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Allowance for Loan Losses (Tables) | 9 Months Ended
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Sep. 30, 2016
Allowance for Credit Losses and Recorded Investments in Loans | Allowance for Loan Losses Metrics
|  | Three Months Ended September 30, 2016 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Other Loans |  |  | Total |
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 62 |  |  | $ | 1,410 |  |  | $ | 15 |  |  | $ | 1,487 |
Total provision |  |  | 13 |  |  |  | 92 |  |  |  | 1 |  |  |  | 106 |
Charge-offs(1) |  |  | (17 | ) |  |  | (112 | ) |  |  | (1 | ) |  |  | (130 | )
Reclassification of interest reserve(2) |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |
Ending balance |  | $ | 58 |  |  | $ | 1,392 |  |  | $ | 15 |  |  | $ | 1,465 |
Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment |  | $ | — |  |  | $ | 1,153 |  |  | $ | 11 |  |  | $ | 1,164 |
Ending balance: collectively evaluated for impairment |  | $ | 58 |  |  | $ | 239 |  |  | $ | 4 |  |  | $ | 301 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment(3) |  | $ | — |  |  | $ | 11,182 |  |  | $ | 32 |  |  | $ | 11,214 |
Ending balance: collectively evaluated for impairment(3) |  | $ | 89,291 |  |  | $ | 14,682 |  |  | $ | 99 |  |  | $ | 104,072 |
Charge-offs as a percentage of average loans in repayment (annualized) |  |  | .09 | % |  |  | 1.94 | % |  |  | 1.87 | % |  |  |  |
Allowance coverage of charge-offs (annualized) |  |  | .8 |  |  |  | 3.1 |  |  |  | 7.9 |  |  |  |  |
Allowance as a percentage of the ending total loan balance |  |  | .07 | % |  |  | 5.38 | % |  |  | 11.40 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment |  |  | .08 | % |  |  | 6.17 | % |  |  | 11.40 | % |  |  |  |
Ending total loans(3) |  | $ | 89,291 |  |  | $ | 25,864 |  |  | $ | 131 |  |  |  |  |
Average loans in repayment |  | $ | 72,921 |  |  | $ | 22,959 |  |  | $ | 102 |  |  |  |  |
Ending loans in repayment |  | $ | 72,269 |  |  | $ | 22,556 |  |  | $ | 131 |  |  |  |  |
| (1) | Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans which represents the difference between what was expected to be recovered and any shortfalls in what was actually recovered in the period. See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.
| (2) | Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.
| (3) | Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.
|  | Three Months Ended September 30, 2015 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Other Loans |  |  | Total |
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 89 |  |  | $ | 1,533 |  |  | $ | 21 |  |  | $ | 1,643 |
Total provision |  |  | 7 |  |  |  | 117 |  |  |  | (1 | ) |  |  | 123 |
Total net charge-offs(1) |  |  | (12 | ) |  |  | (148 | ) |  |  | (1 | ) |  |  | (161 | )
Reclassification of interest reserve(2) |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |
Ending balance |  | $ | 84 |  |  | $ | 1,505 |  |  | $ | 19 |  |  | $ | 1,608 |
Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment |  | $ | — |  |  | $ | 1,247 |  |  | $ | 16 |  |  | $ | 1,263 |
Ending balance: collectively evaluated for impairment |  | $ | 84 |  |  | $ | 258 |  |  | $ | 3 |  |  | $ | 345 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment(3) |  | $ | — |  |  | $ | 10,870 |  |  | $ | 41 |  |  | $ | 10,911 |
Ending balance: collectively evaluated for impairment(3) |  | $ | 97,425 |  |  | $ | 18,507 |  |  | $ | 50 |  |  | $ | 115,982 |
Net charge-offs as a percentage of average loans in repayment (annualized) |  |  | .06 | % |  |  | 2.31 | % |  |  | 5.10 | % |  |  |  |
Allowance coverage of net charge-offs (annualized) |  |  | 1.7 |  |  |  | 2.6 |  |  |  | 3.9 |  |  |  |  |
Allowance as a percentage of the ending total loan balance |  |  | .09 | % |  |  | 5.12 | % |  |  | 20.31 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment |  |  | .11 | % |  |  | 5.99 | % |  |  | 20.31 | % |  |  |  |
Ending total loans(3) |  | $ | 97,425 |  |  | $ | 29,377 |  |  | $ | 91 |  |  |  |  |
Average loans in repayment |  | $ | 75,460 |  |  | $ | 25,546 |  |  | $ | 93 |  |  |  |  |
Ending loans in repayment |  | $ | 75,294 |  |  | $ | 25,104 |  |  | $ | 91 |  |  |  |  |
| (1) | Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans which represents the difference between what was expected to be recovered and any shortfalls in what was actually recovered in the period. See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.
