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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Valuation of Financial Instruments that are Marked-to-Market on Recurring Basis

The following table summarizes the valuation of our financial instruments that are marked-to-market on a recurring basis.

		Fair Value Measurements on a Recurring Basis
		December 31, 2013																December 31, 2012
(Dollars in millions)		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
Assets
Available-for-sale investments:
Agency residential mortgage-backed securities		$	—			$	102			$	—			$	102			$	—			$	63			$	—			$	63
Guaranteed investment contracts			—				—				—				—				—				9				—				9
Other			—				7				—				7				—				9				—				9
Total available-for-sale investments			—				109				—				109				—				81				—				81
Derivative instruments:(1)
Interest rate swaps			—				785				38				823				—				1,444				102				1,546
Cross currency interest rate swaps			—				27				1,158				1,185				—				48				1,187				1,235
Other			—				—				2				2				—				—				4				4
Total derivative assets(3)			—				812				1,198				2,010				—				1,492				1,293				2,785
Total		$	—			$	921			$	1,198			$	2,119			$	—			$	1,573			$	1,293			$	2,866
Liabilities(2)
Derivative instruments(1)
Interest rate swaps		$	—			$	(239	)		$	(125	)		$	(364	)		$	—			$	(34	)		$	(175	)		$	(209	)
Floor Income Contracts			—				(1,384	)			—				(1,384	)			—				(2,154	)			—				(2,154	)
Cross currency interest rate swaps			—				(35	)			(151	)			(186	)			—				(2	)			(134	)			(136	)
Other			—				—				(23	)			(23	)			—				—				—				—
Total derivative liabilities(3)			—				(1,658	)			(299	)			(1,957	)			—				(2,190	)			(309	)			(2,499	)
Total		$	—			$	(1,658	)		$	(299	)		$	(1,957	)		$	—			$	(2,190	)		$	(309	)		$	(2,499	)

⁽¹⁾  Fair value of derivative instruments excludes accrued interest and the value of collateral.

⁽²⁾  Borrowings which are the hedged items in a fair value hedge relationship and which are adjusted for changes in value due to benchmark interest rates only are not carried at full fair value and are not reflected in this table.

⁽³⁾  See “Note 7 — Derivative Financial Instruments” for a reconciliation of gross positions without the impact of master netting agreements to the balance sheet classification.

Change in Balance Sheet Carrying Value Associated with Level 3 Financial Instruments Carried at Fair Value on Recurring Basis

The following tables summarize the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.

		Year Ended December 31, 2013
		Derivative Instruments
(Dollars in millions)		Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments
Balance, beginning of period		$	(73	)		$	1,053			$	4			$	984
Total gains/(losses) (realized and unrealized):
Included in earnings(1)			9				63				(22	)			50
Included in other comprehensive income			—				—				—				—
Settlements			(23	)			(109	)			(3	)			(135	)
Transfers in and/or out of level 3			—				—				—				—
Balance, end of period		$	(87	)		$	1,007			$	(21	)		$	899
Change in unrealized gains/(losses) relating to instruments still held at the reporting date(2)		$	(2	)		$	116			$	(19	)		$	95

		Year Ended December 31, 2012
		Derivative Instruments
(Dollars in millions)		Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments
Balance, beginning of period		$	(40	)		$	1,021			$	1			$	982
Total gains/(losses) (realized and unrealized):
Included in earnings(1)			(5	)			159				3				157
Included in other comprehensive income			—				—				—				—
Settlements			(28	)			(127	)			—				(155	)
Transfers in and/or out of level 3			—				—				—				—
Balance, end of period		$	(73	)		$	1,053			$	4			$	984
Change in unrealized gains/(losses) relating to instruments still held at the reporting date(2)		$	(31	)		$	55			$	4			$	28

		Year Ended December 31, 2011
		Derivative Instruments
(Dollars in millions)		Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments
Balance, beginning of period			$(90)				$1,427				$26				$1,363
Total gains/(losses) (realized and unrealized):
Included in earnings(1)			69				(176	)			33				(74	)
Included in other comprehensive income			—				—				—				—
Settlements			(19	)			(230	)			(58	)			(307	)
Transfers in and/or out of level 3			—				—				—				—
Balance, end of period		$	(40	)		$	1,021			$	1			$	982
Change in unrealized gains/(losses) relating to instruments still held at the reporting date(2)		$	6			$	(408	)		$	11			$	(391	)

⁽¹⁾  “Included in earnings” is comprised of the following amounts recorded in the specified line item in the consolidated statements of income:

Included in Earnings

		Years Ended December 31,
(Dollars in millions)		2013				2012				2011
Gains (losses) on derivative and hedging activities, net		$	(27	)		$	37			$	(298	)
Interest expense			77				120				224
Total		$	50			$	157			$	(74	)

⁽²⁾  Recorded in “gains (losses) on derivative and hedging activities, net” in the consolidated statements of income.

Unobservable Data Used in Recurring Valuations of Level 3

The following table presents the significant inputs that are unobservable or from inactive markets used in the recurring valuations of the level 3 financial instruments detailed above.

(Dollars in millions)		Fair Value at December 31, 2013				Valuation Technique		Input		Range (Weighted Average)
Derivatives
Consumer Price Index/LIBOR basis swaps		$	33			Discounted cash flow		Bid/ask adjustment to discount rate		0.05% — 0.05% (0.05%)
Prime/LIBOR basis swaps			(120	)		Discounted cash flow		Constant Prepayment Rate		4.2%
								Bid/ask adjustment to discount rate		0.08% — 0.08% (0.08%)
Cross-currency interest rate swaps			1,007			Discounted cash flow		Constant Prepayment Rate		2.6%
Other			(21	)
Total		$	899

Fair Values of Financial Assets and Liabilities, Including Derivative Financial Instruments

The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.

		December 31, 2013												December 31, 2012
(Dollars in millions)		Fair Value				Carrying Value				Difference				Fair Value				Carrying Value				Difference
Earning assets
FFELP Loans		$	104,481			$	104,588			$	(107	)		$	125,042			$	125,612			$	(570	)
Private Education Loans			37,485				37,512				(27	)			36,081				36,934				(853	)
Cash and investments(1)			9,732				9,732				—				9,994				9,994				—
Total earning assets			151,698				151,832				(134	)			171,117				172,540				(1,423	)
Interest-bearing liabilities
Short-term borrowings			13,807				13,795				(12	)			19,861				19,856				(5	)
Long-term borrowings			133,578				136,648				3,070				146,210				152,401				6,191
Total interest-bearing liabilities			147,385				150,443				3,058				166,071				172,257				6,186
Derivative financial instruments
Floor Income Contracts			(1,384	)			(1,384	)			—				(2,154	)			(2,154	)			—
Interest rate swaps			459				459				—				1,337				1,337				—
Cross currency interest rate swaps			999				999				—				1,099				1,099				—
Other			(21	)			(21	)			—				4				4				—
Excess of net asset fair value over carrying value										$	2,924											$	4,763

⁽¹⁾  “Cash and investments” includes available-for-sale investments that consist of investments that are primarily agency securities whose cost basis is $113 million and $78 million at December 31, 2013 and 2012, respectively, versus a fair value of $109 million and $81 million at December 31, 2013 and 2012, respectively.

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