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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2024
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements We use estimates of fair value in applying various accounting standards for our 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 Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Fair Value Measurement” in our 2023 Form 10-K. During the six months ended June 30, 2024, there were no significant transfers of financial instruments between levels or changes in our methodology or assumptions used to value our financial instruments. The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis.
|  | Fair Value Measurements on a Recurring Basis
|  | June 30, 2024 |  | December 31, 2023
(Dollars in thousands) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trading investments |  | $ | — |  |  | $ | — |  |  | $ | 60,473 |  |  | $ | 60,473 |  |  | $ | — |  |  | $ | — |  |  | $ | 54,481 |  |  | $ | 54,481 |
Available-for-sale investments |  | — |  |  | 2,280,155 |  |  | 3,107 |  |  | 2,283,262 |  |  | — |  |  | 2,411,622 |  |  | — |  |  | 2,411,622 |
Derivative instruments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | — |  |  | $ | 2,280,155 |  |  | $ | 63,580 |  |  | $ | 2,343,735 |  |  | $ | — |  |  | $ | 2,411,622 |  |  | $ | 54,481 |  |  | $ | 2,466,103 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative instruments |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (370) |  |  | $ | — |  |  | $ | (370) |
Total |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (116) |  |  | $ | — |  |  | $ | (370) |  |  | $ | — |  |  | $ | (370) |
The following table summarizes the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.
|  | Six Months Ended June 30,
|  | 2024 |  | 2023
|  | Investments |  | Investments
(Dollars in thousands) |  | Available For Sale - Debt Securities |  | Trading - Residual Interests |  | Total |  | Available For Sale - Debt Securities |  | Trading - Residual Interests |  | Total
Balance, beginning of period |  | $ | — |  |  | $ | 54,481 |  |  | $ | 54,481 |  |  | $ | — |  |  | $ | 50,786 |  |  | $ | 50,786 |
Total gains/(losses): |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings (or changes in net assets)(1) |  | 8 |  |  | 4,233 |  |  | 4,241 |  |  | — |  |  | 537 |  |  | 537 |
Included in other comprehensive income |  | 48 |  |  | — |  |  | 48 |  |  | — |  |  | — |  |  | — |
Settlements |  | 3,051 |  |  | 1,759 |  |  | 4,810 |  |  | — |  |  | 823 |  |  | 823 |
Transfers into level 3 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Transfers out of level 3 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance, end of period |  | $ | 3,107 |  |  | $ | 60,473 |  |  | $ | 63,580 |  |  | $ | — |  |  | $ | 52,146 |  |  | $ | 52,146 |
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period |  | $ | 48 |  |  | $ | — |  |  | $ | 48 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period(2) |  | $ | — |  |  | $ | 4,233 |  |  | $ | 4,233 |  |  | $ | — |  |  | $ | 537 |  |  | $ | 537 |
(1) Included in earnings (or changes in net assets) is comprised of the amounts recorded in the specified line item in the consolidated statements of income:
|  | Six Months Ended June 30,
(Dollars in thousands) |  | 2024 |  | 2023
Interest Income - Investments |  | $ | 8 |  |  | $ | — |
Gains (losses) on securities, net |  | 4,233 |  |  | 537 |
Total |  | $ | 4,241 |  |  | $ | 537 |
(2) Recorded in "gains (losses) on securities, net" in the consolidated statements of income. The following table presents the significant unobservable inputs used in the recurring valuations of the level 3 financial instruments detailed above.
(Dollars in thousands) |  | Fair Value at 6/30/2024 |  | Valuation Technique |  | Unobservable Input |  | Range (Average)
Debt Securities |  | $ | 3,107 |  |  | Discounted cash flow |  | Constant Prepayment Rate |  | 7.1%-11.1% (8.49%)
|  |  |  |  |  | Probability of default |  | 4.0%-17.4% (11.26%)
Residual Interests |  | 60,473 |  |  | Discounted cash flow |  | Constant Prepayment Rate |  | 7.1%-11.1% (8.49%)
|  |  |  |  |  | Probability of default |  | 4.0%-17.4% (11.26%)
Total |  | $ | 63,580 |  |  |  |  |  |  |
The significant inputs detailed in the above table 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. The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.
|  | June 30, 2024 |  | December 31, 2023
(Dollars in thousands) |  | Fair Value |  | Carrying Value |  | Difference |  | Fair Value |  | Carrying Value |  | Difference
Earning assets: |  |  |  |  |  |  |  |  |  |  |  |
Loans held for investment, net: |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loans |  | $ | 20,976,381 |  |  | $ | 18,432,600 |  |  | $ | 2,543,781 |  |  | $ | 22,229,045 |  |  | $ | 19,772,293 |  |  | $ | 2,456,752 |
FFELP Loans |  | 480,752 |  |  | 482,733 |  |  | (1,981) |  |  | 542,775 |  |  | 534,064 |  |  | 8,711 |
Cash and cash equivalents |  | 5,262,448 |  |  | 5,262,448 |  |  | — |  |  | 4,149,838 |  |  | 4,149,838 |  |  | — |
Trading investments |  | 60,473 |  |  | 60,473 |  |  | — |  |  | 54,481 |  |  | 54,481 |  |  | — |
Available-for-sale investments |  | 2,283,262 |  |  | 2,283,262 |  |  | — |  |  | 2,411,622 |  |  | 2,411,622 |  |  | — |
Accrued interest receivable |  | 1,476,267 |  |  | 1,391,081 |  |  | 85,186 |  |  | 1,448,766 |  |  | 1,379,904 |  |  | 68,862 |
Derivative instruments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total earning assets |  | $ | 30,539,583 |  |  | $ | 27,912,597 |  |  | $ | 2,626,986 |  |  | $ | 30,836,527 |  |  | $ | 28,302,202 |  |  | $ | 2,534,325 |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Money-market and savings accounts |  | $ | 10,388,501 |  |  | $ | 10,461,743 |  |  | $ | 73,242 |  |  | $ | 11,134,883 |  |  | $ | 11,203,292 |  |  | $ | 68,409 |
Certificates of deposit |  | 10,259,979 |  |  | 10,279,367 |  |  | 19,388 |  |  | 10,380,684 |  |  | 10,448,365 |  |  | 67,681 |
Long-term borrowings |  | 5,151,728 |  |  | 5,403,012 |  |  | 251,284 |  |  | 4,873,690 |  |  | 5,227,512 |  |  | 353,822 |
Accrued interest payable |  | 99,493 |  |  | 99,493 |  |  | — |  |  | 105,066 |  |  | 105,066 |  |  | — |
Derivative instruments |  | 116 |  |  | 116 |  |  | — |  |  | 370 |  |  | 370 |  |  | — |
Total interest-bearing liabilities |  | $ | 25,899,817 |  |  | $ | 26,243,731 |  |  | $ | 343,914 |  |  | $ | 26,494,693 |  |  | $ | 26,984,605 |  |  | $ | 489,912 |
Excess of net asset fair value over carrying value |  |  |  |  |  | $ | 2,970,900 |  |  |  |  |  |  | $ | 3,024,237 |
Please refer to Notes to Consolidated Financial Statements, Note 17, “Fair Value Measurements” in our 2023 Form 10-K for a full discussion of the methods and assumptions used to estimate the fair value of each class of financial instruments.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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