# NAVIENT CORP (NAVI) Informational only - not investment advice. CIK: 0001593538 SIC: 6211 Security Brokers, Dealers & Flotation Companies SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Security And Commodity Brokers, Dealers, Exchanges, And Services](/major-group/62/) > [SIC 6211 Security Brokers, Dealers & Flotation Companies](/industry/6211/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1593538 Filing source: https://www.sec.gov/Archives/edgar/data/1593538/000119312526076753/navi-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 3108000000 | USD | 2025 | 2026-02-26 | | Net income | -80000000 | USD | 2025 | 2026-02-26 | | Assets | 48681000000 | USD | 2025 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001593538.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | 4,908,000,000 | 4,673,000,000 | 3,298,000,000 | 2,648,000,000 | 3,223,000,000 | 4,419,000,000 | 3,809,000,000 | 3,108,000,000 | | Net income | 681,000,000 | 292,000,000 | 395,000,000 | 597,000,000 | 412,000,000 | 717,000,000 | 645,000,000 | 228,000,000 | 131,000,000 | -80,000,000 | | Diluted EPS | 2.12 | 1.04 | 1.49 | 2.56 | 2.12 | 4.18 | 4.49 | 1.85 | 1.18 | -0.81 | | Assets | 121,136,000,000 | 114,991,000,000 | 104,176,000,000 | 94,903,000,000 | 87,412,000,000 | 80,605,000,000 | 70,795,000,000 | 61,375,000,000 | 51,789,000,000 | 48,681,000,000 | | Liabilities | 117,413,000,000 | 111,506,000,000 | 100,629,000,000 | 91,554,000,000 | 84,965,000,000 | 77,997,000,000 | 67,818,000,000 | 58,615,000,000 | 49,148,000,000 | 46,282,000,000 | | Stockholders' equity | 3,699,000,000 | 3,454,000,000 | 3,519,000,000 | 3,336,000,000 | 2,433,000,000 | 2,597,000,000 | 2,977,000,000 | 2,760,000,000 | 2,641,000,000 | 2,399,000,000 | | Cash and cash equivalents | 1,253,000,000 | 1,518,000,000 | 1,286,000,000 | 1,233,000,000 | 1,183,000,000 | 905,000,000 | 1,535,000,000 | 839,000,000 | 722,000,000 | 637,000,000 | | Net margin | | | 8.05% | 12.78% | 12.49% | 27.08% | 20.01% | 5.16% | 3.44% | -2.57% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001593538.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 1.22 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.75 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.86 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 1,097,000,000 | 66,000,000 | 0.52 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 1,170,000,000 | 79,000,000 | 0.65 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 1,081,000,000 | -28,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 1,027,000,000 | 73,000,000 | 0.64 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 973,000,000 | 36,000,000 | 0.32 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 948,000,000 | -2,000,000 | -0.02 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 861,000,000 | 24,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 802,000,000 | -2,000,000 | -0.02 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 778,000,000 | 14,000,000 | 0.13 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 781,000,000 | -86,000,000 | -0.87 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 747,000,000 | -5,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 695,000,000 | 17,000,000 | 0.17 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1593538/000119312526191605/navi-20260331.htm Extracted from a later financial-section MD&A body after Item 2 boundaries were low-confidence. Confidence: high Filing date: 2026-04-29 Report date: 2026-03-31 Management’s Discussion and Analysis of Financial Condition and Results of Operations Selected Historical Financial Information and Ratios Three Months Ended March 31, (In millions, except per share data) 2026 2025 GAAP Basis Net income (loss) $ 17 $ (2 ) Diluted earnings (loss) per common share $ .17 $ (.02 ) Weighted average shares used to compute diluted earnings per share 96 102 Return on assets .15 % (.02 )% Core Earnings Basis(1) Net income(1) $ 19 $ 26 Diluted earnings per common share(1) $ .20 $ .25 Weighted average shares used to compute diluted earnings per share 96 103 Net interest margin, Consumer Lending segment 2.48 % 2.76 % Net interest margin, Federal Education Loans segment .65 % .61 % Return on assets .17 % .22 % Education Loan Portfolios Ending Private Education Loans, net $ 15,649 $ 15,690 Ending FFELP Loans, net 27,237 $ 30,244 Ending total education loans, net $ 42,886 $ 45,934 Average Private Education Loans $ 15,958 $ 16,159 Average FFELP Loans 27,898 $ 30,914 Average total education loans $ 43,856 $ 47,073 (1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures – Core Earnings” 7 The Quarter in Review We prepare financial statements and present financial results in accordance with GAAP. However, we also evaluate our business segments and present financial results on a basis that differs from GAAP. We refer to this different basis of presentation as Core Earnings. We provide this Core Earnings basis of presentation on a consolidated basis and for each business segment because this is what we review internally when making management decisions regarding our performance and how we allocate resources. We also include this information in our presentations with credit rating agencies, lenders and investors. Because our Core Earnings basis of presentation corresponds to our segment financial presentations, we are required by GAAP to provide certain Core Earnings disclosures in the notes to our consolidated financial statements for our business segments. See “Non-GAAP Financial Measures — Core Earnings” for a further discussion and a complete reconciliation between GAAP net income and Core Earnings. First-quarter 2026 net income was $17 million ($0.17 diluted earnings per share), compared with net loss of $2 million ($0.02 diluted loss per share) for the year-ago quarter. See “Results of Operations — GAAP Comparison of First-Quarter 2026 Results with First-Quarter 2025” for a discussion of the primary contributors to the change in GAAP earnings between periods. First-quarter 2026 Core Earnings net income was $19 million ($0.20 diluted Core Earnings per share), compared with $26 million ($0.25 diluted Core Earnings per share) for the year-ago quarter. See “Segment Results” for a discussion of the primary contributors to the change in Core Earnings between periods. Financial highlights of first-quarter 2026 include: Consumer Lending segment: • Net income of $35 million. • Net interest margin of 2.48%. • Originated $818 million of Private Education Loans, a 61% increase from a year ago. Federal Education Loans segment: • Net income of $22 million. • Net interest margin of 0.65%. • FFELP Loan prepayments of $208 million compared to $256 million in first-quarter 2025. Capital, funding and liquidity: • GAAP equity-to-asset ratio of 4.9% and adjusted tangible equity ratio(1) of 8.9%. • Repurchased $23 million of common shares. • Paid $15 million in common stock dividends. • Issued $683 million of asset-backed securities. Operating Expenses: • Incurred operating expenses of $89 million. (1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.” 8 Results of Operations GAAP Income Statements (Unaudited) Three Months Ended March 31, Increase (Decrease) (In millions, except per share data) 2026 2025 $ % Interest income Private Education Loans $ 277 $ 289 $ (12 ) (4 )% FFELP Loans 401 493 (92 ) (19 ) Cash and investments 17 20 (3 ) (15 ) Total interest income 695 802 (107 ) (13 ) Total interest expense 564 672 (108 ) (16 ) Net interest income 131 130 1 1 Less: provisions for loan losses 27 30 (3 ) (10 ) Net interest income after provisions for loan losses 104 100 4 4 Other income (loss): Servicing revenue 11 13 (2 ) (15 ) Asset recovery and business processing revenue — 23 (23 ) (100 ) Other income 5 15 (10 ) (67 ) Gains (losses) on derivative and hedging activities, net 5 (25 ) 30 120 Total other income 21 26 (5 ) (19 ) Expenses:    Operating expenses 89 127 (38 ) (30 )    Goodwill and acquired intangible assets       impairment and amortization expense 4 1 3 300    Restructuring/other reorganization expenses — 3 (3 ) (100 ) Total expenses 93 131 (38 ) (29 ) Income (loss) before income tax expense (benefit) 32 (5 ) 37 740 Income tax expense (benefit) 15 (3 ) 18 600 Net income (loss) $ 17 $ (2 ) $ 19 950 % Basic earnings (loss) per    common share $ .18 $ (.02 ) $ .20 1000 % Diluted earnings (loss) per    common share $ .17 $ (.02 ) $ .19 950 % Dividends per common share $ .16 $ .16 $ — — 9 GAAP Comparison of First-Quarter 2026 Results with First-Quarter 2025 For the three months ended March 31, 2026, net income was $17 million, or $0.17 diluted earnings per common share, compared with net loss of $2 million, or $0.02 diluted loss per common share, for the year-ago period. The primary contributors to the change in net income are as follows: • Net interest income increased by $1 million primarily due to an increase in mark-to-market gains on fair value hedges recorded in interest expense. This was partially offset by the paydown of the FFELP portfolio, the Private Education Loan portfolio's changing product mix with Refinance Loans increasing as a percentage of the portfolio, and the impact of decreasing interest rates on the different index resets for the Private Education Loans and related funding. • Provisions for loan losses decreased $3 million from $30 million to $27 million. ○ The provision for Private Education Loan losses decreased $4 million from $22 million to $18 million. ○ The provision for FFELP Loan losses increased $1 million from $8 million to $9 million. The provision for Private Education Loan losses of $18 million in the current period included $11 million associated with loan originations. The provision of $22 million in the year-ago quarter included $7 million associated with loan originations and $15 million related to a general reserve build (primarily as a result of an increase in delinquency balances). The provision for FFELP Loan losses of $9 million in the current period was primarily the result of increased charge-offs due to prior disaster forbearance volume, as well as the continued extension of the portfolio. The provision of $8 million in the year-ago quarter was primarily the result of an increase in delinquency balances. • Asset recovery and business processing revenue decreased $23 million as a result of the sale of our government services business in February 2025. With the sale of our government services business, Navient no longer provides business processing segment services. • Other income decreased $10 million primarily related to the transition services we had provided related to our various strategic initiatives. The transition services related to the outsourcing of loan servicing and the sale of our healthcare services business ended in May 2025. The transition services related to the sale of our government services business ended in October 2025. • Net gains on derivative and hedging activities increased $30 million due primarily to interest rate fluctuations. Valuations of derivative instruments fluctuate based upon many factors including changes in interest rates and other market factors. As a result, net gains and losses on derivative and hedging activities may vary significantly in future periods. • Operating expenses decreased $38 million, $23 million of which was due to a decline in business processing expenses as a result of the sale of our government services business in February 2025 ($20 million of the reduction is in the Business Processing segment and $3 million of the reduction is in the Other segment). In addition, there was an $11 million decline in expenses in connection with providing transition services related to our various strategic initiatives. As of October 2025 we had no further obligations to provide these transition services. There was a $7 million increase in marketing and other expenses associated with the growth of our consumer lending businesses. The remaining $11 million decrease primarily relates to cost saving initiatives implemented, which have reduced our operating costs mostly in connection with our shared service functions and corporate footprint. • Restructuring and other reorganization expenses decreased $3 million primarily due to a decrease in severance-related costs incurred in connection with the various strategic initiatives that have been and continue to be implemented to simplify the company, continue to reduce our expense base and enhance our flexibility. • The effective income tax rates for the current and year-ago periods were 48% and 54%, respectively. The effective income tax rates were elevated in both periods primarily due to changes in the valuation allowances attributed to disallowed interest expense and operating loss carryovers. We repurchased 2.3 million and 2.6 million shares of our common stock during the first quarters of 2026 and 2025, respectively. As a result of repurchases, our average outstanding diluted shares decreased by 6 million common shares (or 6%) from the year-ago period. 10 Segment Results Consumer Lending Segment The following table presents Core Earnings results for our Consumer Lending segment. Three Months Ended March 31, % Increase (Decrease) (Dollars in millions) 2026 2025 2026 vs. 2025 Interest income: Private Education Loans $ 277 $ 289 (4 )% Cash and investments 4 5 (20 ) Interest income 281 294 (4 ) Interest expense 181 181 — Net interest income 100 113 (12 ) Less: provision for loan losses 18 22 (18 ) Net interest income after provision for loan losses 82 91 (10 ) Total other income 3 3 — Direct operating expenses 39 35 11 Income before income tax expense 46 59 (22 ) Income tax expense 11 13 (15 ) Net income $ 35 $ 46 (24 )% Comparison of First-Quarter 2026 Results with First-Quarter 2025 • Originated $818 million of Private Education Loans, a 61% increase compared to $508 million. o Refinance Loan originations were $778 million compared to $470 million. o In-school loan originations were $40 million compared to $38 million. • Net income was $35 million compared to $46 million. • Net interest income decreased $13 million, primarily due to the changing product mix of the loan portfolio (Refinance Loans increased as a percentage of the portfolio), as well as the impact of decreasing interest rates on the different index resets for the segment assets and debt. • Provision for loan losses decreased $4 million. The provision of $18 million in the current quarter included $11 million associated with loan originations. The provision for loan losses of $22 million in the year-ago quarter included $7 million associated with loan originations and $15 million related a general reserve build (primarily as a result of an increase in delinquency balances). o Net charge-offs remained unchanged at $72 million. o Private Education Loan delinquencies greater than 90 days: $386 million, down $9 million from $395 million. o Private Education Loan forbearances: $2 [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10-K. This discussion and analysis also contains forward-looking statements and should be read in conjunction with the disclosures and information contained in “Forward-Looking and Cautionary Statements” and “Risk Factors” in this Form 10-K. The objective of this discussion and analysis is to allow investors to view the Company from management’s perspective. Accordingly, we provide the reader with narrative context for how our management views our consolidated financial statements, additional context within which to assess our operating results, and information on the quality and variability of our earnings, liquidity and cash flows. The discussion that follows is primarily focused on 2025 versus 2024 results. Discussion and analysis of 2024 results compared to 2023 is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 27, 2025, which is incorporated herein by reference. Selected Historical Financial Information and Ratios Years Ended December 31, (In millions, except per share data) 2025 2024 2023 GAAP Basis Net income (loss) $ (80 ) $ 131 $ 228 Diluted earnings (loss) per common share $ (.81 ) $ 1.18 $ 1.85 Weighted average shares used to compute diluted    earnings per share 99 111 123 Return on assets (.17 )% .24 % .36 % Dividends per common share $ .64 $ .64 $ .64 Return on common stockholders' equity (3 )% 5 % 8 % Dividend payout ratio (80 )% 54 % 35 % Average equity/average assets 5.05 % 4.82 % 4.43 % Total assets $ 48,681 $ 51,789 $ 61,375 Total borrowings $ 45,706 $ 48,318 $ 57,628 Total Navient Corporation stockholders' equity $ 2,399 $ 2,641 $ 2,760 Book value per common share $ 25.12 $ 25.63 $ 24.32 Core Earnings Basis(1) Net income (loss) (1) $ (35 ) $ 221 $ 303 Diluted earnings (loss) per common share(1) $ (.35 ) $ 2.00 $ 2.45 Weighted average shares used to compute diluted    earnings per share 99 111 123 Net interest margin, Consumer Lending segment 2.49 % 2.87 % 3.04 % Net interest margin, Federal Education Loans segment .69 % .45 % 1.12 % Return on assets (.07 )% .41 % .48 % Education Loan Portfolios Ending Private Education Loans, net $ 15,451 $ 15,716 $ 16,902 Ending FFELP Loans, net 28,141 30,852 37,925 Ending total education loans, net $ 43,592 $ 46,568 $ 54,827 Average Private Education Loans $ 15,987 $ 16,809 $ 18,463 Average FFELP Loans 29,945 33,946 41,191 Average total education loans $ 45,932 $ 50,755 $ 59,654 (1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures – Core Earnings.” 11 The Year in Review We prepare financial statements and present financial results in accordance with GAAP. However, we also evaluate our business segments and present financial results on a basis that differs from GAAP. We refer to this different basis of presentation as Core Earnings. We provide this Core Earnings basis of presentation on a consolidated basis and for each business segment because this is what we review internally when making management decisions regarding our performance and how we allocate resources. We also include this information in our presentations with credit rating agencies, lenders and investors. Because our Core Earnings basis of presentation corresponds to our segment financial presentations, we are required by GAAP to provide certain Core Earnings disclosures in the notes to our consolidated financial statements for our business segments. See “Non-GAAP Financial Measures — Core Earnings” for a further discussion and a complete reconciliation between GAAP net income and Core Earnings. 2025 GAAP net loss was $80 million ($0.81 diluted loss per share), compared with net income of $131 million ($1.18 diluted earnings per share) in 2024. See “Results of Operations — GAAP Comparison of 2025 Results with 2024” for a discussion of the primary contributors to the change in GAAP earnings between periods. 2025 Core Earnings net loss was $35 million ($0.35 diluted Core Earnings loss per share), compared with Core Earnings net income of $221 million ($2.00 diluted Core Earnings per share) in 2024. See “Segment Results” for a discussion of the primary contributors to the change in Core Earnings between periods. 