| (2) | Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.
| (3) | Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.
|  | Nine Months Ended September 30, 2016 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Other Loans |  |  | Total |
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 78 |  |  | $ | 1,471 |  |  | $ | 15 |  |  | $ | 1,564 |
Total provision |  |  | 30 |  |  |  | 296 |  |  |  | 1 |  |  |  | 327 |
Charge-offs(1) |  |  | (50 | ) |  |  | (383 | ) |  |  | (1 | ) |  |  | (434 | )
Reclassification of interest reserve(2) |  |  | — |  |  |  | 8 |  |  |  | — |  |  |  | 8 |
Ending balance |  | $ | 58 |  |  | $ | 1,392 |  |  | $ | 15 |  |  | $ | 1,465 |
Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment |  | $ | — |  |  | $ | 1,153 |  |  | $ | 11 |  |  | $ | 1,164 |
Ending balance: collectively evaluated for impairment |  | $ | 58 |  |  | $ | 239 |  |  | $ | 4 |  |  | $ | 301 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment(3) |  | $ | — |  |  | $ | 11,182 |  |  | $ | 32 |  |  | $ | 11,214 |
Ending balance: collectively evaluated for impairment(3) |  | $ | 89,291 |  |  | $ | 14,682 |  |  | $ | 99 |  |  | $ | 104,072 |
Charge-offs as a percentage of average loans in repayment (annualized) |  |  | .09 | % |  |  | 2.17 | % |  |  | 1.76 | % |  |  |  |
Allowance coverage of charge-offs (annualized) |  |  | .9 |  |  |  | 2.7 |  |  |  | 9.5 |  |  |  |  |
Allowance as a percentage of the ending total loan balance |  |  | .07 | % |  |  | 5.38 | % |  |  | 11.40 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment |  |  | .08 | % |  |  | 6.17 | % |  |  | 11.40 | % |  |  |  |
Ending total loans(3) |  | $ | 89,291 |  |  | $ | 25,864 |  |  | $ | 131 |  |  |  |  |
Average loans in repayment |  | $ | 73,193 |  |  | $ | 23,564 |  |  | $ | 89 |  |  |  |  |
Ending loans in repayment |  | $ | 72,269 |  |  | $ | 22,556 |  |  | $ | 131 |  |  |  |  |
| (1) | Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans which represents the difference between what was expected to be recovered and any shortfalls in what was actually recovered in the period. See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.
| (2) | Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.
| (3) | Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.
|  | Nine Months Ended September 30, 2015 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Other Loans |  |  | Total |
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 93 |  |  | $ | 1,916 |  |  | $ | 24 |  |  | $ | 2,033 |
Total provision |  |  | 19 |  |  |  | 428 |  |  |  | (1 | ) |  |  | 446 |
Net adjustment resulting from the change in the charge-off rate(1) |  |  | — |  |  |  | (330 | ) |  |  | — |  |  |  | (330 | )
Net charge-offs remaining(2) |  |  | (28 | ) |  |  | (517 | ) |  |  | (4 | ) |  |  | (549 | )
Total net charge-offs |  |  | (28 | ) |  |  | (847 | ) |  |  | (4 | ) |  |  | (879 | )
Reclassification of interest reserve(3) |  |  | — |  |  |  | 8 |  |  |  | — |  |  |  | 8 |
Ending balance |  | $ | 84 |  |  | $ | 1,505 |  |  | $ | 19 |  |  | $ | 1,608 |
Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment |  | $ | — |  |  | $ | 1,247 |  |  | $ | 16 |  |  | $ | 1,263 |
Ending balance: collectively evaluated for impairment |  | $ | 84 |  |  | $ | 258 |  |  | $ | 3 |  |  | $ | 345 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance: individually evaluated for impairment(4) |  | $ | — |  |  | $ | 10,870 |  |  | $ | 41 |  |  | $ | 10,911 |
Ending balance: collectively evaluated for impairment(4) |  | $ | 97,425 |  |  | $ | 18,507 |  |  | $ | 50 |  |  | $ | 115,982 |
Net charge-offs as a percentage of average loans in repayment, excluding the net adjustment resulting from the change in the charge-off rate (annualized)(1) |  |  | .05 | % |  |  | 2.65 | % |  |  | 5.72 | % |  |  |  |
Net adjustment resulting from the change in the charge-off rate as a percentage of average loans in repayment (annualized)(1) |  |  | — | % |  |  | 1.69 | % |  |  | — | % |  |  |  |
Allowance coverage of net charge-offs, excluding the net adjustment resulting from the change in the charge-off rate (annualized)(1) |  |  | 2.2 |  |  |  | 2.2 |  |  |  | 3.3 |  |  |  |  |
Allowance as a percentage of the ending total loan balance |  |  | .09 | % |  |  | 5.12 | % |  |  | 20.31 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment |  |  | .11 | % |  |  | 5.99 | % |  |  | 20.31 | % |  |  |  |
Ending total loans(4) |  | $ | 97,425 |  |  | $ | 29,377 |  |  | $ | 91 |  |  |  |  |
Average loans in repayment |  | $ | 76,412 |  |  | $ | 26,100 |  |  | $ | 99 |  |  |  |  |
Ending loans in repayment |  | $ | 75,294 |  |  | $ | 25,104 |  |  | $ | 91 |  |  |  |  |
| (1) | In the second quarter of 2015, the portion of the loan amount charged off at default on Private Education Loans increased from 73 percent to 79 percent. This did not impact the provision for loan losses as previously this had been reserved through the allowance for loan losses. This change resulted in a $330 million reduction to the balance of the receivable for partially charged-off loans.
| (2) | Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans which represents the difference between what was expected to be recovered and any shortfalls in what was actually recovered in the period. See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.
| (3) | Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.
| (4) | Ending total loans for Private Education Loans includes the receivable for partially charged-off loans.
Age Analysis of Past Due Loans Delinquencies | The following tables provide information regarding the loan status and aging of past due loans.
|  | FFELP Loan Delinquencies |
|  | September 30, 2016 |  |  | December 31, 2015 |
(Dollars in millions) |  | Balance |  |  | % |  |  | Balance |  |  | % |
Loans in-school/grace/deferment(1) |  | $ | 6,492 |  |  |  |  |  |  | $ | 8,257 |  |  |  |  |
Loans in forbearance(2) |  |  | 10,530 |  |  |  |  |  |  |  | 13,298 |  |  |  |  |
Loans in repayment and percentage of each status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans current |  |  | 64,078 |  |  |  | 88.7 | % |  |  | 62,651 |  |  |  | 84.7 | %
Loans delinquent 31-60 days(3) |  |  | 2,462 |  |  |  | 3.4 |  |  |  | 3,285 |  |  |  | 4.5 |
Loans delinquent 61-90 days(3) |  |  | 818 |  |  |  | 1.1 |  |  |  | 1,856 |  |  |  | 2.5 |
Loans delinquent greater than 90 days(3) |  |  | 4,911 |  |  |  | 6.8 |  |  |  | 6,142 |  |  |  | 8.3 |
Total FFELP Loans in repayment |  |  | 72,269 |  |  |  | 100 | % |  |  | 73,934 |  |  |  | 100 | %
Total FFELP Loans, gross |  |  | 89,291 |  |  |  |  |  |  |  | 95,489 |  |  |  |  |
FFELP Loan unamortized premium |  |  | 913 |  |  |  |  |  |  |  | 1,087 |  |  |  |  |
Total FFELP Loans |  |  | 90,204 |  |  |  |  |  |  |  | 96,576 |  |  |  |  |
FFELP Loan allowance for losses |  |  | (58 | ) |  |  |  |  |  |  | (78 | ) |  |  |  |
FFELP Loans, net |  | $ | 90,146 |  |  |  |  |  |  | $ | 96,498 |  |  |  |  |
Percentage of FFELP Loans in repayment |  |  |  |  |  |  | 80.9 | % |  |  |  |  |  |  | 77.4 | %
Delinquencies as a percentage of FFELP Loans in repayment |  |  |  |  |  |  | 11.3 | % |  |  |  |  |  |  | 15.3 | %
FFELP Loans in forbearance as a percentage of loans in repayment and forbearance |  |  |  |  |  |  | 12.7 | % |  |  |  |  |  |  | 15.2 | %
(1) | Loans for customers who may still be attending school or engaging in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation, as well as loans for customers who have requested and qualify for other permitted program deferments such as military, unemployment, or economic hardships.
