XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Borrowings | 3 Months Ended
--- | ---
Mar. 31, 2024
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 2023 Form 10-K. The following table summarizes our borrowings at March 31, 2024 and December 31, 2023.
|  | March 31, 2024 |  | December 31, 2023
(Dollars in thousands) |  | Short-Term |  | Long-Term |  | Total |  | Short-Term |  | Long-Term |  | Total
Unsecured borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Unsecured debt (fixed-rate) |  | $ | — |  |  | $ | 993,005 |  |  | $ | 993,005 |  |  | $ | — |  |  | $ | 992,200 |  |  | $ | 992,200 |
Total unsecured borrowings |  | — |  |  | 993,005 |  |  | 993,005 |  |  | — |  |  | 992,200 |  |  | 992,200 |
Secured borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loan term securitizations: |  |  |  |  |  |  |  |  |  |  |  |
Fixed-rate |  | — |  |  | 3,390,494 |  |  | 3,390,494 |  |  | — |  |  | 3,585,254 |  |  | 3,585,254 |
Variable-rate |  | — |  |  | 593,383 |  |  | 593,383 |  |  | — |  |  | 650,058 |  |  | 650,058 |
Total Private Education Loan term securitizations |  | — |  |  | 3,983,877 |  |  | 3,983,877 |  |  | — |  |  | 4,235,312 |  |  | 4,235,312 |
Secured Borrowing Facility |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total secured borrowings |  | — |  |  | 3,983,877 |  |  | 3,983,877 |  |  | — |  |  | 4,235,312 |  |  | 4,235,312 |
Total |  | $ | — |  |  | $ | 4,976,882 |  |  | $ | 4,976,882 |  |  | $ | — |  |  | $ | 5,227,512 |  |  | $ | 5,227,512 |
Long-term Borrowings Secured Financings at Issuance The following table summarizes our secured financings issued in 2023. There were no secured financings issued in the three months ended March 31, 2024.
Issue |  | Date Issued |  | Total Issued |  | Weighted Average Cost of Funds(1) |  | Weighted Average Life (in years)
(Dollars in thousands) |  |  |  |  |  |  |  |
Private Education Loans: |  |  |  |  |  |
2023-A |  | March 2023 |  | $ | 579,000 |  |  | SOFR plus 1.53% |  | 5.06
2023-C |  | August 2023 |  | 568,000 |  |  | SOFR plus 1.69% |  | 4.93
Total notes issued in 2023 |  | $ | 1,147,000 |  |  |  |  |
Total loan and accrued interest amount securitized at inception in 2023(2) |  | $ | 1,292,507 |  |  |  |  |
(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs. (2) At March 31, 2024, $1.17 billion of our Private Education Loans, including $1.09 billion of principal and $84 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 March 31, 2024 (dollars in thousands) |  | 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 |  | $ | — |  |  | $ | 3,983,877 |  |  | $ | 3,983,877 |  |  | $ | 5,279,994 |  |  | $ | 147,649 |  |  | $ | 300,115 |  |  | $ | 5,727,758 |
Secured Borrowing Facility |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 353 |  |  | 353 |
Total |  | $ | — |  |  | $ | 3,983,877 |  |  | $ | 3,983,877 |  |  | $ | 5,279,994 |  |  | $ | 147,649 |  |  | $ | 300,468 |  |  | $ | 5,728,111 |
As of December 31, 2023 |  | 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 |  | $ | — |  |  | $ | 4,235,312 |  |  | $ | 4,235,312 |  |  | $ | 5,539,964 |  |  | $ | 149,412 |  |  | $ | 311,697 |  |  | $ | 6,001,073 |
Secured Borrowing Facility |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,066 |  |  | 1,066 |
Total |  | $ | — |  |  | $ | 4,235,312 |  |  | $ | 4,235,312 |  |  | $ | 5,539,964 |  |  | $ | 149,412 |  |  | $ | 312,763 |  |  | $ | 6,002,139 |
(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. 2024-A Transaction On March 13, 2024, we closed an SMB Private Education Loan Trust 2024-A term ABS transaction (the “2024-A 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 February 1, 2024. Sallie Mae Bank sponsored the 2024-A 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 2024-A Transaction and we recorded a $7 million gain on sale associated with this transaction. In connection with the 2024-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 2024-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. The table below provides a summary of our exposure related to our unconsolidated VIEs.
|  | March 31, 2024 |  | December 31, 2023
(Dollars in thousands) |  | Debt Interests(1) |  | Equity Interests(2) |  | Total Exposure |  | Debt Interests(1) |  | Equity Interests(2) |  | Total Exposure
Private Education Loan term securitizations |  | $ | 521,263 |  |  | $ | 58,166 |  |  | $ | 579,429 |  |  | $ | 423,327 |  |  | $ | 54,481 |  |  | $ | 477,808 |
(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 March 31, 2024. 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 three months ended March 31, 2024 nor in the year ended December 31, 2023. 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 March 31, 2024 and December 31, 2023, the value of our pledged collateral at the FRB totaled $1.4 billion and $1.6 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the three months ended March 31, 2024 nor in the year ended December 31, 2023.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration