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Segment Reporting (Tables) | 6 Months Ended
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Jun. 30, 2025
Segment Results and Reconciliations to GAAP | Segment Results and Reconciliations to GAAP
|  | Three Months Ended June 30, 2025 |
|  |  |  |  | Adjustments |  |  |  |  |  | Reportable Segments |
(Dollars in millions) |  | Total GAAP |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments (1) |  |  | Total Core Earnings |  |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 756 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 483 |  |  | $ | 273 |  |  | $ | — |  |  | $ | — |
Cash and investments |  |  | 22 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10 |  |  |  | 5 |  |  |  | — |  |  |  | 7 |
Total interest income |  |  | 778 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 493 |  |  |  | 278 |  |  |  | — |  |  |  | 7 |
Total interest expense |  |  | 650 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 438 |  |  |  | 183 |  |  |  | — |  |  |  | 26 |
Net interest income (loss) |  |  | 128 |  |  | $ | 5 |  |  | $ | (2 | ) |  | $ | 3 |  |  | $ | 131 |  |  |  | 55 |  |  |  | 95 |  |  |  | — |  |  |  | (19 | )
Less: provisions for loan losses |  |  | 37 |  |  |  |  |  |  |  |  |  |  |  |  | 37 |  |  |  | 8 |  |  |  | 29 |  |  |  | — |  |  |  | — |
Net interest income (loss) after provisions for loan losses |  |  | 91 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 47 |  |  |  | 66 |  |  |  | — |  |  |  | (19 | )
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11 |  |  |  | 3 |  |  |  | — |  |  |  | — |
Asset recovery and business processing revenue |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other revenue (loss) |  |  | 14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 20 |
Total other income |  |  | 28 |  |  |  | (5 | ) |  |  | 10 |  |  |  | 5 |  |  |  | 33 |  |  |  | 10 |  |  |  | 3 |  |  |  | — |  |  |  | 20 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 53 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 17 |  |  |  | 36 |  |  |  | — |  |  |  | — |
Unallocated shared services expenses |  |  | 47 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 47 |
Operating expenses(2) |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 100 |  |  |  | 17 |  |  |  | 36 |  |  |  | — |  |  |  | 47 |
Goodwill and acquired intangible asset impairment and amortization |  |  | 1 |  |  |  | — |  |  |  | (1 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restructuring/other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total expenses |  |  | 101 |  |  |  | — |  |  |  | (1 | ) |  |  | (1 | ) |  |  | 100 |  |  |  | 17 |  |  |  | 36 |  |  |  | — |  |  |  | 47 |
Income (loss) before income tax expense (benefit) |  |  | 18 |  |  |  | — |  |  |  | 9 |  |  |  | 9 |  |  |  | 27 |  |  |  | 40 |  |  |  | 33 |  |  |  | — |  |  |  | (46 | )
Income tax expense (benefit)(3) |  |  | 4 |  |  |  | — |  |  |  | 2 |  |  |  | 2 |  |  |  | 6 |  |  |  | 10 |  |  |  | 7 |  |  |  | — |  |  |  | (11 | )
Net income (loss) |  | $ | 14 |  |  | $ | — |  |  | $ | 7 |  |  | $ | 7 |  |  | $ | 21 |  |  | $ | 30 |  |  | $ | 26 |  |  | $ | — |  |  | $ | (35 | )
(1) Core Earnings adjustments to GAAP:
|  | Three Months Ended June 30, 2025 |
(Dollars in millions) |  | Net Impact of Derivative Accounting |  |  | Net Impact of Goodwill and Acquired Intangibles |  |  | Total |
Net interest income (loss) after provisions for loan losses |  | $ | 3 |  |  | $ | — |  |  | $ | 3 |
Total other income (loss) |  |  | 5 |  |  |  | — |  |  |  | 5 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | (1 | ) |  |  | (1 | )
Total Core Earnings adjustments to GAAP |  | $ | 8 |  |  | $ | 1 |  |  |  | 9 |
Income tax expense (benefit) |  |  |  |  |  |  |  |  | 2 |
Net income (loss) |  |  |  |  |  |  |  | $ | 7 |
(2) Reportable segment significant operating expenses are comprised of:
|  | Three Months Ended June 30, 2025 |
(Dollars in millions) |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |  |  | Total |
Servicing expenses |  | $ | 16 |  |  | $ | 14 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 32 |
Information technology expenses |  |  | — |  |  |  | 8 |  |  |  | — |  |  |  | 20 |  |  |  | 28 |