(2) | Loans for customers who have used their allowable deferment time or do not qualify for deferment, that need additional time to obtain employment or who have temporarily ceased making full payments due to hardship or other factors.
(3) | The period of delinquency is based on the number of days scheduled payments are contractually past due.
|  | Traditional Private Education Loan Delinquencies |
|  | September 30, 2016 |  |  | December 31, 2015 |
(Dollars in millions) |  | Balance |  |  | % |  |  | Balance |  |  | % |
Loans in-school/grace/deferment(1) |  | $ | 1,405 |  |  |  |  |  |  | $ | 1,859 |  |  |  |  |
Loans in forbearance(2) |  |  | 833 |  |  |  |  |  |  |  | 863 |  |  |  |  |
Loans in repayment and percentage of each status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans current |  |  | 19,471 |  |  |  | 93.8 | % |  |  | 21,085 |  |  |  | 93.5 | %
Loans delinquent 31-60 days(3) |  |  | 434 |  |  |  | 2.1 |  |  |  | 491 |  |  |  | 2.2 |
Loans delinquent 61-90 days(3) |  |  | 262 |  |  |  | 1.3 |  |  |  | 292 |  |  |  | 1.3 |
Loans delinquent greater than 90 days(3) |  |  | 601 |  |  |  | 2.8 |  |  |  | 690 |  |  |  | 3.0 |
Total traditional loans in repayment |  |  | 20,768 |  |  |  | 100 | % |  |  | 22,558 |  |  |  | 100 | %
Total traditional loans, gross |  |  | 23,006 |  |  |  |  |  |  |  | 25,280 |  |  |  |  |
Traditional loans unamortized discount |  |  | (407 | ) |  |  |  |  |  |  | (470 | ) |  |  |  |
Total traditional loans |  |  | 22,599 |  |  |  |  |  |  |  | 24,810 |  |  |  |  |
Traditional loans receivable for partially charged-off loans |  |  | 532 |  |  |  |  |  |  |  | 560 |  |  |  |  |
Traditional loans allowance for losses |  |  | (1,176 | ) |  |  |  |  |  |  | (1,236 | ) |  |  |  |
Traditional loans, net |  | $ | 21,955 |  |  |  |  |  |  | $ | 24,134 |  |  |  |  |
Percentage of traditional loans in repayment |  |  |  |  |  |  | 90.3 | % |  |  |  |  |  |  | 89.2 | %
Delinquencies as a percentage of traditional loans in repayment |  |  |  |  |  |  | 6.2 | % |  |  |  |  |  |  | 6.5 | %
Loans in forbearance as a percentage of loans in repayment and forbearance |  |  |  |  |  |  | 3.9 | % |  |  |  |  |  |  | 3.7 | %
(1) | Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.
(2) | Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
(3) | The period of delinquency is based on the number of days scheduled payments are contractually past due.
|  | Non-Traditional Private Education Loan Delinquencies |
|  | September 30, 2016 |  |  | December 31, 2015 |
(Dollars in millions) |  | Balance |  |  | % |  |  | Balance |  |  | % |
Loans in-school/grace/deferment(1) |  | $ | 134 |  |  |  |  |  |  | $ | 181 |  |  |  |  |
Loans in forbearance(2) |  |  | 108 |  |  |  |  |  |  |  | 110 |  |  |  |  |
Loans in repayment and percentage of each status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans current |  |  | 1,539 |  |  |  | 86.1 | % |  |  | 1,646 |  |  |  | 84.7 | %
Loans delinquent 31-60 days(3) |  |  | 73 |  |  |  | 4.1 |  |  |  | 86 |  |  |  | 4.4 |
Loans delinquent 61-90 days(3) |  |  | 52 |  |  |  | 2.9 |  |  |  | 56 |  |  |  | 2.9 |
Loans delinquent greater than 90 days(3) |  |  | 124 |  |  |  | 6.9 |  |  |  | 156 |  |  |  | 8.0 |
Total non-traditional loans in repayment |  |  | 1,788 |  |  |  | 100 | % |  |  | 1,944 |  |  |  | 100 | %
Total non-traditional loans, gross |  |  | 2,030 |  |  |  |  |  |  |  | 2,235 |  |  |  |  |
Non-traditional loans unamortized discount |  |  | (55 | ) |  |  |  |  |  |  | (61 | ) |  |  |  |
Total non-traditional loans |  |  | 1,975 |  |  |  |  |  |  |  | 2,174 |  |  |  |  |
Non-traditional loans receivable for partially charged-off loans |  |  | 296 |  |  |  |  |  |  |  | 321 |  |  |  |  |
Non-traditional loans allowance for losses |  |  | (216 | ) |  |  |  |  |  |  | (235 | ) |  |  |  |
Non-traditional loans, net |  | $ | 2,055 |  |  |  |  |  |  | $ | 2,260 |  |  |  |  |
Percentage of non-traditional loans in repayment |  |  |  |  |  |  | 88.1 | % |  |  |  |  |  |  | 87.0 | %
Delinquencies as a percentage of non-traditional loans in repayment |  |  |  |  |  |  | 13.9 | % |  |  |  |  |  |  | 15.3 | %
Loans in forbearance as a percentage of loans in repayment and forbearance |  |  |  |  |  |  | 5.7 | % |  |  |  |  |  |  | 5.4 | %
(1) | Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.
(2) | Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
(3) | The period of delinquency is based on the number of days scheduled payments are contractually past due.
Recorded Investment, Unpaid Principal Balance and Related Allowance for TDR Loans | The following table provides the recorded investment, unpaid principal balance and related allowance for our TDR loans.
|  | TDR Loans |
(Dollars in millions) |  | Recorded Investment(1) |  |  | Unpaid Principal Balance |  |  | Related Allowance |
September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loans — Traditional |  | $ | 9,391 |  |  | $ | 9,434 |  |  | $ | 959 |
Private Education Loans — Non-Traditional |  |  | 1,394 |  |  |  | 1,398 |  |  |  | 194 |
Total |  | $ | 10,785 |  |  | $ | 10,832 |  |  | $ | 1,153 |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loans — Traditional |  | $ | 9,134 |  |  | $ | 9,200 |  |  | $ | 995 |
Private Education Loans — Non-Traditional |  |  | 1,441 |  |  |  | 1,442 |  |  |  | 214 |
Total |  | $ | 10,575 |  |  | $ | 10,642 |  |  | $ | 1,209 |
| (1) | The recorded investment is equal to the unpaid principal balance and accrued interest receivable net of unamortized deferred fees and costs.
Average Recorded Investment and Interest Income Recognized for TDR | The following tables provide the average recorded investment and interest income recognized for our TDR loans.
|  | Three Months Ended September 30, |
|  | 2016 |  |  | 2015 |
(Dollars in millions) |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Private Education Loans — Traditional |  | $ | 9,367 |  |  | $ | 140 |  |  | $ | 8,988 |  |  | $ | 134 |
Private Education Loans — Non-Traditional |  |  | 1,402 |  |  |  | 27 |  |  |  | 1,456 |  |  |  | 29 |
Total |  | $ | 10,769 |  |  | $ | 167 |  |  | $ | 10,444 |  |  | $ | 163 |
|  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |
(Dollars in millions) |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Private Education Loans — Traditional |  | $ | 9,303 |  |  | $ | 416 |  |  | $ | 8,930 |  |  | $ | 402 |
Private Education Loans — Non-Traditional |  |  | 1,418 |  |  |  | 81 |  |  |  | 1,466 |  |  |  | 86 |
Total |  | $ | 10,721 |  |  | $ | 497 |  |  | $ | 10,396 |  |  | $ | 488 |
Loans Modified Accounts for TDR | The following table provides the amount of loans modified in the periods presented that resulted in a TDR. Additionally, the table summarizes charge-offs occurring in the TDR portfolio, as well as TDRs for which a payment default occurred in the current period within 12 months of the loan first being designated as a TDR. We define payment default as 60 days past due for this disclosure. The majority of our loans that are considered TDRs involve a temporary forbearance of payments and do not change the contractual interest rate of the loan or do not involve an extended repayment plan.
