,106 $4,223,106 $5,461,684 $150,585 $311,216 $5,923,485 
Secured Borrowing Facility— — — — — 2,475 2,475 
Total$— $4,223,106 $4,223,106 $5,461,684 $150,585 $313,691 $5,925,960 

As of December 31, 2022
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,246,128 $4,246,128 $5,433,602 $156,719 $286,093 $5,876,414 
Secured Borrowing Facility— — — — — 1,066 1,066 
Total$— $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.
The table below provides a summary of our exposure related to our unconsolidated VIEs.

June 30, 2023
December 31, 2022
(Dollars in thousands)
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$411,070 $52,146 $463,216 $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.



Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at June 30, 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 six months ended June 30, 2023 or in the year ended December 31, 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 June 30, 2023 and December 31, 2022, the value of our pledged collateral at the FRB totaled $1.7 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 six months ended June 30, 2023 or in the year ended December 31, 2022.