Highlights

  • Third quarter net loss to common stock was USD 35.9 million, or USD 0.19 per diluted share.
  • 2026 guidance: EPS lowered to USD 1.95 to 2.05; net charge-offs raised to USD 400 million to 420 million.
  • SLM signed a three-year Sixth Street partnership, which committed to buy at least USD 1.5 billion of new loans annually.
  • Management said originations reached a record USD 3.4 billion; a restructuring cuts under 5% of the workforce.

SLM Corporation (NASDAQ: SLM) shares closed at USD 19.42 on October 23, 2026, down 10.78%. The student lender, known as Sallie Mae, signed a new strategic loan-sale partnership in September, began a restructuring in October and reported third quarter 2026 results on October 22 with lower full-year earnings guidance.

Based in Newark, Delaware, SLM is a Delaware corporation that refers to itself as Sallie Mae. It makes Private Education Loans, which are education loans not made, insured or guaranteed by any government, largely to bridge the gap between the cost of higher education and other funding. It funds growth through its bank, whole loan sales and strategic partnerships, says its primary focus is its core private student loan business, and is building new business lines. Its fiscal year ends December 31.

Third Quarter Loss as Provisions Rise and Loan Sale Gains Fall

SLM reported a net loss attributable to common stock of USD 35.9 million for the three months ended September 30, 2026, or USD 0.19 per diluted share, compared with net income of USD 131.9 million, or USD 0.63. Net interest income was USD 339 million against USD 373 million, and the provision for credit losses was USD 214 million against USD 179 million. Gains on loan sales were USD 4 million against USD 136 million a year earlier.

Non-interest expenses were USD 221 million, up from USD 180 million, and the efficiency ratio was 58.8% against 33.1%. The company recorded an income tax benefit of USD 27 million. Net charge-offs on Private Education Loans were USD 90.4 million, and ending net loans were USD 20.6 billion against USD 21.6 billion a year earlier.

For nine months, net income attributable to common stock was USD 323.4 million, or USD 1.68 per diluted share, against USD 499.7 million, or USD 2.35. SLM paid a USD 0.13 per share common dividend in September, unchanged from a year earlier.

Credit, Capital and Restructuring

Management said loans 30 or more days delinquent were 4.2% of loans in repayment, against 4.0% a year earlier, and the allowance rate was 5.89%. It said slower than expected take-up of its recovery strategies among borrowers working with third-party debt resolution providers led it to raise its estimate of their impact on 2026 net charge-offs from USD 25 million to USD 45 million.

Management said the common equity Tier 1 ratio was 11.2%, the total risk-based capital ratio 12.5% and liquidity 15% of total assets. SLM repurchased 5.1 million shares for USD 132 million at an average USD 25.06 in the quarter, and 18.1 million shares so far this year at an average USD 23.02, leaving USD 111 million of authorization.

In October, SLM started a restructuring that reduces its workforce by less than 5%. It estimates total expenses of USD 16 million to USD 18 million, mostly severance, with substantially all charges by the end of the second quarter of 2027.

Funding Partnership and a Cancelled Loan Sale

In September, SLM entered a strategic partnership with a global investment firm, which management named as Sixth Street, and sold an initial USD 143 million of loans, including USD 129 million of principal. Management said Sixth Street committed to buy at least USD 1.5 billion of newly originated loans a year for an initial three years, with a seed portfolio of USD 600 million. SLM keeps servicing and earns fees.

Management also said it will not carry out a planned October whole loan sale, because rising rates and volatile capital markets would have produced a premium below its minimum threshold. It said it would instead keep those loans on its balance sheet.

2026 Guidance

Management lowered full-year 2026 EPS guidance to USD 1.95 to USD 2.05 from USD 3.10 to USD 3.20, mainly because of the cancelled sale. It raised net charge-offs guidance to USD 400 million to USD 420 million from USD 345 million to USD 385 million, and reaffirmed non-interest expense and originations growth of 12% to 14%.

It said October disbursements to date were up 35% and that it still plans to use most of its repurchase authorization this year. It said meaningful loan sales remain part of its 2027 plan. These are company expectations.