|  | Three Months Ended September 30, |
|  | 2016 |  |  | 2015 |
(Dollars in millions) |  | Modified Loans(1) |  |  | Charge- Offs(2) |  |  | Payment Default |  |  | Modified Loans(1) |  |  | Charge- Offs(2) |  |  | Payment Default |
Private Education Loans — Traditional |  | $ | 233 |  |  | $ | 68 |  |  | $ | 56 |  |  | $ | 339 |  |  | $ | 81 |  |  | $ | 83 |
Private Education Loans — Non-Traditional |  |  | 21 |  |  |  | 18 |  |  |  | 11 |  |  |  | 32 |  |  |  | 26 |  |  |  | 15 |
Total |  | $ | 254 |  |  | $ | 86 |  |  | $ | 67 |  |  | $ | 371 |  |  | $ | 107 |  |  | $ | 98 |
|  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |
(Dollars in millions) |  | Modified Loans(1) |  |  | Charge- Offs(2) |  |  | Payment Default |  |  | Modified Loans(1) |  |  | Charge- Offs(2) |  |  | Payment Default |
Private Education Loans — Traditional |  | $ | 861 |  |  | $ | 221 |  |  | $ | 174 |  |  | $ | 1,107 |  |  | $ | 273 |  |  | $ | 266 |
Private Education Loans — Non-Traditional |  |  | 73 |  |  |  | 61 |  |  |  | 32 |  |  |  | 111 |  |  |  | 84 |  |  |  | 47 |
Total |  | $ | 934 |  |  | $ | 282 |  |  | $ | 206 |  |  | $ | 1,218 |  |  | $ | 357 |  |  | $ | 313 |
(1) | Represents period ending balance of loans that have been modified during the period and resulted in a TDR.
(2) | Represents loans that charged off that were classified as TDRs.
Troubled Debt Restructuring Loans [Member] |
Age Analysis of Past Due Loans Delinquencies | The following table provides information regarding the loan status and aging of TDR loans that are past due.
|  | TDR Loan Delinquencies |
|  | September 30, 2016 |  |  | December 31, 2015 |
(Dollars in millions) |  | Balance |  |  | % |  |  | Balance |  |  | % |
Loans in deferment(1) |  | $ | 605 |  |  |  |  |  |  | $ | 706 |  |  |  |  |
Loans in forbearance(2) |  |  | 669 |  |  |  |  |  |  |  | 695 |  |  |  |  |
Loans in repayment and percentage of each status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans current |  |  | 8,299 |  |  |  | 86.8 | % |  |  | 7,885 |  |  |  | 85.3 | %
Loans delinquent 31-60 days(3) |  |  | 394 |  |  |  | 4.1 |  |  |  | 414 |  |  |  | 4.5 |
Loans delinquent 61-90 days(3) |  |  | 254 |  |  |  | 2.7 |  |  |  | 263 |  |  |  | 2.8 |
Loans delinquent greater than 90 days(3) |  |  | 611 |  |  |  | 6.4 |  |  |  | 679 |  |  |  | 7.4 |
Total TDR loans in repayment |  |  | 9,558 |  |  |  | 100 | % |  |  | 9,241 |  |  |  | 100 | %
Total TDR loans, gross |  | $ | 10,832 |  |  |  |  |  |  | $ | 10,642 |  |  |  |  |
(1) | Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation.
(2) | Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
(3) | The period of delinquency is based on the number of days scheduled payments are contractually past due.