Corporate expenses |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 19 |  |  |  | 20 |
Other/remaining expenses |  |  | 1 |  |  |  | 13 |  |  |  | — |  |  |  | 6 |  |  |  | 20 |
Operating expenses |  | $ | 17 |  |  | $ | 36 |  |  | $ | — |  |  | $ | 47 |  |  | $ | 100 |
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment 11. Segment Reporting (Continued)
|  | Three Months Ended June 30, 2024 |
|  |  |  |  | Adjustments |  |  |  |  |  | Reportable Segments |
(Dollars in millions) |  | Total GAAP |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments (1) |  |  | Total Core Earnings |  |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 925 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 608 |  |  | $ | 317 |  |  | $ | — |  |  | $ | — |
Cash and investments |  |  | 48 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 28 |  |  |  | 7 |  |  |  | — |  |  |  | 13 |
Total interest income |  |  | 973 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 636 |  |  |  | 324 |  |  |  | — |  |  |  | 13 |
Total interest expense |  |  | 843 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 603 |  |  |  | 198 |  |  |  | — |  |  |  | 36 |
Net interest income (loss) |  |  | 130 |  |  | $ | 9 |  |  | $ | (3 | ) |  | $ | 6 |  |  | $ | 136 |  |  |  | 33 |  |  |  | 126 |  |  |  | — |  |  |  | (23 | )
Less: provisions for loan losses |  |  | 14 |  |  |  |  |  |  |  |  |  |  |  |  | 14 |  |  |  | (2 | ) |  |  | 16 |  |  |  | — |  |  |  | — |
Net interest income (loss) after provisions for loan losses |  |  | 116 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35 |  |  |  | 110 |  |  |  | — |  |  |  | (23 | )
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 18 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15 |  |  |  | 3 |  |  |  | — |  |  |  | — |
Asset recovery and business processing revenue |  |  | 81 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 81 |  |  |  | — |
Other revenue |  |  | 18 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |
Total other income |  |  | 117 |  |  |  | (9 | ) |  |  | (5 | ) |  |  | (14 | ) |  |  | 103 |  |  |  | 17 |  |  |  | 3 |  |  |  | 81 |  |  |  | 2 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 112 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16 |  |  |  | 34 |  |  |  | 62 |  |  |  | — |
Unallocated shared services expenses |  |  | 54 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 54 |
Operating expenses(2) |  |  | 166 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 166 |  |  |  | 16 |  |  |  | 34 |  |  |  | 62 |  |  |  | 54 |
Goodwill and acquired intangible asset impairment and amortization |  |  | 3 |  |  |  | — |  |  |  | (3 | ) |  |  | (3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restructuring/other reorganization expenses |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |
Total expenses |  |  | 185 |  |  |  | — |  |  |  | (3 | ) |  |  | (3 | ) |  |  | 182 |  |  |  | 16 |  |  |  | 34 |  |  |  | 62 |  |  |  | 70 |
Income (loss) before income tax expense (benefit) |  |  | 48 |  |  |  | — |  |  |  | (5 | ) |  |  | (5 | ) |  |  | 43 |  |  |  | 36 |  |  |  | 79 |  |  |  | 19 |  |  |  | (91 | )
Income tax expense (benefit)(3) |  |  | 12 |  |  |  | — |  |  |  | (2 | ) |  |  | (2 | ) |  |  | 10 |  |  |  | 8 |  |  |  | 19 |  |  |  | 4 |  |  |  | (21 | )
Net income (loss) |  | $ | 36 |  |  | $ | — |  |  | $ | (3 | ) |  | $ | (3 | ) |  | $ | 33 |  |  | $ | 28 |  |  | $ | 60 |  |  | $ | 15 |  |  | $ | (70 | )
(1) Core Earnings adjustments to GAAP:
|  | Three Months Ended June 30, 2024 |
(Dollars in millions) |  | Net Impact of Derivative Accounting |  |  | Net Impact of Goodwill and Acquired Intangibles |  |  | Total |
Net interest income (loss) after provisions for loan losses |  | $ | 6 |  |  | $ | — |  |  | $ | 6 |
Total other income (loss) |  |  | (14 | ) |  |  | — |  |  |  | (14 | )
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | (3 | ) |  |  | (3 | )
Total Core Earnings adjustments to GAAP |  | $ | (8 | ) |  | $ | 3 |  |  |  | (5 | )
Income tax expense (benefit) |  |  |  |  |  |  |  |  | (2 | )
Net income (loss) |  |  |  |  |  |  |  | $ | (3 | )