2025 GAAP and Core Earnings results included the following significant items: • $280 million provision for loan losses ($249 million for Consumer Lending and $31 million for FFELP). Of the $280 million, $41 million relates to originations with the remaining $239 million primarily associated with elevated delinquency balances, our forecasted macroeconomic outlook as well as the extension of the FFELP portfolio. • $11 million net benefit to net interest income from a decrease in prepayment rate assumptions ($18 million of additional net interest income from the FFELP Loan portfolio partially offset by a $7 million reduction in the Private Education Loan portfolio). • $25 million of regulatory and restructuring expenses. Financial highlights of 2025 include: Consumer Lending segment: • Net income of $20 million. • Net interest margin of 2.49%. • Originated $2.5 billion of Private Education Loans, a 77% increase compared to 2024. Federal Education Loans segment: • Net income of $115 million. • Net interest margin of 0.69%. • FFELP Loan prepayments of $977 million compared to $5.4 billion in 2024. Business Processing segment: • Navient ceased providing Business Processing segment services after the sale in February 2025 of its government services business. Capital, funding and liquidity: • GAAP equity-to-asset ratio of 4.9% and adjusted tangible equity ratio(1) of 9.1%. • Repurchased $111 million of common shares. • Paid $63 million in common stock dividends. • Issued $2.2 billion of asset-backed securities. (1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.” 12 Operating Expenses: • Incurred operating expenses of $421 million, of which $30 million was in connection with transition services we provided related to our various strategic initiatives. There was $33 million of revenue recognized in Other revenue related to these services. The transition services related to the outsourcing of loan servicing and the sale of our healthcare services business ended in May 2025 and as of October 2025 we had no further obligations to provide transition services for our government services business. Results of Operations GAAP Income Statements Increase (Decrease) Years Ended December 31, 2025 vs. 2024 2024 vs. 2023 (Dollars in millions, except per share amounts) 2025 2024 2023 $ % $ % Interest income Private Education Loans $ 1,122 $ 1,259 $ 1,369 $ (137 ) (11 )% $ (110 ) (8 )% FFELP Loans 1,903 2,396 2,897 (493 ) (21 ) (501 ) (17 ) Cash and investments 83 154 153 (71 ) (46 ) 1 1 Total interest income 3,108 3,809 4,419 (701 ) (18 ) (610 ) (14 ) Total interest expense 2,589 3,273 3,557 (684 ) (21 ) (284 ) (8 ) Net interest income 519 536 862 (17 ) (3 ) (326 ) (38 ) Less: provisions for loan losses 280 113 123 167 148 (10 ) (8 ) Net interest income after provisions for    loan losses 239 423 739 (184 ) (43 ) (316 ) (43 ) Other income (loss): Servicing revenue 51 54 64 (3 ) (6 ) (10 ) (16 ) Asset recovery and business processing    revenue 23 271 321 (248 ) (92 ) (50 ) (16 ) Other income 47 30 21 17 57 9 43 Gain on sale of subsidiaries, net — 191 — (191 ) (100 ) 191 100 Losses on debt repurchases — — (8 ) — — 8 (100 ) Gains (losses) on derivative and hedging    activities, net (30 ) 70 11 (100 ) (143 ) 59 536 Total other income 91 616 409 (525 ) (85 ) 207 51 Expenses: Operating expenses 421 680 800 (259 ) (38 ) (120 ) (15 ) Goodwill and acquired intangible assets    impairment and amortization expense 3 146 10 (143 ) (98 ) 136 1,360 Restructuring/other reorganization expenses 17 39 25 (22 ) (56 ) 14 56 Total expenses 441 865 835 (424 ) (49 ) 30 4 Income (loss) before income tax expense (111 ) 174 313 (285 ) (164 ) (139 ) (44 ) Income tax expense (benefit) (31 ) 43 85 (74 ) (172 ) (42 ) (49 ) Net income (loss) $ (80 ) $ 131 $ 228 $ (211 ) (161 )% $ (97 ) (43 )% Basic earnings (loss) per common share $ (.81 ) $ 1.20 $ 1.87 $ (2.01 ) (168 )% $ (.67 ) (36 )% Diluted earnings (loss) per common share $ (.81 ) $ 1.18 $ 1.85 $ (1.99 ) (169 )% $ (.67 ) (36 )% Dividends per common share $ .64 $ .64 $ .64 $ — — % $ — — % 13 GAAP Comparison of 2025 Results with 2024 For the year ended December 31, 2025, net loss was $80 million, or $0.81 diluted loss per common share, compared with net income of $131 million, or $1.18 diluted earnings per common share, for the year-ago period. The primary contributors to the change in net income (loss) are as follows: • Net interest income decreased by $17 million primarily as a result of the paydown of the Private Education Loan and FFELP Loan portfolios, the changing product mix of the Private Education Loan portfolio (Refinance Loans increased as a percentage of the portfolio) and the net impact of decreasing interest rates on the different index resets for the Private Education Loan and FFELP Loan assets and debt. Additionally, there was a $12 million decrease in mark-to-market gains on fair value hedges recorded in interest expense. These decreases were partially offset by a $55 million decline in premium amortization on the FFELP Loan portfolio due to both a decrease in prepayment rate assumptions, mostly in response to the significant decline in actual FFELP Loan prepayments since the beginning of 2025, as well as the significant decline in actual FFELP Loan prepayments from $5.4 billion in the year-ago period to $977 million in the current period. • Provisions for loan losses increased $167 million, from $113 million to $280 million: o The provision for Private Education Loan losses increased $137 million from $112 million to $249 million. o The provision for FFELP Loan losses increased $30 million from $1 million to $31 million. The provision for Private Education Loan losses of $249 million in the current period included $41 million associated with loan originations and $208 million primarily associated with elevated delinquency balances as well as our forecasted macroeconomic outlook. The provision of $112 million in the year-ago period included $39 million related to lowering the expected recovery rate on defaulted loans, $32 million associated with loan originations and $41 million related to a general reserve build. The provision for FFELP Loan losses of $31 million in the current period was primarily the result of elevated delinquency balances, our forecasted macroeconomic outlook, as well as the continued extension of the portfolio. The provision of $1 million in the year-ago period was primarily the result of relatively stable credit trends. • Asset recovery and business processing revenue decreased $248 million as a result of the sale of our healthcare services business in the third quarter of 2024 ($88 million of the decrease), and our government services business in February 2025 ($160 million of the decrease). With the sale of our government services business, Navient no longer provides business processing segment services. • Other income increased $17 million primarily related to the transition services we provided related to our various strategic initiatives. The transition services related to the outsourcing of loan servicing and the sale of our healthcare services business ended in May 2025. The transition services related to the sale of our government services business ended in October 2025. • Gain (loss) on sale of subsidiaries was a $191 million net gain in the year-ago period which included a $219 million gain on sale of our healthcare services business in third-quarter 2024 and a $28 million loss in fourth-quarter 2024 resulting from reclassification of our government services businesses to held for sale commensurate with our entering into an agreement on December 19, 2024 to sell these businesses, resulting in adjustment of the basis of these businesses to the expected sales price. • Net gains on derivative and hedging activities decreased $100 million. The primary factor affecting the change was interest rate fluctuations. Valuations of derivative instruments fluctuate based upon many factors including changes in interest rates and other market factors. As a result, net gains and losses on derivative and hedging activities may vary significantly in future periods. • Operating expenses decreased $259 million, $240 million of which was due to a decline in business processing expenses as a result of the sale of our government services business in February 2025 and our healthcare services business in the third quarter of 2024 ($208 million of the reduction is in the Business Processing segment and $32 million of the reduction is in the Other segment). In addition, regulatory-related expenses decreased $35 million primarily due to $43 million of regulatory-related expenses recorded in the year-ago period in connection with the September 2024 Consumer Financial Protection Bureau (the CFPB) settlement agreement. Current period expense includes $30 million, an $18 million increase from the prior year, of expense in connection with providing transition services related to our various strategic initiatives. There is $33 million of revenue recognized in the Other segment related to these services. • Goodwill and acquired intangible asset impairment and amortization expense decreased by $143 million primarily due to a $138 million impairment recognized in the year-ago period related to our government services business which was sold in February 2025. 14 • Restructuring and other reorganization expenses decreased $22 million primarily due to a decrease in severance-related costs incurred in connection with the various strategic initiatives that have been and continue to be implemented to simplify the company, reduce our expense base and enhance our flexibility. We repurchased 8.5 million and 11.5 million shares of our common stock during 2025 and 2024, respectively. As a result of repurchases, our average outstanding diluted shares decreased by 12 million common shares (or 11%) from the year-ago period. Segment Results Consumer Lending Segment The following table presents Core Earnings results for our Consumer Lending segment. Years Ended December 31, % Increase (Decrease) (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Interest income: Private Education Loans $ 1,122 $ 1,259 $ 1,369 (11 )% (8 )% Cash and investments 20 25 27 (20 ) (7 ) Interest income 1,142 1,284 1,396 (11 ) (8 ) Interest expense 731 786 816 (7 ) (4 ) Net interest income 411 498 580 (17 ) (14 ) Less: provision for loan losses 249 112 67 122 67 Net interest income after provision for    loan losses 162 386 513 (58 ) (25 ) Other income (loss):    Servicing revenue 11 10 12 10 (17 )    Other revenue 1 1 2 — (50 ) Total other income 12 11 14 9 (21 ) Direct operating expenses 147 143 151 3 (5 ) Income before income tax expense 27 254 376 (89 ) (32 ) Income tax expense 7 58 89 (88 ) (35 ) Net income $ 20 $ 196 $ 287 (90 )% (32 )% Highlights of 2025 vs. 2024 • Originated $2.5 billion of Private Education Loans compared to $1.4 billion, an increase of 77%. o Refinance Loan originations were $2.1 billion compared to $1.0 billion. o In-school loan originations were $401 million compared to $366 million. • Net income was $20 million compared to $196 million. • Net interest income decreased $87 million primarily due to the paydown and changing product mix of the loan portfolio (Refinance Loans increased as a percentage of the loan portfolio). • Provision for loan losses increased $137 million. The provision for loan losses of $249 million in the current period included $41 million associated with loan originations and $208 million primarily associated with elevated delinquency balances as well as our forecasted macroeconomic outlook. The provision for loan losses of $112 million in 2024 included $39 million related to lowering the expected recovery rate on defaulted loans, $32 million in connection with loan originations and $41 million related to a general reserve build (primarily as a result of an increase in delinquency balances). o Net charge-offs were unchanged at $335 million. o Private Education Loan delinquencies greater than 90 days: $434 million, up $15 million from $419 million. o Private Education Loan forbearances: $236 million, down $186 million from $422 million. • Expenses increased $4 million, or 3%, primarily as a result of higher marketing spend associated with 77% higher loan origination volume. 15 Key performance metrics are as follows: Years Ended December 31, (Dollars in millions) 2025 2024 2023 Segment net interest margin 2.49 % 2.87 % 3.04 % Private Education Loans (including Refinance Loans):    Private Education Loan spread 2.59 % 2.99 % 3.18 %    Provision for loan losses $ 249 $ 112 $ 67    Net charge-offs $ 335 $ 335 $ 298    Net charge-off rate 2.18 % 2.08 % 1.68 %    Greater than 30-days delinquency rate 6.3 % 6.1 % 5.1 %    Greater than 90-days delinquency rate 2.9 % 2.7 % 2.3 %    Forbearance rate 1.5 % 2.7 % 2.1 %    Average Private Education Loans $ 15,987 $ 16,809 $ 18,463    Ending Private Education Loans, net $ 15,451 $ 15,716 $ 16,902 Private Education Refinance Loans:    Net charge-offs $ 72 $ 49 $ 32    Greater than 90-day delinquency rate .9 % .7 % .4 %    Average balance of Private Education Refinance Loans $ 8,622 $ 8,623 $ 9,206    Ending balance of Private Education Refinance Loans $ 8,755 $ 8,341 $ 8,752    Private Education Refinance Loan originations $ 2,076 $ 1,034 $ 647 Net Interest Margin The following table details the net interest margin. Years Ended December 31, 2025 2024 2023 Private Education Loan yield 7.02 % 7.49 % 7.42 % Private Education Loan cost of funds (4.43 ) (4.50 ) (4.24 ) Private Education Loan spread 2.59 2.99 3.18 Other interest-earning asset spread impact (.10 ) (.12 ) (.14 ) Net interest margin(1) 2.49 % 2.87 % 3.04 % (1) The average balances of the interest-earning assets for the respective periods are: Years Ended December 31, (Dollars in millions) 2025 2024 2023 Private Education Loans $ 15,987 $ 16,809 $ 18,463 Other interest-earning assets 488 519 593 Total Private Education Loan interest-earning assets $ 16,475 $ 17,328 $ 19,056 The 38 basis point decrease in the net interest margin in 2025 is primarily the result of a $19 million decrease (12 basis points) in loan discount amortization mostly related to a decrease in prepayment rate assumptions used to amortize loan discount. In addition, the continued shift of the Refinance Loan portfolio becoming a higher percentage of the overall Private Education Loan portfolio and the Refinance Loan portfolio earning a lower net interest margin compared to the legacy portfolio reduces the overall net interest margin. As of December 31, 2025, our Private Education Loan portfolio totaled $15.5 billion, comprised of $8.8 billion of refinance loans and $6.7 billion of non-refinance loans. The weighted-average life of these portfolios as of December 31, 2025 was 5 years and 4 years, respectively, assuming a Constant Prepayment Rate (CPR) of 10% and 8%, respectively. As of December 31, 2024, the CPR assumption was 10% for both refinance and non-refinance loans. Provision for Loan Losses The provision for Private Education Loan losses increased $137 million. The provision for loan losses of $249 million in 2025 included $41 million associated with loan originations and $208 million primarily associated with elevated delinquency balances as well as our forecasted macroeconomic outlook. The provision for loan losses of $112 million in 2024 included $39 million related to lowering the expected recovery rate on defaulted loans, $32 million in connection with loan originations and $41 million related to a general reserve build (primarily as a result of an increase in delinquency balances). 16 Operating Expenses Operating expenses for our consumer lending segment include costs to originate, acquire, service and collect on our consumer loan portfolio. Operating expenses increased $4 million primarily as a result of higher marketing spend associated with higher loan origination volume. Federal Education Loans Segment The following table presents Core Earnings results for our Federal Education Loans segment. Years Ended December 31, % Increase (Decrease) (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Interest income: FFELP Loans $ 1,903 $ 2,397 $ 2,901 (21 )% (17 )% Cash and investments 39 88 76 (56 ) 16 Total interest income 1,942 2,485 2,977 (22 ) (17 ) Total interest expense 1,730 2,323 2,497 (26 ) (7 ) Net interest income 212 162 480 31 (66 ) Less: provision for loan losses 31 1 56 3,000 (98 ) Net interest income after provision for loan    losses 181 161 424 12 (62 ) Other income (loss):    Servicing revenue 40 44 52 (9 ) (15 )    Other revenue (loss) (1 ) 5 14 (120 ) (64 ) Total other income 39 49 66 (20 ) (26 ) Direct operating expenses 70 74 72 (5 ) 3 Income before income tax expense 150 136 418 10 (67 ) Income tax expense 35 31 99 13 (69 ) Net income $ 115 $ 105 $ 319 10 % (67 )% Highlights of 2025 vs. 2024 • Net income was $115 million compared to $105 million. • Net interest income increased $50 million primarily due to a $55 million decrease in premium amortization as a result of both a decrease in prepayment rate assumptions ($18 million benefit in 2025), in response to the significant decline in actual prepayments since the beginning of 2025, as well as the significant decline in actual prepayments from $5.4 billion in 2024 to $977 million in 2025. This was partially offset by the paydown of the loan portfolio. • Provision for loan losses increased $30 million. The $31 million of provision for loan losses in 2025 was primarily the result of elevated delinquency balances, our forecasted macroeconomic outlook as well as the continued extension of the portfolio. The $1 million of provision for loan losses in 2024 was primarily the result of an increase in delinquency balances partially offset by elevated prepayment activity over the prior year. o Net charge-offs were $38 million compared to $36 million. o Delinquencies greater than 90 days were $2.4 billion compared to $2.2 billion. o Forbearances were $3.5 billion compared to $4.4 billion. • Expenses were $4 million lower primarily as a result of the outsourcing of the loan servicing of our portfolio to a third party on July 1, 2024. This created a variable cost structure resulting in a reduction in expenses as the portfolio paid down. 17 Key performance metrics are as follows: Years Ended December 31, (Dollars in millions) 2025 2024 2023 Segment net interest margin .69 % .45 % 1.12 % FFELP Loans:       FFELP Loan spread .73 % .56 % 1.23 %       Provision for loan losses $ 31 $ 1 $ 56       Net charge-offs $ 38 $ 36 $ 63       Net charge-off rate .15 % .13 % .19 %       Greater than 30-days delinquency rate 17.5 % 18.6 % 13.9 %       Greater than 90-days delinquency rate 10.0 % 8.7 % 7.5 %       Forbearance rate 13.0 % 14.7 % 16.8 %       Average FFELP Loans $ 29,945 $ 33,946 $ 41,191       Ending FFELP Loans, net $ 28,141 $ 30,852 $ 37,925 Net Interest Margin The following table details the net interest margin. Years Ended December 31, 2025 2024 2023 FFELP Loan yield 6.13 % 6.83 % 6.59 % Floor Income .22 .23 .45 FFELP Loan net yield 6.35 7.06 7.04 FFELP Loan cost of funds (5.62 ) (6.50 ) (5.81 ) FFELP Loan spread .73 .56 1.23 Other interest-earning asset spread impact (.04 ) (.11 ) (.11 ) Net interest margin(1) .69 % .45 % 1.12 % (1) The average balances of the interest-earning assets for the respective periods are: Years Ended December 31, (Dollars in millions) 2025 2024 2023 FFELP Loans $ 29,945 $ 33,946 $ 41,191 Other interest-earning assets 870 1,742 1,673 Total FFELP Loan interest-earning assets $ 30,815 $ 35,688 $ 42,864 The 24 basis point increase in the net interest margin is primarily the result of loan premium amortization being $55 million lower in the current period (18 basis points) due to both a decrease in prepayment rate assumptions used to amortize loan premium, in response to the significant decline in actual prepayments since the beginning of 2025, as well as the significant decline in actual prepayments from $5.4 billion in 2024 to $977 million in 2025. The significant decline in actual prepayments in 2025 is primarily the result of changes in public policy under the current Administration. As of December 31, 2025, our FFELP Loan portfolio totaled $28.1 billion. The weighted-average life of this portfolio as of December 31, 2025 was 8 years assuming a CPR of 3% through 2028 and 5% thereafter. As of December 31, 2024, the CPR assumption was 5%. Floor Income The following table analyzes, on a Core Earnings basis, the ability of the FFELP Loans in our portfolio to earn Floor Income after December 31, 2025 and 2024, based on interest rates as of those dates. (Dollars in billions) December 31, 2025 December 31, 2024 Education loans eligible to earn Floor Income $ 28.0 $ 30.7 Less: post-March 31, 2006 disbursed loans required    to rebate Floor Income (13.6 ) (14.7 ) Less: economically hedged Floor Income (.6 ) (.8 ) Education loans eligible to earn Floor Income after    rebates and economically hedged $ 13.8 $ 15.2 Education loans earning Floor Income $ 5.3 $ 5.0 18 The following table presents a projection of the average balance of FFELP Consolidation Loans for which Fixed Rate Floor Income has been economically hedged with derivatives for the period from January 1, 2026 to December 31, 2028. (Dollars in billions) 2026 2027 2028 Average balance of FFELP Consolidation Loans    whose Floor Income is economically hedged $ .6 $ .3 $ .2 Provision for Loan Losses Provision for loan losses increased $30 million. The $31 million of provision for loan losses in 2025 was primarily the result of elevated delinquency balances, our forecasted macroeconomic outlook as well as the continued extension of the portfolio. The $1 million of provision for loan losses in 2024 was primarily the result of an increase in delinquency balances partially offset by elevated prepayment activity over the prior year. Operating Expenses Operating expenses for the Federal Education Loans segment primarily include costs incurred to perform servicing on our FFELP Loan portfolio and federal education loans held by other institutions. Expenses were $4 million lower primarily as a result of the outsourcing of the loan servicing of our portfolio to a third party on July 1, 2024. This created a variable cost structure resulting in a reduction in expenses as the portfolio paid down. Business Processing Segment The following table presents Core Earnings results for our Business Processing segment. Years Ended December 31, % Increase (Decrease) (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Other income (loss):    Business processing revenue $ 23 $ 271 $ 321 (92 )% (16 )%    Gain on sale of subsidiaries, net — 191 — (100 ) 100 Total other income 23 462 321 (95 ) 44 Direct operating expenses 20 228 285 (91 ) (20 ) Income before income tax expense 3 234 36 (99 ) 550 Income tax expense 1 54 8 (98 ) 575 Net income $ 2 $ 180 $ 28 (99 )% 543 % Highlights of 2025 vs. 2024 • With the sale of our government services business in February 2025, Navient no longer provides business processing segment services. Navient provided certain transition services ($33 million of revenue and $30 million of expense in 2025, reflected in the Other segment) in connection with the sale of our business processing businesses. As of October 2025, we had no further obligations to provide these transition services. Key performance metrics are as follows: As of December 31, (Dollars in millions) 2025 2024 2023 Revenue from government services $ 23 $ 183 $ 200 Revenue from healthcare services — 88 121 Total fee revenue 23 271 321 Gain on sale of subsidiaries, net — 191 — Total revenue $ 23 $ 462 $ 321 19 Other Segment The following table presents Core Earnings results for our Other segment. Years Ended December 31, % Increase (Decrease) (Dollars in millions) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net interest loss after provision for loan losses $ (72 ) $ (87 ) $ (114 ) (17 )% (24 )% Other income (loss):    Other revenue 47 24 5 96 380    Losses on debt repurchases — — (8 ) — (100 ) Total other income (loss) 47 24 (3 ) 96 (900 ) Expenses: Unallocated shared services operating expenses:    Unallocated information technology costs 77 84 80 (8 ) 5    Unallocated corporate costs 107 151 212 (29 ) (29 ) Total unallocated shared services operating    expenses 184 235 292 (22 ) (20 ) Restructuring/other reorganization    expenses 17 39 25 (56 ) 56 Total expenses 201 274 317 (27 ) (14 ) Loss before income tax benefit (226 ) (337 ) (434 ) (33 ) (22 ) Income tax benefit (54 ) (77 ) (103 ) (30 ) (25 ) Net loss $ (172 ) $ (260 ) $ (331 ) (34 )% (21 )% Net Interest Loss after Provision for Loan Losses Net interest loss after provision for loan losses is due to the negative carrying cost of our corporate liquidity portfolio. The amount of the net interest loss is primarily a result of the size of the liquidity portfolio as well as the cost of funds of the debt funding the corporate liquidity portfolio. Other Revenue All revenue and expense in connection with the transition services we performed related to the outsourcing of loan servicing and divestiture of our Business Processing segment are included in the Other segment. Other revenue increased $23 million, of which $20 million related to these transition services. Unallocated Shared Services Operating Expenses Unallocated shared services operating expenses are costs primarily related to information technology costs related to infrastructure and operations, stock-based compensation expense, accounting, finance, legal, compliance and risk management, regulatory-related expenses, human resources, certain executive management, the Board of Directors, and transition services discussed above under "Other Revenue." Regulatory-related expenses include actual settlement amounts as well as third-party professional fees we incur in connection with such regulatory matters and are presented net of any insurance reimbursements for covered costs related to such matters. Operating expenses decreased $51 million from 2024, primarily as a result of a $35 million decrease in regulatory-related expenses. Regulatory-related expenses were $8 million and $43 million in 2025 and 2024, respectively, with 2024 including a contingency loss accrual of $51 million related to the $120 million settlement agreement entered into with the CFPB in September 2024. The remaining $16 million decrease in expenses primarily related to cost reduction efforts in connection with the various strategic initiatives that have been and continue to be implemented to simplify the Company, reduce our expense base and enhance our flexibility. See “Note 12 — Commitments, Contingencies and Guarantees” for a discussion of legal and regulatory matters where it is reasonably possible that a loss contingency exists. The Company is unable to anticipate the timing of a resolution or the impact that certain matters may have on the Company’s consolidated financial position, liquidity, results of operation or cash flows. As a result, it is not possible at this time to estimate a range of potential exposure, if any, for amounts that may be payable in connection with certain matters and reserves have not been established. It is possible that an adverse ruling or rulings may have a material adverse impact on the Company. Restructuring/Other Reorganization Expenses These expenses decreased $22 million primarily due to a decrease in severance-related costs incurred in connection with the various strategic initiatives that have been and continue to be implemented to simplify the Company, reduce our expense base and enhance our flexibility. 20 Financial Condition This section provides information regarding the balances, activity and credit performance metrics of our education loan portfolio. Summary of our Education Loan Portfolio Ending Education Loan Balances, net December 31, 2025 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Total education loan portfolio: In-school(1) $ 108 $ 7 $ — $ 7 $ 115 Grace, repayment and other(2) 15,707 10,453 17,854 28,307 44,014 Total 15,815 10,460 17,854 28,314 44,129 Allowance for loan losses (364 ) (144 ) (29 ) (173 ) (537 ) Total education loan portfolio $ 15,451 $ 10,316 $ 17,825 $ 28,141 $ 43,592 % of total 35 % 24 % 41 % 65 % 100 % December 31, 2024 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Total education loan portfolio: In-school(1) $ 95 $ 9 $ — $ 9 $ 104 Grace, repayment and other(2) 16,062 11,233 19,790 31,023 47,085 Total 16,157 11,242 19,790 31,032 47,189 Allowance for loan losses (441 ) (139 ) (41 ) (180 ) (621 ) Total education loan portfolio $ 15,716 $ 11,103 $ 19,749 $ 30,852 $ 46,568 % of total 34 % 24 % 42 % 66 % 100 % December 31, 2023 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Total education loan portfolio: In-school(1) $ 70 $ 12 $ — $ 12 $ 82 Grace, repayment and other(2) 17,449 13,708 24,420 38,128 55,577 Total 17,519 13,720 24,420 38,140 55,659 Allowance for loan losses (617 ) (156 ) (59 ) (215 ) (832 ) Total education loan portfolio $ 16,902 $ 13,564 $ 24,361 $ 37,925 $ 54,827 % of total 31 % 25 % 44 % 69 % 100 % (1) Loans for customers still attending school and are not yet required to make payments on the loan. (2) Includes loans in deferment or forbearance. 21 Education Loan Activity Year Ended December 31, 2025 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Beginning balance $ 15,716 $ 11,103 $ 19,749 $ 30,852 $ 46,568 Acquisitions (originations and purchases)(1) 2,482 — — — 2,482 Capitalized interest and premium/discount    amortization 166 505 478 983 1,149 Refinancings and consolidations to third    parties (249 ) (400 ) (504 ) (904 ) (1,153 ) Repayments and other (2,664 ) (892 ) (1,898 ) (2,790 ) (5,454 ) Ending balance $ 15,451 $ 10,316 $ 17,825 $ 28,141 $ 43,592 Year Ended December 31, 2024 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Beginning balance $ 16,902 $ 13,564 $ 24,361 $ 37,925 $ 54,827 Acquisitions (originations and purchases)(1) 1,387 — — — 1,387 Capitalized interest and premium/discount    amortization 191 507 507 1,014 1,205 Refinancings and consolidations to third    parties (219 ) (1,583 ) (3,146 ) (4,729 ) (4,948 ) Repayments and other (2,545 ) (1,385 ) (1,973 ) (3,358 ) (5,903 ) Ending balance $ 15,716 $ 11,103 $ 19,749 $ 30,852 $ 46,568 Year Ended December 31, 2023 (Dollars in millions) Private Education Loans FFELP Stafford and Other FFELP Consolidation Loans Total FFELP Loans Total Portfolio Beginning balance $ 18,725 $ 15,691 $ 27,834 $ 43,525 $ 62,250 Acquisitions (originations and purchases)(1) 970 — — — 970 Capitalized interest and premium/discount    amortization 184 577 616 1,193 1,377 Refinancings and consolidations to third    parties (239 ) (859 ) (1,811 ) (2,670 ) (2,909 ) Repayments and other (2,738 ) (1,845 ) (2,278 ) (4,123 ) (6,861 ) Ending balance $ 16,902 $ 13,564 $ 24,361 $ 37,925 $ 54,827 (1) Includes the origination of $298 million, $201 million and $176 million of Private Education Refinance Loans in 2025, 2024 and 2023, respectively, that refinanced Private Education Loans and FFELP Loans that were on our balance sheet. 22 Private Education Loan Portfolio Performance December 31, 2025 2024 2023 (Dollars in millions) Balance % Balance % Balance % Loans in-school/grace/deferment(1) $ 395 $ 372 $ 360 Loans in forbearance(2) 236 422 363 Loans in repayment and percentage of each    status: Loans current 14,230 93.7 % 14,419 93.9 % 15,935 94.9 % Loans delinquent 31-60 days(3) 326 2.1 319 2.1 308 1.8 Loans delinquent 61-90 days(3) 194 1.3 206 1.3 173 1.0 Loans delinquent greater than 90 days(3) 434 2.9 419 2.7 380 2.3 Total Private Education Loans in repayment 15,184 100 % 15,363 100 % 16,796 100 % Total Private Education Loans 15,815 16,157 17,519 Private Education Loan allowance for losses (364 ) (441 ) (617 ) Private Education Loans, net $ 15,451 $ 15,716 $ 16,902 Percentage of Private Education Loans in    repayment 96.0 % 95.1 % 95.9 % Delinquencies as a percentage of Private    Education Loans in repayment 6.3 % 6.1 % 5.1 % Loans in forbearance as a percentage of loans    in repayment and forbearance 1.5 % 2.7 % 2.1 % Percentage of Private Education Loans with a    cosigner(4) 32 % 32 % 33 % (1) Loans for customers who are attending school or are in other permitted educational activities and are not yet required to make payments on their loans, e.g., loans for customers who have requested and qualify for other permitted program deferments such as various military eligible deferments. (2) Loans for customers who have requested an extension of the grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors such as disaster relief 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. (4) Excluding Private Education Refinance Loans, the cosigner rate was 67%, 66% and 65% for 2025, 2024 and 2023, respectively. FFELP Loan Portfolio Performance December 31, 2025 2024 2023 (Dollars in millions) Balance % Balance % Balance % Loans in-school/grace/deferment(1) $ 1,210 $ 1,262 $ 1,557 Loans in forbearance(2) 3,532 4,365 6,147 Loans in repayment and percentage of each    status: Loans current 19,441 82.4 % 20,675 81.4 % 26,204 86.1 % Loans delinquent 31-60 days(3) 1,075 4.6 1,479 5.8 1,193 3.9 Loans delinquent 61-90 days(3) 706 3.0 1,043 4.1 746 2.5 Loans delinquent greater than 90 days(3) 2,350 10.0 2,208 8.7 2,293 7.5 Total FFELP Loans in repayment 23,572 100 % 25,405 100 % 30,436 100 % Total FFELP Loans 28,314 31,032 38,140 FFELP Loan allowance for losses (173 ) (180 ) (215 ) FFELP Loans, net $ 28,141 $ 30,852 $ 37,925 Percentage of FFELP Loans in repayment 83.3 % 81.9 % 79.8 % Delinquencies as a percentage of FFELP    Loans in repayment 17.5 % 18.6 % 13.9 % FFELP Loans in forbearance as a percentage    of loans in repayment and forbearance 13.0 % 14.7 % 16.8 % (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, who need additional time to obtain employment or who have temporarily ceased making payments due to hardship or other factors such as disaster relief. (3) The period of delinquency is based on the number of days scheduled payments are contractually past due. 23 Allowance for Loan Losses Year Ended December 31, 2025 (Dollars in millions) Private Education Loans FFELP Loans Total Allowance at beginning of period $ 441 $ 180 $ 621 Total provision 249 31 280 Charge-offs:   Gross charge-offs (388 ) (38 ) (426 )   Expected future recoveries on current period gross      charge-offs 53 — 53 Net charge-offs(1) (335 ) (38 ) (373 ) Decrease in expected future recoveries on previously    fully charged-off loans(2) 9 — 9 Allowance at end of period (GAAP) 364 173 537 Plus: expected future recoveries on previously fully    charged-off loans(2) 170 — 170 Allowance at end of period excluding expected future    recoveries on previously fully charged-off loans    (Non-GAAP Financial Measure)(3) $ 534 $ 173 $ 707 Net charge-offs as a percentage of average loans    in repayment 2.18 % .15 % Allowance coverage of charge-offs(3) 1.6 4.5  (Non-GAAP) Allowance as a percentage of the ending total loan    balance(3) 3.4 % .6 %  (Non-GAAP) Allowance as a percentage of the ending loans in    repayment(3) 3.5 % .7 %  (Non-GAAP) Ending total loans $ 15,815 $ 28,314 Average loans in repayment $ 15,343 $ 24,777 Ending loans in repayment $ 15,184 $ 23,572 (1) Charge-offs are reported net of expected recoveries. For Private Education Loans, we charge off the estimated loss of a defaulted loan balance by charging off the entire defaulted loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” For FFELP Loans, the recovery is received at the time of charge-off. (2) At the end of each month, for Private Education Loans that are 212 or more days past due, we charge off the estimated loss of a defaulted loan balance by charging off the entire loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as "expected future recoveries on previously fully charged-off loans." If actual periodic recoveries are less than expected, the difference is immediately reflected as a reduction to expected future recoveries on previously fully charged-off loans. If actual periodic recoveries are greater than expected, they will be reflected as a recovery through the allowance for Private Education Loan losses once the cumulative recovery amount exceeds the cumulative amount originally expected to be recovered. The following table summarizes the activity in the expected future recoveries on previously fully charged-off loans: Year Ended December 31, (Dollars in millions) 2025 Beginning of period expected future recoveries on previously fully charged-off loans $ 179 Expected future recoveries of current period defaults 53 Recoveries (cash collected) (41 ) Charge-offs (as a result of lower recovery expectations) (21 ) End of period expected future recoveries on previously fully charged-off loans $ 170 Change in balance during period $ (9 ) (3) The allowance used for these metrics excludes the expected future recoveries on previously fully charged-off loans to better reflect the current expected credit losses remaining in the portfolio. 24 Year Ended December 31, 2024 (Dollars in millions) Private Education Loans FFELP Loans Total Allowance at beginning of period $ 617 $ 215 $ 832 Total provision 112 1 113 Charge-offs:   Gross charge-offs (378 ) (36 ) (414 )   Expected future recoveries on current period gross      charge-offs 43 — 43 Net charge-offs(1)(2) (335 ) (36 ) (371 ) Decrease in expected future recoveries on previously    fully charged-off loans(3) 47 — 47 Allowance at end of period (GAAP) 441 180 621 Plus: expected future recoveries on previously fully    charged-off loans(3) 179 — 179 Allowance at end of period excluding expected future    recoveries on previously fully charged-off loans    (Non-GAAP Financial Measure)(4) $ 620 $ 180 $ 800 Net charge-offs as a percentage of average loans    in repayment 2.08 % .13 % Allowance coverage of charge-offs(4) 1.8 5.0  (Non-GAAP) Allowance as a percentage of the ending total loan    balance(4) 3.8 % .6 %  (Non-GAAP) Allowance as a percentage of the ending loans in    repayment(4) 4.1 % .7 %  (Non-GAAP) Ending total loans $ 16,157 $ 31,032 Average loans in repayment $ 16,078 $ 27,190 Ending loans in repayment $ 15,363 $ 25,405 (1) $28 million of 2024 Private Education Loan net charge-offs is in connection with the resolution of certain private legacy loans in bankruptcy. This was previously reserved for in 2023. (2) Charge-offs are reported net of expected recoveries. For Private Education Loans, we charge off the estimated loss of a defaulted loan balance by charging off the entire defaulted loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” For FFELP Loans, the recovery is received at the time of charge-off. (3) At the end of each month, for Private Education Loans that are 212 or more days past due, we charge off the estimated loss of a defaulted loan balance by charging off the entire loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as "expected future recoveries on previously fully charged-off loans." If actual periodic recoveries are less than expected, the difference is immediately reflected as a reduction to expected future recoveries on previously fully charged-off loans. If actual periodic recoveries are greater than expected, they will be reflected as a recovery through the allowance for Private Education Loan losses once the cumulative recovery amount exceeds the cumulative amount originally expected to be recovered. The following table summarizes the activity in the expected future recoveries on previously fully charged-off loans: Year Ended December 31, (Dollars in millions) 2024 Beginning of period expected future recoveries on previously fully charged-off loans $ 226 Expected future recoveries of current period defaults 43 Recoveries (cash collected) (41 ) Charge-offs (as a result of lower recovery expectations) (49 ) End of period expected future recoveries on previously fully charged-off loans $ 179 Change in balance during period $ (47 ) (4) The allowance used for these metrics excludes the expected future recoveries on previously fully charged-off loans to better reflect the current expected credit losses remaining in the portfolio. 25 Year Ended December 31, 2023 (Dollars in millions) Private Education Loans FFELP Loans Total Allowance at beginning of period $ 800 $ 222 $ 1,022 Total provision 67 56 123 Charge-offs:   Gross charge-offs (345 ) (63 ) (408 )   Expected future recoveries on current period gross      charge-offs 47 — 47 Net charge-offs(1) (298 ) (63 ) (361 ) Decrease in expected future recoveries on previously    fully charged-off loans(2) 48 — 48 Allowance at end of period (GAAP) 617 215 832 Plus: expected future recoveries on previously fully    charged-off loans(2) 226 — 226 Allowance at end of period excluding expected future    recoveries on previously fully charged-off loans    (Non-GAAP Financial Measure)(3) $ 843 $ 215 $ 1,058 Net charge-offs as a percentage of average loans    in repayment 1.68 % .19 % Allowance coverage of charge-offs(3) 2.8 3.4  (Non-GAAP) Allowance as a percentage of the ending total loan    balance(3) 4.8 % .6 %  (Non-GAAP) Allowance as a percentage of the ending loans in    repayment(3) 5.0 % .7 %  (Non-GAAP) Ending total loans $ 17,519 $ 38,140 Average loans in repayment $ 17,749 $ 33,047 Ending loans in repayment $ 16,796 $ 30,436 (1) Charge-offs are reported net of expected recoveries. For Private Education Loans, we charge off the estimated loss of a defaulted loan balance by charging off the entire defaulted loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” For FFELP Loans, the recovery is received at the time of charge-off. (2) At the end of each month, for Private Education Loans that are 212 days past due, we charge off the estimated loss of a defaulted loan balance by charging off the entire loan balance and estimating recoveries on a pool basis. These estimated recoveries are referred to as “expected future recoveries on previously fully charged-off loans.” If actual periodic recoveries are less than expected, the difference is immediately reflected as a reduction to expected future recoveries on previously fully charged-off loans. If actual periodic recoveries are greater than expected, they will be reflected as a recovery through the allowance for Private Education Loan losses once the cumulative recovery amount exceeds the cumulative amount originally expected to be recovered. The following table summarizes the activity in the expected future recoveries on previously fully charged-off loans: Year Ended December 31, (Dollars in millions) 2023 Beginning of period expected future recoveries on    previously fully charged-off loans $ 274 Expected future recoveries of current period defaults 47 Recoveries (cash collected) (46 ) Charge-offs (as a result of lower recovery expectations) (49 ) End of period expected future recoveries on previously    fully charged-off loans $ 226 Change in balance during period $ (48 ) (3) The allowance used for these metrics excludes the expected future recoveries on previously fully charged-off loans to better reflect the current expected credit losses remaining in the portfolio. 26 Liquidity and Capital Resources Funding and Liquidity Risk Management The following “Liquidity and Capital Resources” discussion concentrates primarily on our Consumer Lending and Federal Education Loans segments. Our Business Processing segment required minimal liquidity and funding. We define liquidity as cash and high-quality liquid assets that we can use to meet our cash requirements. Our two primary liquidity needs are: (1) servicing our debt and (2) our ongoing ability to meet our cash needs for running the operations of our businesses (including derivative collateral requirements) throughout market cycles, including during periods of financial stress. Secondary liquidity needs, which can be adjusted as needed, include the origination of Private Education Loans, acquisitions of Private Education Loan portfolios, acquisitions of companies, the payment of common stock dividends and the repurchase of our common stock. To achieve these objectives, we analyze and monitor our liquidity needs and maintain excess liquidity and access to diverse funding sources including the issuance of unsecured debt and the issuance of secured debt primarily through asset-backed securitizations and/or other financing facilities. We define our liquidity risk as the potential inability to meet our obligations when they become due without incurring unacceptable losses or inability to invest in future asset growth and business operations at reasonable market rates. Our primary liquidity risk relates to our ability to service our debt, meet our other business obligations and to continue to grow our business. The ability to access the capital markets is impacted by general market and economic conditions, our credit ratings, as well as the overall availability of funding sources in the marketplace. In addition, credit ratings may be important to customers or counterparties when we compete in certain markets and when we seek to engage in certain transactions. Credit ratings and outlooks are opinions subject to ongoing review by the rating agencies and may change, from time to time, based on our financial performance, industry and market dynamics and other factors. Other factors that influence our credit ratings include the rating agencies’ assessment of the general operating environment, our relative positions in the markets in which we compete, reputation, liquidity position, the level and volatility of earnings, corporate governance and risk management policies, capital position and capital management practices. A negative change in our credit rating could have a negative effect on our liquidity because it might raise the cost and availability of funding and potentially require additional cash collateral or restrict cash currently held as collateral on existing borrowings or derivative collateral arrangements. It is our objective to improve our credit ratings so that we can continue to efficiently access the capital markets even in difficult economic and market conditions. We have unsecured debt totaling $5.3 billion at December 31, 2025. Three credit rating agencies currently rate our long-term unsecured debt at below investment grade. We expect to fund our ongoing liquidity needs, including the repayment of $0.5 billion of senior unsecured notes that mature in the short term (i.e., over the next 12 months) and the remaining $4.8 billion of senior unsecured notes that mature in the long term (from 2027 to 2043 with 79% maturing by 2032), through a number of sources. These sources include our cash on hand, unencumbered Private Education Refinance Loan and FFELP Loan portfolios (see “Sources of Primary Liquidity” below), the predictable operating cash flows provided by operating activities, the repayment of principal on unencumbered education loan assets, and the distribution of overcollateralization from our securitization trusts. We may also, depending on market conditions and availability, draw down on our secured Private Education Loan and FFELP Loan asset-backed commercial paper (ABCP) facilities, issue term asset-backed securities (ABS), enter into additional Private Education Loan and FFELP Loan ABS repurchase facilities, or issue additional unsecured debt. We originate Private Education Loans (a portion of which is obtained through a forward purchase agreement). We also have purchased and may purchase, in future periods, Private Education Loan portfolios from third parties. Those originations and purchases are part of our ongoing liquidity needs. We repurchased 8.5 million shares of common stock for $111 million in 2025 and have $100 million of unused share repurchase authority as of December 31, 2025. 27 Sources of Primary Liquidity Ending Balances Average Balances December 31, Years Ended December 31, (Dollars in millions) 2025 2024 2025 2024 2023 Unrestricted cash $ 637 $ 722 $ 627 $ 937 $ 1,024 Unencumbered Private Education Refinance    Loans 529 242 578 331 105 Unencumbered FFELP Loans 83 232 92 190 89 Total $ 1,249 $ 1,196 $ 1,297 $ 1,458 $ 1,218 Sources of Additional Liquidity Liquidity may also be available under our secured credit facilities. Maximum borrowing capacity under the Private Education Loan and FFELP Loan ABCP facilities will vary and be subject to each agreement’s borrowing conditions, including, among others, facility size, current usage and availability of qualifying collateral from unencumbered loans. The following tables detail the additional borrowing capacity of these facilities with maturity dates ranging from June 2026 to April 2027. Maximum Additional Capacity December 31, (Dollars in millions) 2025 2024 2023 Ending Balances: Private Education Loan ABCP facilities $ 1,689 $ 1,490 $ 1,719 FFELP Loan ABCP facilities 193 424 408 Total $ 1,882 $ 1,914 $ 2,127 Average Maximum Additional Capacity Years Ended December 31, (Dollars in millions) 2025 2024 2023 Average Balances: Private Education Loan ABCP facilities $ 1,703 $ 1,777 $ 1,756 FFELP Loan ABCP facilities 234 415 103 Total $ 1,937 $ 2,192 $ 1,859 At December 31, 2025, we had a total of $2.9 billion of unencumbered tangible assets inclusive of those listed in the table above as sources of primary liquidity. Total unencumbered education loans comprised $1.4 billion of our unencumbered tangible assets of which $1.3 billion and $83 million related to Private Education Loans and FFELP Loans, respectively. In addition, as of December 31, 2025, we had $4.7 billion of encumbered net assets (i.e., overcollateralization) in our various financing facilities (consolidated variable interest entities). We enter into repurchase facilities at times to borrow against the encumbered net assets of these financing vehicles. As of December 31, 2025, $0.6 billion of repurchase facility borrowings were outstanding. The following table reconciles encumbered and unencumbered assets and their net impact on total Tangible Equity. (Dollars in billions) December 31, 2025 December 31, 2024 Net assets of consolidated variable interest    entities (encumbered assets) — Private Education Loans $ 2.1 $ 2.0 Net assets of consolidated variable interest entities    (encumbered assets) — FFELP Loans 2.6 2.8 Tangible unencumbered assets(1) 2.9 2.9 Senior unsecured debt (5.3 ) (5.4 ) Mark-to-market on unsecured hedged debt(2) — .2 Other liabilities, net (.3 ) (.3 ) Total Tangible Equity(3) $ 2.0 $ 2.2 (1) Excludes goodwill and acquired intangible assets. (2) At December 31, 2025 and 2024, there were $(50) million and $(181) million, respectively, of net gains (losses) on derivatives hedging this debt in unencumbered assets, which partially offset these gains (losses). (3) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.” 28 Borrowings Ending Balances December 31, 2025 December 31, 2024 December 31, 2023 (Dollars in millions) Short Term Long Term Total Short Term Long Term Total Short Term Long Term Total Unsecured borrowings: Senior unsecured    debt $ 525 $ 4,782 $ 5,307 $ 553 $ 4,806 $ 5,359 $ 506 $ 5,351 $ 5,857 Total unsecured    borrowings 525 4,782 5,307 553 4,806 5,359 506 5,351 5,857 Secured borrowings: Private Education    Loan securitizations 469 10,250 10,719 631 10,338 10,969 435 11,754 12,189 FFELP Loan    securitizations 109 25,302 25,411 41 28,268 28,309 59 35,626 35,685 Private Education    Loan ABCP    facilities 1,942 — 1,942 2,274 — 2,274 1,286 821 2,107 FFELP Loan ABCP    facilities 1,869 299 2,168 1,586 74 1,660 1,854 89 1,943 Other 160 39 199 54 40 94 95 39 134 Total secured    borrowings 4,549 35,890 40,439 4,586 38,720 43,306 3,729 48,329 52,058 Core Earnings basis    borrowings(1) 5,074 40,672 45,746 5,139 43,526 48,665 4,235 53,680 57,915 Adjustment for GAAP    accounting treatment (1 ) (39 ) (40 ) (5 ) (342 ) (347 ) (9 ) (278 ) (287 ) GAAP basis    borrowings $ 5,073 $ 40,633 $ 45,706 $ 5,134 $ 43,184 $ 48,318 $ 4,226 $ 53,402 $ 57,628 Average Balances Years Ended December 31, 2025 2024 2023 (Dollars in millions) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Unsecured borrowings: Senior unsecured debt $ 5,362 8.37 % $ 5,765 9.11 % $ 6,363 8.74 % Total unsecured borrowings 5,362 8.37 5,765 9.11 6,363 8.74 Secured borrowings: Private Education Loan    securitizations 10,783 3.72 11,692 3.68 12,800 3.45 FFELP Loan securitizations 26,948 5.46 31,710 6.37 38,652 5.68 Private Education Loan ABCP facilities 1,998 6.28 2,030 7.26 2,448 6.87 FFELP Loan ABCP facilities 1,904 5.66 1,716 6.79 1,773 6.40 Other 127 2.55 108 — 106 1.91 Total secured borrowings 41,760 5.05 47,256 5.74 55,779 5.24 Core Earnings basis borrowings(1) 47,122 5.43 53,021 6.10 62,142 5.60 Adjustment for GAAP accounting treatment — .06 — .07 — .12 GAAP basis borrowings $ 47,122 5.49 % $ 53,021 6.17 % $ 62,142 5.72 % (1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.” The differences in derivative accounting give rise to the difference above. 29 Critical Accounting Policies and Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). “Note 2 — Significant Accounting Policies” includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. Actual results may differ from these estimates under varying assumptions or conditions. On a quarterly basis, management evaluates its estimates, particularly those that include the most difficult, subjective or complex judgments and are often about matters that are inherently uncertain. Critical accounting estimates involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of our operations. Our critical accounting policies and estimates are the allowance for loan losses, goodwill impairment assessment, and loan premium and discount amortization. Allowance for Loan Losses We measure and recognize an allowance for loan losses that estimates the remaining current expected credit losses (CECL) for financial assets measured at amortized cost held at the reporting date. We have determined that, for modeling current expected credit losses, in general, we can reasonably estimate expected losses that incorporate current and forecasted economic conditions over a “reasonable and supportable” period. For Private Education Loans, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the loans. The development of the reasonable and supportable forecast incorporates an assumption that each macroeconomic variable will revert to a long-term expectation starting in years 2-4 of the forecast and largely completing within the first five years of the forecast. For FFELP Loans, after a three-year reasonable and supportable period, there is an immediate reversion to a long-term expectation. The models used to project losses utilize key credit quality indicators of the loan portfolios and predict how those attributes are expected to perform in connection with the forecasted economic conditions. In connection with this methodology, our modeling of current expected credit losses utilizes historical loan repayment experience since 2008 identifying loan variables (key credit quality indicators) that are significantly predictive of loans that will default and predicts how loans will perform in connection with the forecasted economic conditions. The key credit quality indicators used by the model for Private Education Loans are credit scores (FICO scores), loan status, loan seasoning, certain types of loan modifications, the existence of a cosigner and school type: • Credit scores are an indicator of the credit risk of a customer and generally the higher the credit score the more likely it is the customer will be able to make all of their contractual payments. • Loan status affects the credit risk because generally a past due loan is more likely to default than an up-to-date loan. Additionally, loans in a deferred payment status have different credit risk profiles compared with those in current payment status. • Of the portfolio in repayment, loan seasoning affects credit risk because a loan with a history of making payments generally has a lower incidence of default than a loan with a history of making infrequent or no payments. • Certain types of loan modifications are those that represent the historical definition of a troubled debt restructuring (TDR) prior to the implementation of ASU No. 2022-02 on January 1, 2023. Any loan that meets the historical definition of a TDR retains that classification, as a key credit quality indicator used for calculating the allowance for loan losses, for the life of the loan (including loans that met that definition subsequent to January 1, 2023). A TDR is where an economic concession (interest rate modifications, term extensions or forbearance greater than 3 months in the prior 24-month period) has been given to a borrower experiencing financial difficulties. This classification is not intended to reconcile in any way to the new modification disclosures required under ASU No. 2022-02. • The existence of a cosigner generally lowers the likelihood of default, thus lowering the credit risk. • The type of school customers attended can have an impact on their graduation rate and job prospects after graduation and therefore can affect their ability to make payments, which impacts the credit risk. For FFELP Loans, the key credit quality indicators are loan status and loan type (Stafford, Consolidation and Rehab loans). We project losses over the contractual term of our loans, including any extension options within the control of the borrower. Further, we make estimates regarding prepayments when determining our expected credit losses which are derived in the same manner discussed above. 30 The forecasted economic conditions used in our modeling of expected losses are provided by a third party. The primary economic metrics we generally use in the economic forecast are unemployment, GDP, interest rates, consumer loan delinquency rates and consumer income. Several forecast scenarios are provided which represent the baseline economic expectations as well as favorable and adverse scenarios. We analyze and evaluate the alternative scenarios for reasonableness and determine the appropriate weighting of these alternative scenarios based upon the current economic conditions and our view of the likelihood and risks of the alternative scenarios. We use historical customer payment experience to estimate the amount of future recoveries (and the resulting net charge-off rate) on defaulted Private Education Loans. We use judgment in determining whether historical performance is representative of what we expect to collect in the future. The amount of expected future recoveries on defaulted FFELP Loans is based on the contractual government guarantee (which generally limits the maximum loss to 3% of the loan balance). Once our loss model calculations are performed, we determine if qualitative adjustments are needed for factors not reflected in the quantitative model. These adjustments may include, but are not limited to, changes in lending, servicing and collection policies and practices as well as the effect of other external factors such as the economy and changes in legal or regulatory requirements that impact the amount of future credit losses. The Private Education Loan provision for loan losses of $249 million in 2025 included $41 million associated with loan originations and $208 million primarily associated with elevated delinquency balances as well as our forecasted macroeconomic outlook. The FFELP Loan provision for loan losses of $31 million was primarily the result of elevated delinquency balances, our forecasted macroeconomic outlook, as well as the continued extension of the portfolio. We evaluated and considered several forecasted economic scenarios when determining our allowance for loan losses and provision. We also considered the characteristics of our loan portfolio and its expected behavior in the forecasted economic scenarios. In general, there has been a decline in the forecasted economic conditions since December 31, 2024 which has been incorporated into our allowance for loan losses as of December 31, 2025. This decline in economic conditions is seen mostly in an increase in forecasted unemployment rates and consumer loan delinquency rates. We have seen an increase in the delinquency rates on our portfolio during 2025 and there remains uncertainty as to the ultimate impact to the economy from historically high inflation experienced during earlier years (primarily 2021 to 2024) and the significant increase in interest rates that began in 2022 and remain at the end of 2025. There is also uncertainty related to the potential negative impact on the portfolio from the end of various payment relief and stimulus benefits that previously occurred. These conclusions and adjustments were based on an evaluation of current and forecasted economic conditions. If future economic conditions are significantly worse than what was assumed as a part of this assessment, it could result in additional provision for loan loss being recorded in future periods. The evaluation of the allowance for loan losses is inherently subjective, as it requires material estimates and assumptions that are used to project losses over the remaining life of the portfolio (in excess of 15 years). These assumptions and estimates are susceptible to significant changes. If actual future performance in delinquency, charge-offs and recoveries are significantly different than estimated, or management’s assumptions or practices were to change, this could materially affect our estimate of the allowance for loan losses and the related provision for loan losses on our income statement. Goodwill Impairment Assessment In determining annually (or more frequently if required) whether goodwill is impaired, we complete a goodwill impairment analysis which may be a qualitative or a quantitative analysis depending on the facts and circumstances associated with the reporting unit. Qualitative factors considered in conjunction with a qualitative analysis include: (1) the amount of cushion that existed the last time a quantitative test was completed which requires performing a valuation of the reporting unit, the resulting value of which is compared to the carrying value of the reporting unit, (2) macroeconomic factors (economy), (3) industry specific factors (growth or deterioration of the market; regulatory/political developments), (4) cost factors (margins), (5) financial performance of the reporting unit itself, (6) other specific items (litigation, change in management or key personnel) and (7) whether a sustained decrease in our share price is indicative of a decline in value of the specific reporting unit. There can be significant judgment involved in assessing these qualitative factors. If, based on a qualitative analysis, we determine it is “more-likely-than-not” that the fair value of a reporting unit is less than its carrying amount, we also complete a quantitative impairment analysis. In lieu of performing a qualitative assessment, we may proceed directly to a quantitative impairment analysis. A quantitative goodwill impairment analysis requires a comparison of the fair value of the reporting unit to its carrying value. If the carrying value of the reporting unit exceeds the reporting unit’s fair value (the amount we believe a third party would pay for such reporting unit), the goodwill associated with the reporting unit will be impaired in an amount equal to the difference between the reporting unit’s fair value and its carrying value, not to exceed the carrying value of goodwill attributed to the reporting unit. There are significant judgments involved in determining the fair value of a reporting unit, including determining the appropriate valuation approach or approaches to utilize and the assumptions to apply including estimates of projected future cash flows, which incorporate estimated future revenues, expenses, net income and capital expenditures from and related to existing and new business activities, and appropriate discount rates and growth rates as well as market multiples if a market approach is utilized. An appropriate resulting 31 control premium is also considered. The reporting units with goodwill for which we estimate fair value are not publicly traded and for some reporting units, directly comparable market data may not be available to aid in its valuation. Navient tests goodwill as of October 1 each year or at interim dates if an event occurs or circumstances exist such that it is determined that it is "more-likely-than-not" that the fair value of the reporting unit is less than its carrying value (the qualitative test). Such an event or circumstance is a triggering event. If it is concluded that a triggering event has occurred at an interim date, a quantitative impairment test must be performed. Interim Impairment Testing Based on the current performance of and economic environment impacting the reporting units with goodwill, we determined that no triggering events occurred during 2025. Accordingly, an interim impairment test was not warranted to test goodwill associated with reporting units with goodwill at March 31, June 30 and September 30, 2025. Annual Impairment Testing We performed annual goodwill impairment testing as of October 1, 2025. In accordance with our policy to perform a quantitative test for all reporting units with goodwill every three years in conjunction with annual impairment testing, we elected to retain a third-party appraisal firm to assist in the valuations required to perform a quantitative impairment test for our Private Education Legacy In-School Loans, Private Education Refinance Loans, Private Education Recent In-School Loans, FFELP Loans, and Federal Education Loan Servicing reporting units as of October 1, 2025. Utilizing an income approach, no goodwill was deemed impaired in conjunction with these reporting units as a result of the quantitative impairment test as the fair values of the reporting units were greater than their respective carry values. Additionally, fair values resulting from sensitivity analyses factoring in more conservative discount rates and growth rates for each reporting unit also yielded fair values in excess of the carrying values of each reporting unit. The income approach measures the value of each reporting unit’s future economic benefit determined by its discounted cash flows derived from our projections plus an assumed terminal growth rate consistent with what we believe a market participant would assume in an acquisition. These projections are generally five-year projections that reflect the anticipated cash flow fluctuations of the respective reporting units. If a component of a reporting unit is winding down or is assumed to wind down, the projections extend through the anticipated wind-down period, and no residual value is ascribed. Under our guidance, the third-party appraisal firm developed the discount rate for each reporting unit incorporating such factors as the risk-free rate, a market rate of return, a measure of volatility (Beta), a capital markets risk premium, and a company-specific risk premium for each reporting unit, as appropriate, to adjust for volatility and uncertainty in the economy and to capture specific risk related to the respective reporting units. We considered whether an asset sale or an equity sale would be the most likely sale structure for each reporting unit and valued each reporting unit based on the more likely hypothetical scenario. The discount rates reflect market-based estimates of capital costs and are adjusted for our assessment of a market participant’s view with respect to execution and other risks associated with the projected cash flows of individual reporting units. We reviewed and approved the discount rates provided by the third-party appraiser, including the factors incorporated in developing the discount rates for each reporting unit. Although the timing of impairment remains uncertain, for the FFELP Loans reporting unit, goodwill will be impaired at some point in the future due to the runoff nature of the portfolio. FFELP Loans goodwill was not deemed impaired as a result of the quantitative impairment test as the fair value of the reporting unit was greater than the reporting unit’s carry value. However, our current projections of future cash flows could result in partial impairment of FFELP goodwill in the next couple of years. The potential timing of impairment could be accelerated if prepayment rates are higher than anticipated or if there is significant change in economic and other factors impacting the discount rate used to determine the fair value of the projected cashflows and thus the reporting unit. Since our estimate of future portfolio cash flows may change, the estimated timing of partial future impairment may also change. To derive the cash flows underlying the income approach for each reporting unit, we considered the regulatory and legislative environment, the economic environment, and our 2025 earnings and 2026 expected earnings as of October 1, 2025. We also considered our market capitalization in relation to our book equity and concluded that no goodwill associated with our reporting units was impaired as of October 1, 2025. Although our market capitalization was less than our book equity at October 1, 2025, we have concluded that our market capitalization is not indicative of the value of our reporting units with goodwill on a standalone basis. We considered events subsequent to October 1, 2025, including the decrease in share price which occurred subsequent to December 31, 2025, noting no event which negatively impacted the fair values of our reporting units with goodwill through December 31, 2025. We will continue to monitor our market capitalization to determine if a triggering event occurs in 2026. 32 Loan Premium and Discount Amortization The Company had a net unamortized premium balance of $185 million, or 0.42%, in connection with its $44 billion education loan portfolio as of December 31, 2025. The most judgmental estimate for premium and discount amortization on education loans is the Constant Prepayment Rate (CPR), which measures the rate at which loans in the portfolio pay down principal compared to their stated terms. In determining the CPR, we only consider payments made in excess of contractually required payments. This would include loans that are refinanced or consolidated and other early payoff activity. These activities are generally affected by changes in our business strategy, changes in our competitors’ business strategies, legislative changes including the ability to consolidate, interest rates and changes to the current economic and credit environment. When we determine the CPR, we begin with historical prepayment rates. We make judgments about which historical period to start with and then make further judgments about whether that historical experience is representative of future expectations and whether additional adjustment may be needed to those historical prepayment rates. As a result of the passage of the Health Care and Education Reconciliation Act of 2010 (HCERA), there is no longer the ability to consolidate loans under the FFELP although there are other consolidation options with the Department of Education (ED) and private refinancing options with Navient and other lenders. At this time, we expect CPRs related to our FFELP Loans to remain relatively stable over time, unless there is a regulatory change by ED or legislative change by Congress to either (1) forgive loan balances (which would result in Navient receiving cash for the amounts forgiven resulting in a prepayment of principal) or (2) encourage or force consolidation. Some education loan companies, including Navient, offer Private Education Loans to refinance a borrower’s loan (both FFELP and Private Education Loans). These products and the related expectation of use are built into the CPR assumption we use for FFELP and Private Education Loans. However, it is difficult to accurately project the timing and level at which this activity will continue, and our assumption may need to be updated by a material amount in the future based on changes in the economy, marketplace and legislation. In 2025, there was a net $11 million increase in net interest income due to cumulative adjustments related to changes in prepayment speed assumptions used to amortize loan premiums and discounts. This primarily relates to our FFELP Loan portfolio where we have experienced historically low prepayment activity (3% prepayment rate) in 2025. The FFELP Loan portfolio experienced a $4.4 billion decrease in prepayments ($977 million in 2025 compared with $5.4 billion in 2024), primarily as a result of federal education loan policy changes. The introduction of several student loan forgiveness and repayment programs and processes, including a repayment plan called Saving on a Valuable Education (SAVE Plan), under the prior administration triggered increased consolidation activity in 2024 as FFELP borrowers consolidated their loans into the Direct Loan Program in order to be eligible for these programs. In 2025, changes in administration resulted in shifts in federal education loan policy priorities, including the curtailment of many forgiveness initiatives and changes to the operations of ED. As a result of these changes and the impact to prepayment activity, the prepayment speed assumption was lowered from 5% to 3% over the next three years (through the end of the current administration’s current term in 2028) and then 5% (long-term historical prepayment rate experienced) thereafter. This results in the slowing down of the amortization of the premium on these loans which has the effect of increasing interest income in the period of the assumption change. The passage of the Big Beautiful Bill in July 2025 marked a significant shift in the federal education loan system and policies. The Big Beautiful Bill mandates, among others, restructuring of the federal education loan repayment options, including the replacement of multiple existing income-driven repayment plans with a new repayment plan called Repayment Assistance Plan (RAP) to be implemented in July 2026. The Big Beautiful Bill also eliminates the GradPLUS loan program effective July 2026. Although consolidation activity decreased significantly in 2025 from the prior year, consolidation activity in the future may fluctuate as federal student loan policies continue to evolve, which could have a material impact on the Company’s results. 33 Non-GAAP Financial Measures In addition to financial results reported on a GAAP basis, Navient also provides certain performance measures which are non-GAAP financial measures. We present the following non-GAAP financial measures: (1) Core Earnings, (2) Tangible Equity (as well as the Adjusted Tangible Equity Ratio), and (3) Allowance for Loan Losses Excluding Expected Future Recoveries on Previously Fully Charged-off Loans. Definitions for the non-GAAP financial measures and reconciliations are provided below, except that reconciliations of forward-looking non-GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of certain items, including, but not limited to, the impact of any mark-to-market gains/losses resulting from our use of derivative instruments to hedge our economic risks. 1. Core Earnings We prepare financial statements and present financial results in accordance with GAAP. However, we also evaluate our business segments and present financial results on a basis that differs from GAAP. We refer to this different basis of presentation as Core Earnings. We provide this Core Earnings basis of presentation on a consolidated basis and for each business segment because this is what we review internally when making management decisions regarding our performance and how we allocate resources. We also refer to this information in our presentations with credit rating agencies, lenders and investors. Because our Core Earnings basis of presentation corresponds to our segment financial presentations, we are required by GAAP to provide certain Core Earnings disclosures in the notes to our consolidated financial statements for our business segments. Core Earnings are not a substitute for reported results under GAAP. We use Core Earnings to manage our business segments because Core Earnings reflect adjustments to GAAP financial results for two items, discussed below, that can create significant volatility mostly due to timing factors generally beyond the control of management. Accordingly, we believe that Core Earnings provide management with a useful basis from which to better evaluate results from ongoing operations against the business plan or against results from prior periods. Consequently, we disclose this information because we believe it provides investors with additional information regarding the operational and performance indicators that are most closely assessed by management. When compared to GAAP results, the two items we remove to result in our Core Earnings presentations are: (1) Mark-to-market gains/losses resulting from our use of derivative instruments to hedge our economic risks that do not qualify for hedge accounting treatment or do qualify for hedge accounting treatment but result in ineffectiveness; and (2) The accounting for goodwill and acquired intangible assets. While GAAP provides a uniform, comprehensive basis of accounting, for the reasons described above, our Core Earnings basis of presentation does not. Core Earnings are subject to certain general and specific limitations that investors should carefully consider. For example, there is no comprehensive, authoritative guidance for management reporting. Our Core Earnings are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. Accordingly, our Core Earnings presentation does not represent a comprehensive basis of accounting. Investors, therefore, may not be able to compare our performance with that of other financial services companies based upon Core Earnings. Core Earnings results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely used by management, our Board of Directors, credit rating agencies, lenders and investors to assess performance. 34 The following tables show our consolidated GAAP results, Core Earnings results (including for each reportable segment) along with the adjustments made to the income/expense items to reconcile the consolidated GAAP results to the Core Earnings results as required by GAAP and reported in “Note 14 — Segment Reporting.” Year Ended December 31, 2025 Adjustments Reportable Segments (Dollars in millions) Total GAAP Reclassi- fications Additions/ (Subtractions) Total Adjustments (1) Total Core Earnings Consumer Lending Federal Education Loans Business Processing Other Interest income: Education loans $ 3,025 $ 1,122 $ 1,903 $ — $ — Cash and investments 83 20 39 — 24 Total interest income 3,108 1,142 1,942 — 24 Total interest expense 2,589 731 1,730 — 96 Net interest income    (loss) 519 $ 18 $ 14 $ 32 $ 551 411 212 — (72 ) Less: provisions for loan    losses 280 280 249 31 — — Net interest income    (loss) after provisions    for loan losses 239 162 181 — (72 ) Other income (loss): Servicing revenue 51 11 40 — — Asset recovery and    business processing    revenue 23 — — 23 — Other revenue (loss) 17 1 (1 ) — 47 Total other income    (loss) 91 (18 ) 48 30 121 12 39 23 47 Expenses: Direct operating    expenses 237 147 70 20 — Unallocated shared    services expenses 184 — — — 184 Operating expenses 421 — — — 421 147 70 20 184 Goodwill and acquired    intangible asset    impairment and    amortization 3 — (3 ) (3 ) — — — — — Restructuring/other    reorganization    expenses 17 — — — 17 — — — 17 Total expenses 441 — (3 ) (3 ) 438 147 70 20 201 Income (loss) before    income tax expense    (benefit) (111 ) — 65 65 (46 ) 27 150 3 (226 ) Income tax expense    (benefit)(2) (31 ) — 20 20 (11 ) 7 35 1 (54 ) Net income (loss) $ (80 ) $ — $ 45 $ 45 $ (35 ) $ 20 $ 115 $ 2 $ (172 ) (1) Core Earnings adjustments to GAAP: Year Ended December 31, 2025 (Dollars in millions) Net Impact of Derivative Accounting Net Impact of Acquired Intangibles Total Net interest income (loss) after provisions for loan losses $ 32 $ — $ 32 Total other income (loss) 30 — 30 Goodwill and acquired intangible asset impairment and amortization — (3 ) (3 ) Total Core Earnings adjustments to GAAP $ 62 $ 3 65 Income tax expense (benefit) 20 Net income (loss) $ 45 (2) Income taxes are based on a percentage of net income before tax for the individual reportable segment. 35 Year Ended December 31, 2024 Adjustments Reportable Segments (Dollars in millions) Total GAAP Reclassi- fications Additions/ (Subtractions) Total Adjustments (1) Total Core Earnings Consumer Lending Federal Education Loans Business Processing Other Interest income: Education loans $ 3,655 $ 1,259 $ 2,397 $ — $ — Cash and investments 154 25 88 — 41 Total interest income 3,809 1,284 2,485 — 41 Total interest expense 3,273 786 2,323 — 128 Net interest income    (loss) 536 $ 35 $ 2 $ 37 $ 573 498 162 — (87 ) Less: provisions for loan    losses 113 113 112 1 — — Net interest income    (loss) after provisions    for loan losses 423 386 161 — (87 ) Other income (loss): Servicing revenue 54 10 44 — — Asset recovery and    business processing    revenue 271 — — 271 — Other revenue 100 1 5 — 24 Gain on sale of subsidiaries,    net 191 — — — — — — 191 — Total other income    (loss) 616 (35 ) (35 ) (70 ) 546 11 49 462 24 Expenses: Direct operating    expenses 445 143 74 228 — Unallocated shared    services expenses 235 — — — 235 Operating expenses 680 — — — 680 143 74 228 235 Goodwill and acquired    intangible asset    impairment and    amortization 146 — (146 ) (146 ) — — — — — Restructuring/other    reorganization    expenses 39 — — — 39 — — — 39 Total expenses 865 — (146 ) (146 ) 719 143 74 228 274 Income (loss) before    income tax expense    (benefit) 174 — 113 113 287 254 136 234 (337 ) Income tax expense    (benefit)(2) 43 — 23 23 66 58 31 54 (77 ) Net income (loss) $ 131 $ — $ 90 $ 90 $ 221 $ 196 $ 105 $ 180 $ (260 ) (1) Core Earnings adjustments to GAAP: Year Ended December 31, 2024 (Dollars in millions) Net Impact of Derivative Accounting Net Impact of Acquired Intangibles Total Net interest income (loss) after provisions for loan losses $ 37 $ — $ 37 Total other income (loss) (70 ) — (70 ) Goodwill and acquired intangible asset impairment and amortization — (146 ) (146 ) Total Core Earnings adjustments to GAAP $ (33 ) $ 146 113 Income tax expense (benefit) 23 Net income (loss) $ 90 (2) Income taxes are based on a percentage of net income before tax for the individual reportable segment. 36 Year Ended December 31, 2023 Adjustments Reportable Segments (Dollars in millions) Total GAAP Reclassi- fications Additions/ (Subtractions) Total Adjustments (1) Total Core Earnings Consumer Lending Federal Education Loans Business Processing Other Interest income: Education loans $ 4,266 $ 1,369 $ 2,901 $ — $ — Cash and investments 153 27 76 — 50 Total interest income 4,419 1,396 2,977 — 50 Total interest expense 3,557 816 2,497 — 164 Net interest income    (loss) 862 $ 32 $ 52 $ 84 $ 946 580 480 — (114 ) Less: provisions for loan    losses 123 123 67 56 — — Net interest income    (loss) after provisions    for loan losses 739 513 424 — (114 ) Other income (loss): Servicing revenue 64 12 52 — — Asset recovery and    business processing    revenue 321 — — 321 — Other revenue 32 2 14 — 5 Losses on debt repurchases (8 ) — — — — — — — (8 ) Total other income    (loss) 409 (32 ) 21 (11 ) 398 14 66 321 (3 ) Expenses: Direct operating    expenses 508 151 72 285 — Unallocated shared    services expenses 292 — — — 292 Operating expenses 800 — — — 800 151 72 285 292 Goodwill and acquired    intangible asset    impairment and    amortization 10 — (10 ) (10 ) — — — — — Restructuring/other    reorganization    expenses 25 — — — 25 — — — 25 Total expenses 835 — (10 ) (10 ) 825 151 72 285 317 Income (loss) before    income tax expense    (benefit) 313 — 83 83 396 376 418 36 (434 ) Income tax expense    (benefit)(2) 85 — 8 8 93 89 99 8 (103 ) Net income (loss) $ 228 $ — $ 75 $ 75 $ 303 $ 287 $ 319 $ 28 $ (331 ) (1) Core Earnings adjustments to GAAP: Year Ended December 31, 2023 (Dollars in millions) Net Impact of Derivative Accounting Net Impact of Acquired Intangibles Total Net interest income (loss) after provisions for loan losses $ 84 $ — $ 84 Total other income (loss) (11 ) — (11 ) Goodwill and acquired intangible asset impairment and amortization — (10 ) (10 ) Total Core Earnings adjustments to GAAP $ 73 $ 10 83 Income tax expense (benefit) 8 Net income (loss) $ 75 (2) Income taxes are based on a percentage of net income before tax for the individual reportable segment. 37 The following discussion summarizes the differences between Core Earnings and GAAP net income and details each specific adjustment required to reconcile our Core Earnings segment presentation to our GAAP earnings. Years Ended December 31, (Dollars in millions) 2025 2024 2023 GAAP net income (loss) $ (80 ) $ 131 $ 228 Core Earnings adjustments to GAAP: Net impact of derivative accounting 62 (33 ) 73 Net impact of goodwill and acquired intangible assets 3 146 10 Net income tax effect (20 ) (23 ) (8 ) Total Core Earnings adjustments to GAAP 45 90 75 Core Earnings net income (loss) $ (35 ) $ 221 $ 303 (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. The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. The gains and losses recorded in “Gains (losses) on derivative and hedging activities, net” and interest expense (for qualifying fair value hedges) are primarily caused by interest rate and foreign currency exchange rate volatility and changing credit spreads during the period as well as the volume and term of derivatives not receiving hedge accounting treatment. We believe that our derivatives are effective economic hedges, and as such, are a critical element of our interest rate and foreign currency risk management strategy. However, some of our derivatives do not qualify for hedge accounting treatment and the stand-alone derivative is adjusted to fair value in the income statement with no consideration for the corresponding change in fair value of the hedged item. 38 The table below quantifies the adjustments for derivative accounting between GAAP and Core Earnings net income. Years Ended December 31, (Dollars in millions) 2025 2024 2023 Core Earnings derivative adjustments: (Gains) losses on derivative and hedging activities, net,    included in other income $ 30 $ (70 ) $ (11 ) Plus: (Gains) losses on fair value hedging activity included    in interest expense 7 (5 ) 46 Total (gains) losses in GAAP net income 37 (75 ) 35 Plus: Reclassification of settlement income (expense) on    derivative and hedging activities, net(1) 18 35 32 Mark-to-market (gains) losses on derivative and hedging    activities, net(2) 55 (40 ) 67 Amortization of net premiums on Floor Income Contracts    in net interest income for Core Earnings — 1 4 Other derivative accounting adjustments(3) 7 6 2 Total net impact of derivative accounting $ 62 $ (33 ) $ 73 (1) Derivative accounting requires net settlement income/expense on derivatives that do not qualify as hedges to be recorded in a separate income statement line item below net interest income. Under our Core Earnings presentation, these settlements are reclassified to the income statement line item of the economically hedged item. For our Core Earnings net interest income, this would primarily include reclassifying the net settlement amounts related to certain of our interest rate swaps to debt interest expense. The table below summarizes these net settlements on derivative and hedging activities and the associated reclassification on a Core Earnings basis. Years Ended December 31, (Dollars in millions) 2025 2024 2023 Reclassification of settlements on derivative and    hedging activities: Net settlement income (expense) on interest rate    swaps reclassified to net interest income $ 18 $ 35 $ 32 Total reclassifications of settlement income    (expense) on derivative and hedging activities $ 18 $ 35 $ 32 (2) “Mark-to-market (gains) losses on derivative and hedging activities, net” is comprised of the following: Years Ended December 31, (Dollars in millions) 2025 2024 2023 Fair value hedges $ 9 $ 3 $ 24 Foreign currency hedges (2 ) (8 ) 22 Basis swaps — — (1 ) Other(a) 48 (35 ) 22 Total mark-to-market (gains) losses on derivative    and hedging activities, net $ 55 $ (40 ) $ 67 (a) Primarily derivatives that are used to economically hedge the origination of fixed rate Private Education Loans that don't qualify for hedge accounting. We believe that these derivatives are effective economic hedges, and as such, are a critical element of our interest rate risk management strategy. (3) Other derivative accounting adjustments consist of adjustments related to certain terminated derivatives that did not receive hedge accounting treatment under GAAP but were economic hedges under Core Earnings and, as a result, such gains or losses are amortized into Core Earnings over the life of the hedged item. 39 Cumulative Impact of Derivative Accounting under GAAP compared to Core Earnings As of December 31, 2025, derivative accounting has decreased GAAP equity by approximately $39 million as a result of cumulative net mark-to-market losses (after tax) recognized under GAAP, but not in Core Earnings. The following table rolls forward the cumulative impact to GAAP equity due to these after-tax mark-to-market net gains and losses related to derivative accounting. Years Ended December 31, (Dollars in millions) 2025 2024 2023 Beginning impact of derivative accounting on    GAAP equity $ 8 $ (1 ) $ 122 Net impact of net mark-to-market gains (losses)    under derivative accounting(1) (47 ) 9 (123 ) Ending impact of derivative accounting on    GAAP equity $ (39 ) $ 8 $ (1 ) (1) Net impact of net mark-to-market gains (losses) under derivative accounting is composed of the following: Years Ended December 31, (Dollars in millions) 2025 2024 2023 Total pre-tax net impact of derivative accounting    recognized in net income(2) $ (62 ) $ 33 $ (73 ) Tax and other impacts of derivative accounting    adjustments 16 (8 ) 18 Change in mark-to-market gains (losses) on    derivatives, net of tax recognized in other    comprehensive income (1 ) (16 ) (68 ) Net impact of net mark-to-market gains (losses) under    derivative accounting $ (47 ) $ 9 $ (123 ) (2) See “Core Earnings derivative adjustments” table above. Hedging Embedded Floor Income We use pay-fixed swaps and fixed rate debt to economically hedge embedded Floor Income in our FFELP Loans. Historically, we have used these instruments on a periodic basis and depending upon market conditions and pricing, we may enter into additional hedges in the future. Under GAAP, the pay-fixed swaps are accounted for as cash flow hedges. The table below shows the amount of hedged Floor Income that will be recognized in Core Earnings in future periods based on these hedge strategies. December 31, (Dollars in millions) 2025 2024 2023 Total hedged Floor Income, net of tax(1)(2) $ 27 $ 44 $ 90 (1) $36 million, $57 million and $118 million on a pre-tax basis as of December 31, 2025, 2024 and 2023, respectively. (2) Of the $27 million as of December 31, 2025, approximately $14 million, $7 million and $6 million will be recognized as part of Core Earnings net income in 2026, 2027 and 2028, respectively. (2) Goodwill and Acquired Intangible Assets: Our Core Earnings exclude goodwill and intangible asset impairment and the amortization of acquired intangible assets. The following table summarizes the goodwill and acquired intangible asset adjustments. Years Ended December 31, (Dollars in millions) 2025 2024 2023 Core Earnings goodwill and acquired intangible    asset adjustments $ 3 $ 146 $ 10 40 2. Tangible Equity and Adjusted Tangible Equity Ratio Adjusted Tangible Equity Ratio measures the ratio of Navient’s Tangible Equity to its tangible assets. We adjust this ratio to exclude the assets and equity associated with our FFELP Loan portfolio because FFELP Loans are no longer originated and the FFELP Loan portfolio bears a 3% maximum loss exposure under the terms of the federal guaranty. Management believes that excluding this portfolio from the ratio enhances its usefulness to investors. Management uses this ratio, in addition to other metrics, for analysis and decision making related to capital allocation decisions. The Adjusted Tangible Equity Ratio is calculated as: (Dollars in billions) December 31, 2025 December 31, 2024 Navient Corporation's stockholders' equity $ 2,399 $ 2,641 Less: Goodwill and acquired intangible assets 434 437 Tangible Equity 1,965 2,204 Less: Equity held for FFELP Loans 141 154 Adjusted Tangible Equity $ 1,824 $ 2,050 Divided by: Total assets $ 48,681 $ 51,789 Less: Goodwill and acquired intangible assets 434 437 FFELP Loans 28,141 30,852 Adjusted tangible assets $ 20,106 $ 20,500 Adjusted Tangible Equity Ratio 9.1 % 10.0 % 41 3. Allowance for Loan Losses Excluding Expected Future Recoveries on Previously Fully Charged-off Loans The allowance for loan losses on the Private Education Loan portfolio used for the three credit metrics below excludes the expected future recoveries on previously fully charged-off loans to better reflect the current expected credit losses remaining in connection with the loans on balance sheet that have not charged off. That is, as of December 31, 2025, the $534 million Private Education Loan allowance for loan losses excluding expected future recoveries on previously fully charged-off loans represents the current expected credit losses that remain in connection with the $15,815 million Private Education Loan portfolio. The $170 million of expected future recoveries on previously fully charged-off loans, which is collected over an average 15-year period, mechanically is a reduction to the overall allowance for loan losses. However, it is not related to the $15,815 million Private Education Loan portfolio on our balance sheet and, as a result, management excludes this impact to the allowance to better evaluate and assess our overall credit loss coverage on the Private Education Loan portfolio. We believe this provides a more meaningful and holistic view of the available credit loss coverage on our non-charged-off Private Education Loan portfolio. We believe this information is useful to our investors, lenders and rating agencies. Allowance for Loan Losses Metrics – Private Education Loans For the Year Ended December 31, 2025 2024 2023 (Dollars in millions) Allowance at end of period (GAAP) $ 364 $ 441 $ 617 Plus: expected future recoveries on previously    fully charged-off loans 170 179 226 Allowance at end of period excluding expected    future recoveries on previously fully charged-off    loans (Non-GAAP Financial Measure) $ 534 $ 620 $ 843 Ending total loans $ 15,815 $ 16,157 $ 17,519 Ending loans in repayment $ 15,184 $ 15,363 $ 16,796 Net charge-offs $ 335 $ 335 $ 298 Allowance coverage of charge-offs (annualized): GAAP 1.1 1.3 2.1 Adjustment(1) .5 .5 .7 Non-GAAP Financial Measure(1) 1.6 1.8 2.8 Allowance as a percentage of the ending total    loan balance: GAAP 2.3 % 2.7 % 3.5 % Adjustment(1) 1.1 1.1 1.3 Non-GAAP Financial Measure(1) 3.4 % 3.8 % 4.8 % Allowance as a percentage of the ending loans in    repayment: GAAP 2.4 % 2.9 % 3.7 % Adjustment(1) 1.1 1.2 1.3 Non-GAAP Financial Measure(1) 3.5 % 4.1 % 5.0 % (1) The allowance used for these credit metrics excludes the expected future recoveries on previously fully charged-off loans. See discussion above. 42 Risk Management Our Approach Navient’s identification, understanding and effective management of the risks inherent in our business are critical to our continued success. We assign risk oversight, management and assessment responsibilities at various levels within our organization and continuously coordinate these activities. We maintain comprehensive risk management practices to identify, measure, monitor, evaluate, control and report on our significant risks and we routinely evaluate these practices to determine whether they are functioning properly and can be improved. Risk Management Philosophy Navient’s risk management philosophy is to ensure all significant risks inherent in our business are identified, measured, monitored, evaluated, controlled and reported. In furtherance of these goals, Navient • maintains a comprehensive and uniform risk management framework; • follows a “Three Lines Model” structure based upon: (1) accountability and ownership at the business area level for risks inherent in their activities (first line); (2) supporting areas, such as Human Resources, Legal, Compliance, Finance and Accounting, Information Technology and Information Security, monitor, guide and advise the business areas in their respective areas of expertise (second line); and (3) Internal Audit independently reviews business and support areas to ensure compliance with applicable laws, regulations and internal policies and procedures (third line); • provides appropriate reporting to management and our Board of Directors and their respective committees; and • trains our employees on our risk management processes and philosophy. Risk Oversight, Roles and Responsibilities Responsibility for risk management is assigned at several different levels of our organization, including our Board of Directors and its committees. Each business area within our organization is primarily responsible for managing its specific risks. In addition, our second line support areas are responsible for providing our business areas with the training, systems and specialized expertise necessary to properly perform their risk management responsibilities. Board of Directors. The Navient Board of Directors and its standing committees oversee our strategic direction, including setting our risk management philosophy, tolerance and parameters; and assessing the risks our businesses face as well as our risk management practices. It approves our annual business plan, periodically reviews our strategic approach and priorities and spends significant time considering our capital requirements and our dividend and share repurchase levels and activities. We escalate to our Board of Directors any significant departures from established tolerances and parameters and review new and emerging risks with them. Standing committees of our Board of Directors include Executive, Audit, Compensation and Human Resources, and Nominations and Governance. Charters for each committee providing its specific responsibilities and areas of risk oversight are published on our website together with the names of the directors serving on these committees. Chief Executive Officer. Our Chief Executive Officer is responsible for establishing our risk management culture and ensuring business areas operate within risk parameters and in accordance with our annual business plan. Chief Risk Officer and Chief Compliance Officer. Our Chief Risk Officer and Chief Compliance Officer are responsible for ensuring proper oversight, management and reporting to our Board of Directors and management regarding our risk management practices. Enterprise Risk and Compliance Committee. Our Enterprise Risk and Compliance Committee is an executive management-level committee where senior management reviews our significant risks, receives reports on adherence to established risk parameters, provides direction on mitigation of our risks and closure of issues and supervises our enterprise risk management program. This committee also oversees regulatory compliance risk management activities including regulatory compliance training, regulatory compliance change management, compliance risk assessment, transactional testing and monitoring, customer complaint monitoring, policies and procedures, privacy and information sharing practices, compliance with the Sarbanes-Oxley Act of 2002, and our Code of Business Conduct. Credit and Loan Loss Committee. Our Credit and Loan Loss Committee is an executive management-level committee that oversees our credit and portfolio management monitoring and strategies, the sufficiency of our loan loss reserves, and current or emerging issues affecting delinquency and default trends which may result in adjustments in our allowances for loan losses. This committee also evaluates risks associated with new or modified business and makes recommendations regarding proposed business initiatives based on their inherent risks and controls. 