Private Education Loans [Member] |
Private Education Loan Portfolio Stratified by Key Credit Quality Indicators | The following table highlights the principal balance (excluding the receivable for partially charged-off loans) of our Private Education Loan portfolio stratified by the key credit quality indicators.
|  | Private Education Loans Credit Quality Indicators |
|  | September 30, 2016 |  |  | December 31, 2015 |
(Dollars in millions) |  | Balance(3) |  |  | % of Balance |  |  | Balance(3) |  |  | % of Balance |
Credit Quality Indicators |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
School Type/FICO Scores: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Traditional |  | $ | 23,006 |  |  |  | 92 | % |  | $ | 25,280 |  |  |  | 92 | %
Non-Traditional(1) |  |  | 2,030 |  |  |  | 8 |  |  |  | 2,235 |  |  |  | 8 |
Total |  | $ | 25,036 |  |  |  | 100 | % |  | $ | 27,515 |  |  |  | 100 | %
Cosigners: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With cosigner |  | $ | 16,107 |  |  |  | 64 | % |  | $ | 17,738 |  |  |  | 64 | %
Without cosigner |  |  | 8,929 |  |  |  | 36 |  |  |  | 9,777 |  |  |  | 36 |
Total |  | $ | 25,036 |  |  |  | 100 | % |  | $ | 27,515 |  |  |  | 100 | %
Seasoning(2): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-12 payments |  | $ | 1,348 |  |  |  | 5 | % |  | $ | 1,776 |  |  |  | 7 | %
13-24 payments |  |  | 1,430 |  |  |  | 6 |  |  |  | 1,977 |  |  |  | 7 |
25-36 payments |  |  | 2,234 |  |  |  | 9 |  |  |  | 2,982 |  |  |  | 11 |
37-48 payments |  |  | 3,172 |  |  |  | 13 |  |  |  | 3,787 |  |  |  | 14 |
More than 48 payments |  |  | 15,313 |  |  |  | 61 |  |  |  | 14,953 |  |  |  | 54 |
Not yet in repayment |  |  | 1,539 |  |  |  | 6 |  |  |  | 2,040 |  |  |  | 7 |
Total |  | $ | 25,036 |  |  |  | 100 | % |  | $ | 27,515 |  |  |  | 100 | %
(1) | Defined as loans to customers attending for-profit schools (with a FICO score of less than 670 at origination) and customers attending not-for-profit schools (with a FICO score of less than 640 at origination).
(2) | Number of months in active repayment for which a scheduled payment was received.
(3) | Balance represents gross Private Education Loans.
Receivable for Partially Charged-Off Loans | The following table summarizes the activity in the receivable for partially charged-off Private Education Loans.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(Dollars in millions) |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Receivable at beginning of period |  | $ | 847 |  |  | $ | 902 |  |  | $ | 881 |  |  | $ | 1,245 |
Expected future recoveries of current period defaults(1) |  |  | 28 |  |  |  | 38 |  |  |  | 96 |  |  |  | 147 |
Recoveries(2) |  |  | (47 | ) |  |  | (48 | ) |  |  | (149 | ) |  |  | (151 | )
Net adjustment resulting from the change in the charge-off rate(3) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (330 | )
Net charge-offs remaining |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (19 | )
Total net charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (349 | )
Receivable at end of period |  | $ | 828 |  |  | $ | 892 |  |  | $ | 828 |  |  | $ | 892 |
| (1) | Represents the difference between the defaulted loan balance and our estimate of the amount to be collected in the future.
| (2) | Current period cash collections.
| (3) | Prior to second-quarter 2015, charge-offs represent the current period recovery shortfall — the difference between what was expected to be collected and what was actually collected. In the second quarter of 2015, the portion of the loan amount charged off at default increased from 73 percent to 79 percent. This change resulted in a $330 million reduction to the balance of the receivable for partially charged-off loans. These amounts are included in total charge-offs as reported in the “Allowance for Private Education Loan Losses” table.
Accrued Interest Receivable | The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans greater than 90 days past due as compared to our allowance for uncollectible interest.
(Dollars in millions) |  | Accrued Interest Receivable |  |  | Greater Than 90 Days Past Due |  |  | Allowance for Uncollectible Interest |
September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loans — Traditional |  | $ | 374 |  |  | $ | 23 |  |  | $ | 26 |
Private Education Loans — Non-Traditional |  |  | 48 |  |  |  | 7 |  |  |  | 7 |
Total |  | $ | 422 |  |  | $ | 30 |  |  | $ | 33 |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |
Private Education Loans — Traditional |  | $ | 433 |  |  | $ | 27 |  |  | $ | 26 |
Private Education Loans — Non-Traditional |  |  | 57 |  |  |  | 8 |  |  |  | 9 |
Total |  | $ | 490 |  |  | $ | 35 |  |  | $ | 35 |

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