(2) Reportable segment significant operating expenses are comprised of:
|  | Three Months Ended June 30, 2024 |
(Dollars in millions) |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |  |  | Total |
Servicing expenses |  | $ | 10 |  |  | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | 23 |
Information technology expenses |  |  | 3 |  |  |  | 7 |  |  |  | 4 |  |  |  | 20 |  |  |  | 34 |
Corporate expenses |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 21 |  |  |  | 24 |
Other/remaining expenses |  |  | 2 |  |  |  | 13 |  |  |  | 57 |  |  |  | 13 |  |  |  | 85 |
Operating expenses |  | $ | 16 |  |  | $ | 34 |  |  | $ | 62 |  |  | $ | 54 |  |  | $ | 166 |
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment 11. Segment Reporting (Continued)
|  | Six Months Ended June 30, 2025 |
|  |  |  |  | Adjustments |  |  |  |  |  | Reportable Segments |
(Dollars in millions) |  | Total GAAP |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments (1) |  |  | Total Core Earnings |  |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 1,537 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 975 |  |  | $ | 562 |  |  | $ | — |  |  | $ | — |
Cash and investments |  |  | 43 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 20 |  |  |  | 10 |  |  |  | — |  |  |  | 13 |
Total interest income |  |  | 1,580 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 995 |  |  |  | 572 |  |  |  | — |  |  |  | 13 |
Total interest expense |  |  | 1,322 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 892 |  |  |  | 364 |  |  |  | — |  |  |  | 49 |
Net interest income (loss) |  |  | 258 |  |  | $ | 11 |  |  | $ | 6 |  |  | $ | 17 |  |  | $ | 275 |  |  |  | 103 |  |  |  | 208 |  |  |  | — |  |  |  | (36 | )
Less: provisions for loan losses |  |  | 67 |  |  |  |  |  |  |  |  |  |  |  |  | 67 |  |  |  | 16 |  |  |  | 51 |  |  |  | — |  |  |  | — |
Net interest income (loss) after provisions for loan losses |  |  | 191 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 87 |  |  |  | 157 |  |  |  | — |  |  |  | (36 | )
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 27 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 21 |  |  |  | 6 |  |  |  | — |  |  |  | — |
Asset recovery and business processing revenue |  |  | 23 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 23 |  |  |  | — |
Other revenue |  |  | 3 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 34 |
Total other income (loss) |  |  | 53 |  |  |  | (11 | ) |  |  | 41 |  |  |  | 30 |  |  |  | 83 |  |  |  | 20 |  |  |  | 6 |  |  |  | 23 |  |  |  | 34 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 127 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 37 |  |  |  | 70 |  |  |  | 20 |  |  |  | — |
Unallocated shared services expenses |  |  | 100 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 100 |
Operating expenses(2) |  |  | 227 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 227 |  |  |  | 37 |  |  |  | 70 |  |  |  | 20 |  |  |  | 100 |
Goodwill and acquired intangible asset impairment and amortization |  |  | 2 |  |  |  | — |  |  |  | (2 | ) |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restructuring/other reorganization expenses |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
Total expenses |  |  | 232 |  |  |  | — |  |  |  | (2 | ) |  |  | (2 | ) |  |  | 230 |  |  |  | 37 |  |  |  | 70 |  |  |  | 20 |  |  |  | 103 |
Income (loss) before income tax expense (benefit) |  |  | 12 |  |  |  | — |  |  |  | 49 |  |  |  | 49 |  |  |  | 61 |  |  |  | 70 |  |  |  | 93 |  |  |  | 3 |  |  |  | (105 | )
Income tax expense (benefit)(3) |  |  | 1 |  |  |  | — |  |  |  | 13 |  |  |  | 13 |  |  |  | 14 |  |  |  | 16 |  |  |  | 21 |  |  |  | 1 |  |  |  | (24 | )
Net income (loss) |  | $ | 11 |  |  | $ | — |  |  | $ | 36 |  |  | $ | 36 |  |  | $ | 47 |  |  | $ | 54 |  |  | $ | 72 |  |  | $ | 2 |  |  | $ | (81 | )
(1) Core Earnings adjustments to GAAP:
|  | Six Months Ended June 30, 2025 |
(Dollars in millions) |  | Net Impact of Derivative Accounting |  |  | Net Impact of Goodwill and Acquired Intangibles |  |  | Total |
Net interest income (loss) after provisions for loan losses |  | $ | 17 |  |  | $ | — |  |  | $ | 17 |
Total other income (loss) |  |  | 30 |  |  |  | — |  |  |  | 30 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | (2 | ) |  |  | (2 | )
Total Core Earnings adjustments to GAAP |  | $ | 47 |  |  | $ | 2 |  |  |  | 49 |
Income tax expense (benefit) |  |  |  |  |  |  |  |  | 13 |
Net income (loss) |  |  |  |  |  |  |  | $ | 36 |
(2) Reportable segment significant operating expenses are comprised of:
|  | Six Months Ended June 30, 2025 |
(Dollars in millions) |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |  |  | Total |
Servicing expenses |  | $ | 34 |  |  | $ | 28 |  |  | $ | — |  |  | $ | 5 |  |  | $ | 67 |
Information technology expenses |  |  | — |  |  |  | 17 |  |  |  | 1 |  |  |  | 41 |  |  |  | 59 |
Corporate expenses |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 43 |  |  |  | 45 |
Other/remaining expenses |  |  | 2 |  |  |  | 24 |  |  |  | 19 |  |  |  | 11 |  |  |  | 56 |
Operating expenses |  | $ | 37 |  |  | $ | 70 |  |  | $ | 20 |  |  | $ | 100 |  |  | $ | 227 |
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment 11. Segment Reporting (Continued)
|  | Six Months Ended June 30, 2024 |
|  |  |  |  | Adjustments |  |  |  |  |  | Reportable Segments |
(Dollars in millions) |  | Total GAAP |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments (1) |  |  | Total Core Earnings |  |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 1,914 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1,269 |  |  | $ | 645 |  |  | $ | — |  |  | $ | — |
Cash and investments |  |  | 86 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 51 |  |  |  | 14 |  |  |  | — |  |  |  | 21 |
Total interest income |  |  | 2,000 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,320 |  |  |  | 659 |  |  |  | — |  |  |  | 21 |
Total interest expense |  |  | 1,718 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,233 |  |  |  | 400 |  |  |  | — |  |  |  | 68 |
Net interest income (loss) |  |  | 282 |  |  | $ | 19 |  |  | $ | (2 | ) |  | $ | 17 |  |  | $ | 299 |  |  |  | 87 |  |  |  | 259 |  |  |  | — |  |  |  | (47 | )
Less: provisions for loan losses |  |  | 26 |  |  |  |  |  |  |  |  |  |  |  |  | 26 |  |  |  | (1 | ) |  |  | 27 |  |  |  | — |  |  |  | — |
Net interest income (loss) after provisions for loan losses |  |  | 256 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 88 |  |  |  | 232 |  |  |  | — |  |  |  | (47 | )
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 35 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 28 |  |  |  | 7 |  |  |  | — |  |  |  | — |
Asset recovery and business processing revenue |  |  | 158 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 158 |  |  |  | — |
Other revenue |  |  | 59 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5 |  |  |  | 1 |  |  |  | — |  |  |  | 7 |
Total other income (loss) |  |  | 252 |  |  |  | (19 | ) |  |  | (27 | ) |  |  | (46 | ) |  |  | 206 |  |  |  | 33 |  |  |  | 8 |  |  |  | 158 |  |  |  | 7 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 231 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 33 |  |  |  | 67 |  |  |  | 131 |  |  |  | — |
Unallocated shared services expenses |  |  | 119 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 119 |
Operating expenses(2) |  |  | 350 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 350 |  |  |  | 33 |  |  |  | 67 |  |  |  | 131 |  |  |  | 119 |
Goodwill and acquired intangible asset impairment and amortization |  |  | 5 |  |  |  | — |  |  |  | (5 | ) |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Restructuring/other reorganization expenses |  |  | 17 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17 |
Total expenses |  |  | 372 |  |  |  | — |  |  |  | (5 | ) |  |  | (5 | ) |  |  | 367 |  |  |  | 33 |  |  |  | 67 |  |  |  | 131 |  |  |  | 136 |
Income (loss) before income tax expense (benefit) |  |  | 136 |  |  |  | — |  |  |  | (24 | ) |  |  | (24 | ) |  |  | 112 |  |  |  | 88 |  |  |  | 173 |  |  |  | 27 |  |  |  | (176 | )
Income tax expense (benefit)(3) |  |  | 27 |  |  |  | — |  |  |  | (1 | ) |  |  | (1 | ) |  |  | 26 |  |  |  | 20 |  |  |  | 40 |  |  |  | 6 |  |  |  | (40 | )
Net income (loss) |  | $ | 109 |  |  | $ | — |  |  | $ | (23 | ) |  | $ | (23 | ) |  | $ | 86 |  |  | $ | 68 |  |  | $ | 133 |  |  | $ | 21 |  |  | $ | (136 | )
