Sallie Mae books $3.4 billion in student loan originations; cuts 2026 earnings outlook

Sallie Mae, a private student lender, reported the largest quarter for new loans in its history and a quarterly loss, and cut its 2026 earnings outlook, according to a results release dated October 22.

What happened

The company made $3.4 billion in Private Education Loan originations in the third quarter, up 15% from a year earlier, including 119% growth in graduate loan originations "during the first academic year following PLUS reform." Chief Executive Officer Jonathan Witter said the quarter was "the largest single quarter of originations in the Company's history" and that the company was "encouraged by the significant growth in graduate student lending following changes to federal student loan programs."

Net interest income was $339 million, down from $373 million a year earlier. Provisions for credit losses rose to $214 million from $179 million, and non-interest expenses rose 22% to $221 million, which the company attributed to peak-season costs to capture new volume. The result was a net loss of $32 million, or $0.19 per common share, compared with net income of $136 million, or $0.63, a year earlier.

Credit

Net charge-offs were $90 million, up from $78 million, which the company attributed "primarily" to "misaligned third-party debt resolution practices" affecting a small segment of borrowers with a high ability to pay. Delinquencies were 4.2% of loans in repayment at September 30, up from 4.0% a year earlier, and 2.3% of loans were in forbearance, against 2.0%. The average winning FICO score at approval was 757, and cosigners were on 92% of loans.

The outlook

Sallie Mae now expects 2026 earnings of $1.95 to $2.05 per diluted common share, down from $3.10 to $3.20. It kept its originations growth forecast at 12% to 14% and raised its net charge-off forecast to $400 million to $420 million from $365 million to $385 million. The company also repurchased 5.1 million shares for $132.2 million in the quarter.