43 Disclosure Committee. Our Disclosure Committee reviews our periodic SEC reporting documents, earnings releases and related disclosure policies and procedures, and evaluates whether modified or additional disclosures are required. Asset and Liability Committee. Our Asset and Liability Committee oversees our investment portfolio and strategy and our compliance with our investment policy. Other Management-Level Committees. We have other management-level committees that oversee various other Navient business activities including critical accounting assumptions, human resources management, and incentive compensation governance. Internal Audit Risk Assessment Navient’s Internal Audit function monitors Navient’s various risk management and compliance efforts, identifies areas that may require increased focus and resources, and reports its findings and recommendations to executive management and the Audit Committee of our Board of Directors. Internal Audit performs an annual risk assessment evaluating the risk of all significant components of our company and uses the results to develop an annual risk-based internal audit plan as well as a multi-year rotational audit schedule. Risk Appetite Framework Navient’s Risk Appetite Framework establishes the level of risk we are willing to accept within each risk category in pursuit of our business strategy. The Audit Committee of our Board of Directors reviews our Risk Appetite Framework annually, helping to ensure consistency in our business decisions, monitoring and reporting. Our management-level Enterprise Risk and Compliance Committee monitors approved risk limits and thresholds to ensure our businesses are operating within approved risk limits. Through ongoing monitoring of risk exposures, management identifies potential risks and develops appropriate responses and mitigation strategies. Risk Categories Our Risk Appetite Framework segments Navient’s risks across nine domains: (1) credit; (2) market; (3) funding and liquidity; (4) operational; (5) compliance; (6) legal; (7) governance; (8) reputational/political; and (9) strategic. Credit Risk. Credit risk is the risk to earnings or capital resulting from an obligor’s failure to meet the terms of any contract with us or otherwise fail to perform as agreed. Navient has credit or counterparty risk exposure with borrowers and cosigners of our Private Education Loans and Private Education Refinance Loans, counterparties with whom we have entered derivative or other similar contracts and entities with whom we make investments. Credit and counterparty risks are overseen by our Chief Risk Officer and our management-level Credit and Loan Loss Committee. The credit risk related to our Private Education Loans and Private Education Refinance Loans is managed within a credit risk infrastructure which includes: (i) a well-defined underwriting, asset quality and collection policy framework; (ii) an ongoing monitoring and review process of portfolio concentration and trends; (iii) assignment and management of credit and loss forecasting authorities and responsibilities; and (iv) establishment of an allowance for loan losses. Credit risk related to derivative contracts is managed by reviewing counterparties for credit strength on an ongoing basis and through our credit policies, which place limits on our exposure with any single counterparty and, in most cases, require collateral to secure the position. Our Chief Risk Officer reports regularly to the Audit Committee of our Board of Directors on credit risk management. Market Risk. Market risk is the risk to earnings or capital resulting from changes in market conditions, such as interest rates, index mismatches, credit spreads, commodity prices or volatilities. Navient is exposed to various types of market risk, including mismatches between the maturity/duration of assets and liabilities, interest rate risk and other risks that arise through the management of our investment, debt and education loan portfolios. Market risk exposure is overseen by our Chief Financial Officer and our management-level Asset and Liability Committee, which are responsible for managing market risks associated with our assets and liabilities and recommending limits to be included in our risk appetite and investment structure. These activities are closely tied to those related to the management of our funding and liquidity risks. Our Board of Directors periodically reviews and approves the investment, asset and liability management policies, establishes and monitors various tolerances or other risk measurements, as well as contingency funding plans developed and administered by our Asset and Liability Committee. Our Chief Financial Officer reports to the Board of Directors on matters of market risk management. Funding and Liquidity Risk. Funding and liquidity risk is the risk to earnings, capital or the conduct of our business arising from the inability to meet our obligations when they become due without incurring unacceptable losses, such as the ability to fund liability maturities or invest in future asset growth and business operations at reasonable market rates. Our primary liquidity risks are any mismatch between the maturity of our assets and liabilities and the servicing of our indebtedness. Navient’s Chief Financial Officer oversees our funding and liquidity management activities and is responsible for planning and executing our funding activities and strategies, analyzing and monitoring our liquidity risk, maintaining excess liquidity and accessing diverse funding sources depending on current market conditions. Funding and liquidity risks are overseen and recommendations approved primarily through our management-level Asset and Liability Committee. Our Board of Directors periodically reviews and approves our funding and liquidity 44 positions and the contingency funding plan developed and administered by our Asset and Liability Committee. The Board of Directors also receives regular reports on our performance against funding and liquidity plans at each of its meetings. Operational Risk. Operational risk is the risk to earnings or the conduct of our business resulting from inadequate or failed internal processes, people or systems or from external events. Operational risk is pervasive, existing in all business areas, functional units, legal entities and geographic locations, and it includes information technology risk, cybersecurity risk, physical security risk on tangible assets, third-party vendor risk, legal risk, compliance risk and reputational risk. Operational risk exposures are managed by business area management and our second and third lines of defense, with oversight by our management-level committees. The Board of Directors receives operations reports at each regularly scheduled meeting. The Board of Directors also receives business development updates regarding our various business initiatives, receives periodic information security and cybersecurity updates and reviews operational and systems-related matters to ensure their implementation produces no significant internal control issues. Compliance, Legal and Governance Risk. Compliance, legal and governance risks are subsets of operational risk but are recognized as a separate and complementary risk category given their importance in our business. Compliance risk is the risk to earnings, capital or reputation arising from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards. Legal risk is the risk to earnings, capital or reputation manifested by claims made through the legal system and may arise from a product or service, a transaction, a business relationship, property (real, personal or intellectual), conduct of an employee or change in law or regulation. Governance risk is the risk of not establishing and maintaining a control environment that aligns with stakeholder and regulatory expectations, including tone at the top and board performance. These risks are inherent in all of our businesses. The Audit Committee of our Board of Directors oversees our monitoring and control of legal and compliance risks. The Audit Committee annually reviews our Compliance Plan and significant breaches of our Code of Business Conduct and receives regular reports from executive management responsible for the regulatory and compliance risk management functions. The Board of Directors and the Audit Committee receive reports on significant litigation and regulatory matters at each regularly scheduled meeting. Reputational/Political Risk. Reputational risk is the risk to earnings or capital arising from damage to our reputation in the view of, or loss of the trust of, customers and the general public. Political risk is the closely related risk to earnings or capital arising from damage to our relationships with governmental entities, regulators and political leaders and candidates. These risks can arise due to both our own acts and omissions (both real and perceived), and the acts and omissions of other industry participants or other third parties, and they are inherent in all of our businesses. Reputational risk and political risk are managed through a combination of business area management and our second and third lines of defense. The Nominations and Governance Committee of our Board of Directors oversees our reputational and political risk. Strategic Risk. Strategic risk is the risk to earnings or capital arising from our potential inability to successfully carry out our strategy. This risk can arise due to both our own acts or omissions, and the acts or omissions of other industry participants or other third parties, and it is inherent in all of our businesses. Strategic risk is managed through a combination of business area management and our second and third lines of defense. Supervision and Regulation Regulatory Oversight We operate in a highly regulated industry where many aspects of our businesses are subject to federal and state regulation and administrative oversight. The following is a summary of the material statutes and regulations currently applicable to us and our subsidiaries. We may become subject to additional laws, rules or regulations in the future. This summary is not a comprehensive analysis of all applicable laws and is qualified by reference to the full text of the statutes and regulations referenced below. The Dodd-Frank Act was adopted to reform and strengthen regulation and supervision of the U.S. financial services industry. It contains comprehensive provisions that govern the practices and oversight of financial institutions and other participants in the financial markets. It imposes additional regulations, requirements and oversight on almost every aspect of the U.S. financial services industry, including increased capital and liquidity requirements, limits on leverage and enhanced supervisory authority. Some of these provisions apply to Navient and its various businesses and securitization vehicles. The CFPB has authority to write regulations under federal consumer financial protection laws and to directly or indirectly enforce those laws and examine financial institutions for compliance. The CFPB is authorized to impose fines and provide consumer restitution in the event of violations, engage in consumer financial education, track consumer complaints, request data and promote the availability of financial services to underserved consumers and communities. It also has authority to prevent unfair, deceptive or abusive practices. The Dodd-Frank Act also authorizes state officials to enforce regulations issued by the CFPB and to enforce the Dodd-Frank Act’s general prohibition against unfair, deceptive and abusive practices. 45 Higher Education Act (HEA). The HEA is the primary law that authorizes and regulates federal student aid programs for higher education. Navient is subject to the HEA and its education loan operations are periodically reviewed by ED and Guarantors or entities acting on their behalf. As a master servicer of federal education loans, Navient, and its designated sub-servicer, are subject to ED regulations regarding financial responsibility and administrative capability that govern all third-party servicers of insured education loans. In connection with its servicing operations on behalf of Guarantor clients, Navient must comply with ED regulations that govern Guarantor activities as well as agreements for reimbursement between ED and our Guarantor clients. While the HEA is required to be reviewed and "reauthorized" by Congress every five years, Congress has not reauthorized the HEA since 2008, choosing to temporarily extend the Act each year since 2013. We cannot predict whether or when legislation will be passed or how it would impact us. While we cannot predict whether or when reauthorization will be passed or how it would impact us, Congress has continued to pass other legislation that amends the HEA. Most recently, the Big Beautiful Bill, enacted in 2025, significantly changes loan programs available, repayment plans, and loan limits. Federal Financial Institutions Examination Council. As a service provider to financial institutions, Navient is subject to periodic examination by the Federal Financial Institutions Examination Council (FFIEC). FFIEC is a formal interagency body of the U.S. government empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Federal Reserve Banks (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration, the Office of the Comptroller of the Currency and the CFPB and to make recommendations to promote uniformity in the supervision of financial institutions. Consumer Protection and Privacy. Navient’s Consumer Lending and Federal Education Loan segments are subject to federal and state consumer protection, privacy and related laws and regulations and are subject to supervision and examination by the CFPB and various state agencies. Some of the more significant federal laws and regulations include: • various laws governing unfair, deceptive or abusive acts or practices; • the Truth In Lending Act and Regulation Z, which govern disclosures of credit terms to consumer borrowers; • the Fair Credit Reporting Act and Regulation V, which govern the use and provision of information to consumer reporting agencies; • the Equal Credit Opportunity Act and Regulation B, which prohibit discrimination on the basis of race, creed or other prohibited factors in extending credit; • the Servicemembers Civil Relief Act (SCRA), which applies to all debts incurred prior to commencement of active military service (including education loans) and limits the amount of interest, including certain fees or charges that are related to the obligation or liability; and • the Telephone Consumer Protection Act (TCPA), which governs communication methods that may be used to contact customers. Regulatory Outlook In 2026, we expect the regulatory environment for the business in which we operate will continue to be challenging. We anticipate that regulators will continue to be focused on conducting regulatory audits and initiating enforcement actions. We anticipate a number of prominent themes could continue: • The number and configuration of regulators, particularly the CFPB, State Attorneys General and various state agencies, are likely to change which may add to the complexity, cost and unpredictability of timing for resolution of particular regulatory issues. • The regulatory, compliance and risk control structures of financial institutions subject to enforcement actions by state and federal regulators are frequently cited, regardless of whether past practices have been changed, and enforcement orders have often included detailed demands for increased compliance, audit and board supervision, as well as the use of third-party consultants to recommend further changes or monitor remediation efforts. • Issues first identified with respect to one consumer product class or distribution channel are sometimes applied to other product classes or channels. We expect that consumer protection regulations, standards, supervision, examination and enforcement practices will continue to evolve in both detail and scope as well as being more unpredictable than in previous periods. This evolution has added and may continue to significantly add to Navient’s compliance, servicing and operating costs. We have invested in compliance through multiple steps including alignment of Navient’s compliance management system to a lending, servicing and collections business model; dedicated compliance resources for certain topics to 46 focus on consumer expectations; formation of business support operations to enhance risk, control and compliance functions in each business area; additional regulatory training for front-line employees to ensure obligations are understood and followed during interactions with customers, as well as additional regulatory training for our Board of Directors to enhance their ability to oversee the Company’s risk framework and compliance as it and the regulatory environment changes; and expanded oversight and analysis of complaint trends to identify and remediate, if necessary, areas of potential consumer harm. Despite these increased activities, our current operations and compliance processes may not satisfy evolving regulatory standards. Past practices or products may continue to be the focus of examinations, inquiries or lawsuits. As a result of our recent strategic announcements, we anticipate the need to further restructure and realign our compliance efforts and focus with our evolving footprint and businesses. As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management,” Navient has implemented a coordinated, formal enterprise risk management system aimed at reducing business and regulatory risks. Listed below are some of the most significant recent and pending regulatory changes that have the potential to affect Navient. Education Loan Servicing and Consumer Lending. The CFPB has been active in the education loan industry and undertook a number of initiatives in recent years relative to the private education loan market and education loan servicing. In addition, several states have enacted various state servicing and licensing requirements. It is possible that more states will propose or pass similar or different requirements on either holders of education loans or their servicers. Depending on the nature of these laws or rules, they may impose additional or different requirements than Navient faces at the federal level. Debt Collection Supervision. The CFPB also maintains supervisory authority over larger consumer debt collectors and in late 2021 implemented changes to Regulation F governing the collection of third-party consumer debt. The CFPB’s rules do not preempt the various and varied levels of state consumer and collection regulations to which the activities of Navient’s subsidiaries are currently subject. Navient also utilizes third-party debt collectors to collect defaulted and charged-off education loans and will continue to be responsible for oversight of their procedures and controls. Oversight of Derivatives. The Dodd-Frank Act created a comprehensive new regulatory framework for derivatives transactions under the Commodity Futures Trading Commission (CFTC), other prudential regulators and the SEC. This framework, among other things, subjects certain swap participants to new capital and margin requirements, recordkeeping and business conduct standards and imposes registration and regulation of swap dealers and major swap participants. Even where Navient or a securitization trust sponsored by Navient qualifies for an exemption, many of its derivatives counterparties are subject to capital, margin and business conduct requirements and therefore Navient’s business may be impacted. Where Navient or the securitization trusts it sponsors do not qualify for an exemption, Navient or an existing or future securitization trust sponsored by Navient may be unable to enter into new swaps to hedge interest rate or currency risk or the costs associated with such swaps may increase. With respect to existing securitization trusts, an inability to amend, novate or otherwise materially modify existing swap contracts could result in a downgrade of its outstanding asset-backed securities. As a result, Navient’s business, ability to access the capital markets for financing and costs may be impacted by these regulations. Legal Proceedings For a discussion of legal matters as of December 31, 2025, please refer to “Note 12 – Commitments, Contingencies and Guarantees” to our consolidated financial statements included in this report, which is incorporated into this item by reference. 