(1) Core Earnings adjustments to GAAP:
|  | Six Months Ended June 30, 2024 |
(Dollars in millions) |  | Net Impact of Derivative Accounting |  |  | Net Impact of Goodwill and Acquired Intangibles |  |  | Total |
Net interest income (loss) after provisions for loan losses |  | $ | 17 |  |  | $ | — |  |  | $ | 17 |
Total other income (loss) |  |  | (46 | ) |  |  | — |  |  |  | (46 | )
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | (5 | ) |  |  | (5 | )
Total Core Earnings adjustments to GAAP |  | $ | (29 | ) |  | $ | 5 |  |  |  | (24 | )
Income tax expense (benefit) |  |  |  |  |  |  |  |  | (1 | )
Net income (loss) |  |  |  |  |  |  |  | $ | (23 | )
(2) Reportable segment significant operating expenses are comprised of:
|  | Six Months Ended June 30, 2024 |
(Dollars in millions) |  | Federal Education Loans |  |  | Consumer Lending |  |  | Business Processing |  |  | Other |  |  | Total |
Servicing expenses |  | $ | 22 |  |  | $ | 26 |  |  | $ | — |  |  | $ | — |  |  | $ | 48 |
Information technology expenses |  |  | 6 |  |  |  | 14 |  |  |  | 9 |  |  |  | 42 |  |  |  | 71 |
Corporate expenses |  |  | 2 |  |  |  | 2 |  |  |  | 2 |  |  |  | 49 |  |  |  | 55 |
Other/remaining expenses |  |  | 3 |  |  |  | 25 |  |  |  | 120 |  |  |  | 28 |  |  |  | 176 |
Operating expenses |  | $ | 33 |  |  | $ | 67 |  |  | $ | 131 |  |  | $ | 119 |  |  | $ | 350 |
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment
Core Earnings Adjustments to GAAP | Summary of Core Earnings Adjustments to GAAP
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(Dollars in millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
GAAP net income (loss) |  | $ | 14 |  |  | $ | 36 |  |  | $ | 11 |  |  | $ | 109 |
Core Earnings adjustments to GAAP: |  |  |  |  |  |  |  |  |  |  |  |
Net impact of derivative accounting(1) |  |  | 8 |  |  |  | (8 | ) |  |  | 47 |  |  |  | (29 | )
Net impact of goodwill and acquired intangible assets(2) |  |  | 1 |  |  |  | 3 |  |  |  | 2 |  |  |  | 5 |
Net tax effect(3) |  |  | (2 | ) |  |  | 2 |  |  |  | (13 | ) |  |  | 1 |
Total Core Earnings adjustments to GAAP |  |  | 7 |  |  |  | (3 | ) |  |  | 36 |  |  |  | (23 | )
Core Earnings net income |  | $ | 21 |  |  | $ | 33 |  |  | $ | 47 |  |  | $ | 86 |
(1) Derivative accounting: Core Earnings exclude periodic gains and losses that are caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP as well as the periodic mark-to-market gains and losses that are a result of ineffectiveness recognized related to effective hedges under GAAP. Under GAAP, for our derivatives that are held to maturity, the mark-to-market gain or loss over the life of the contract will equal $0. In our Core Earnings presentation, we recognize the economic effect of these hedges, which generally results in any net settlement cash paid or received being recognized ratably as an interest expense or revenue over the hedged item’s life. (2) Goodwill and acquired intangible assets: Our Core Earnings exclude goodwill and intangible asset impairment and amortization of acquired intangible assets. Net tax effect: Such tax effect is based upon our Core Earnings effective tax rate for the year.
Federal Education Loans [Member] |
Asset Information for Loans Segment | The following table includes asset information for our Federal Education Loans segment.
(Dollars in millions) |  | June 30, 2025 |  |  | December 31, 2024 |
FFELP Loans, net |  | $ | 29,618 |  |  | $ | 30,852 |
Cash and investments(1) |  |  | 938 |  |  |  | 955 |
Other |  |  | 1,832 |  |  |  | 1,818 |
Total assets |  | $ | 32,388 |  |  | $ | 33,625 |
(1) Includes restricted cash and investments.
Consumer Lending [Member] |
Asset Information for Loans Segment | The following table includes asset information for our Consumer Lending segment.
(Dollars in millions) |  | June 30, 2025 |  |  | December 31, 2024 |
Private Education Loans, net |  | $ | 15,530 |  |  | $ | 15,716 |
Cash and investments(1) |  |  | 532 |  |  |  | 524 |
Other |  |  | 540 |  |  |  | 569 |
Total assets |  | $ | 16,602 |  |  | $ | 16,809 |
(1) Includes restricted cash and investments.

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