47 RISK FACTORS We employ an enterprise risk management philosophy and framework which seeks to identify the material risks impacting our business and provides a process for evaluating and quantifying such risks. Our Enterprise Risk and Compliance Committee monitors approved risk limits and thresholds to ensure our businesses are operating within approved risk parameters. Our Risk Appetite Framework segments our risk across nine risk domains: (1) credit; (2) market; (3) funding and liquidity; (4) operational; (5) compliance; (6) legal; (7) governance; (8) reputational/political; and (9) strategic. The risk factors enumerated in this section are presented in a manner that is consistent with this overall risk framework. Based on current conditions, we believe that the following list identifies the material risk factors that could affect our financial condition, results of operations or cash flows. These risks and risk domains are not the only risks facing our Company. Additional risks not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial conditions or results of operations in future periods. Material risks that could apply generally to any company are listed below under the caption “General Risk Factors.” In addition, our reaction to future developments as well as our competitors’ and regulators’ reactions to these developments may affect our future results. CREDIT RISK. Economic conditions and the creditworthiness of third parties could have a material adverse effect on our business, results of operations, financial condition and stock price. A deterioration in economic conditions, including prolonged periods of economic weakness, instability, or slow growth, could have a material adverse effect on our business, results of operations, financial condition and stock price. During 2025, global markets continued to experience challenges driven by the economic impact of inflation and the “higher for longer” interest rate environment. Changes or volatility in the macroeconomic environment may impact consumer payment patterns, creditworthiness and credit losses. Our success is largely dependent upon the creditworthiness of our customers. Our research consistently indicates that borrower unemployment rates and the failure of in-school borrowers to graduate or otherwise complete their education are two of the most significant economic factors that affect loan performance. Adverse economic and employment conditions, which may result in material changes in graduation or completion rates, could increase delinquencies and defaults. Further, decreases in a borrower’s income or increases in their payment obligations to other lenders, whether as a result of unemployment, rising debt levels, inflation outpacing wage growth, or the limited availability of credit generally, may negatively impact a borrower’s ability to meet their repayment obligations. Additionally, modifications to the original repayment terms in the form of loan forbearance, deferment, grace periods and the use of payment modification programs, including income-based repayment programs, can individually and cumulatively impact the performance of our loan portfolios. Modifications to private loans may lower the potential return on investment and may have the related effect of delaying defaults which would otherwise have become apparent in the performance of our portfolios. Defaults on education loans held by us, particularly Private Education Loans, could adversely affect our earnings. FFELP Loans are insured or guaranteed by state or not-for-profit agencies and are also protected by contractual rights to recovery from the United States pursuant to guaranty agreements among ED and these agencies. These guarantees generally cover at least 97% of a FFELP Loan’s principal and accrued interest upon default and, in limited circumstances, 100% of the loan’s principal and accrued interest. We are exposed to credit risk on the non-guaranteed portion of the FFELP Loans in our portfolio. In addition, under certain circumstances, if we, or any third-party servicer that we utilize to service our loan portfolio, fail to service FFELP Loans in compliance with HEA we may jeopardize the insurance, guarantees and federal support we receive on these loans. A small percentage of our FFELP Loan portfolio has become permanently uninsured as a result of these regulations and we anticipate this will continue to a limited extent in the future. Under such circumstances, we bear the full credit exposure on such previously insured loans. We bear the full credit exposure on the loans in our Private Education Loan portfolio. We believe that delinquencies are an important indicator of the potential future credit performance for Private Education Loans. Our delinquencies as a percentage of Private Education Loans in repayment were 6.3% at December 31, 2025. For a complete discussion of our loan delinquencies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Private Education Loan Portfolio Performance.” Future defaults could be higher than anticipated due to a variety of factors, such as downturns in the economy, public health crises, regulatory changes and other unforeseen future trends. According to Company-sponsored independent research, young adults who stopped attending college before earning a degree or certificate are among those most likely to have trouble making payments. A significant deterioration in economic and employment conditions, which may result in material changes in graduation or completion rates and employment rates for recent college graduates, 48 can have a significant impact on loan delinquency and default rates. For example, the adoption of artificial intelligence and automation technologies by employers that may materially alter employment patterns, job stability, or earnings prospects could negatively impact our borrowers’ ability to secure or maintain employment at income levels sufficient to meet their repayment obligations. Losses on Private Education Loans are also impacted by various risk characteristics that may be specific to individual loans. Loan status (in-school, grace, forbearance, repayment and delinquency), loan seasoning (number of months in which a payment has been made by a customer), underwriting criteria (e.g., credit scores), existence of a cosigner, school type and whether a loan is a TDR are all factors that can impact the likelihood of default. Further, the convergence of exhausted pandemic-era financial buffers, changes in prepayment behavior, and persistent macroeconomic headwinds contributed to delinquency trends and an increase in our provision for loan losses in 2025. If future loan performance is worse than currently estimated, it could materially affect our estimate of the allowance for loan losses and the related provision for loan losses and as a result adversely affect our results of operations. The Company’s accounting for the Allowance for Loan Losses on our education loan portfolios requires significant judgment and estimates. The Company accounts for the allowance for loan losses in connection with its FFELP Loan and Private Education Loan portfolios under ASU No. 2016-13, “Financial Instruments — Credit Losses.” Under this standard, we are required to measure and recognize an allowance for loan losses that estimates remaining expected credit losses for financial assets held at the reporting date. This results in us presenting our loans held for investment, at the net amount expected to be collected. The measurement of expected credit losses over the remaining life of the loan portfolio is based on information about past events, including historical experience, current conditions, and reasonable and supportable economic and other forecasts that affect the collectability of the reported amount. This measurement takes place at the time the financial asset is first added to the balance sheet and quarterly thereafter. Estimating expected losses over the remaining life of the loan portfolios requires significant judgment and estimates. If we are required to materially increase our level of allowance for loan losses, such increase could adversely affect our business, financial condition and results of operations. In addition, the evaluation of our expected credit losses is inherently subjective and requires estimates that may be subject to significant changes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Allowance for Loan Losses” and “Note 2 — Significant Accounting Policies” for further discussion of this standard. Our Consumer Lending segment exposes us to credit underwriting risks based upon the credit model we use to forecast loss rates. If we are unable to effectively forecast loss rates, it could materially adversely affect our operating results. We acquired Earnest, a leading financial technology with a focus on education finance, in 2017. Since then, Earnest has become one of the leading providers of education refinance loans, and in 2019, Earnest entered the “in-school” lending market. In 2025, Earnest expanded its lending platform with the launch of a personal loan product. We underwrite new consumer loans within our Consumer Lending segment based upon our analysis of extensive credit criteria, which may vary by product. Such criteria are designed to assess a borrower’s creditworthiness and ability to repay and may include a combination of quantitative and qualitative factors, such as (i) qualifying credit history, taking into account credit score, (ii) debt to income ratio, and (iii) demonstrated ability to pay through free cash flow calculations. We do not rely on any single factor in making our underwriting decisions. Each of the underwriting criteria is reviewed and weighted depending on the individual borrower’s or co-borrower’s circumstances at the time the underwriting decision is made. If our underwriting process does not effectively forecast our losses, our operating results, cash flow or financial condition may be materially adversely affected. MARKET, FUNDING & LIQUIDITY RISK. Our business is affected by changes in interest rates and the cost and availability of funding in the capital markets. The capital markets may from time-to-time experience periods of significant volatility, such as the volatility we have experienced in recent years due to “higher for longer” interest rates and other economic pressures. This volatility can dramatically and adversely affect financing costs when compared to historical norms or make funding unavailable at any cost. We cannot provide any assurance that the cost and availability of funding in the capital markets will not continue to be impacted by current economic pressures. Other factors that could make financing more expensive or unavailable to us include, but are not limited to, financial losses, events that have an adverse impact on our reputation, changes in the activities of our business partners, events that have an adverse impact on the financial services industry generally, counterparty availability, negative credit rating actions with respect to us, asset-backed securities sponsored by us or the U.S. federal government, changes affecting our assets, the ability of existing or future Navient-sponsored securitization trusts to hedge interest rate and currency risk, corporate and regulatory actions, absolute and comparative interest rate changes, general economic conditions and the legal, regulatory and 49 tax environments governing funding transactions, including existing or future securitization and derivatives transactions. If financing is difficult, expensive or unavailable, our results of operations, cash flow or financial condition could be materially and adversely affected. Further, rising interest rates and expectations of inflation may negatively impact borrower demand for our loan products. Prepayments on our loans can materially impact our profitability, results of operations, financial condition, cash flows or future business prospects. The rate at which borrowers prepay their loans can have a material impact on profitability, results of operations, financial condition, cash flows or future business prospects by affecting our net interest margin, the future cash flows from our loans including loans held by our securitization trusts. Higher or lower prepayments can result from a variety of causes including borrower activity and changes in the education loan market as a result of market conditions, interest rate movements, loan forgiveness or other government sponsored initiatives or programs. FFELP Loans and Private Education Loans may be voluntarily prepaid without penalty by the borrower, refinanced or consolidated with the borrower’s other loans through refinancing or repaid by ED in connection with certain government sponsored programs. Prepayment rates on education loans are subject to a variety of economic, political, competitive and other factors, including changes in our competitors’ business strategies, changes in interest rates, availability of alternative financings (including refinance and consolidations), legislative, executive, policy and regulatory changes affecting the education loan market and the general economy. Refinance products offered by us, our competitors, and the federal government may increase the repayment rate on our FFELP Loans and Private Education Loans. In particular, new interpretations of current laws, rules or regulations or future laws, executive orders or other policy initiatives which operate to encourage or require consolidation, abolish existing or create additional income-based repayment or debt forgiveness programs or establish other policies and programs also may increase or decrease the prepayment rates on education loans. In addition, the timing of the implementation and execution of certain government sponsored programs, like the Borrower Defense Loan Discharge program, may also increase or decrease the prepayment rates on FFELP Loans. For example, during the prior administration, ED introduced various debt relief programs to provide relief to borrowers, which triggered increased consolidation activity. In 2025, consolidation activity declined significantly due to a change in administration, shifting federal education loan policy priorities, and the passage of the Big Beautiful Bill. However, federal student loan policies continue to evolve, which could lead to renewed consolidation activity and affect prepayment rates on our existing education loan portfolio. These changes may materially and adversely impact our profitability, operating results, financial condition, cash flows, and future business prospects. FFELP Loans may also be repaid after default by the Guarantors of FFELP Loans. Conversely, borrowers might not choose to prepay their education loans, or the terms of their education loans may be extended as a result of grace periods, deferment periods, income-driven repayment plans, or other repayment terms or monthly payment amount modifications agreed to by the servicer, for example. FFELP Loan borrowers may be eligible for various existing income-based repayment programs under which borrowers can qualify for reduced or zero monthly payment or even debt forgiveness after a certain number of years of repayment. Prolonged introductions of significant amounts of subsidized funding at below market interest rates — whether from federal or private sources — could increase the prepayment rates of our existing Private Education Loans and have a material adverse effect on our profitability, results of operations, financial condition, cash flows or future business prospects. With respect to our securitization trusts when, as a result of unanticipated prepayment levels, education loans within a securitization trust amortize faster than originally contracted, the trust’s pool balance may decline at a rate faster than the prepayment rate assumed when the trust’s bonds were originally issued. If the trust’s pool balance declines faster than originally anticipated, in most of our securitization structures, the bonds issued by that trust will also be repaid faster than originally anticipated. In such cases, our net interest income may decrease and our future cash flows from the trust may similarly decline. Conversely, when education loans within a securitization trust amortize more slowly than originally contracted, the trust’s pool balance may decline more slowly than the prepayment rate assumed when the trust’s bonds were originally issued, and the bonds may be repaid more slowly than originally anticipated. In these cases, our net interest income increases and our future cash flows from the trust may increase. It is also possible, if the prepayment rate is especially slow and certain rights of the sellers or the servicer are not exercised or are insufficient or other action is not taken to counter the slower prepayment rate, the trust’s bonds may not be repaid by their legal final maturity date(s), which could result in an event of default under the underlying securitization agreements. 50 Our ability to hedge Floor Income and our ability to enter into hedges relative to that Floor Income is dependent on the future interest rate environment and therefore is variable, which may adversely affect our earnings. FFELP Loans disbursed before April 1, 2006 generally earn interest at the higher of either the borrower rate, which is fixed over a period of time, or a floating rate based on a Special Allowance Payment or SAP formula set by ED. We have generally financed our FFELP Loans with floating rate debt whose interest is matched closely to the floating nature of the applicable SAP formula. Historically, these loans have been indexed to either the Treasury bill, commercial paper or one-month LIBOR rates. The SAP formula, which was indexed to one-month LIBOR prior to the transition away from LIBOR, transitioned to 30-day Average SOFR after June 30, 2023. If a decline in interest rates causes the borrower rate to exceed the SAP formula rate, we will continue to earn interest on the loan at the fixed borrower rate while the floating rate interest on our debt will continue to decline. The additional spread earned between the fixed borrower rate and the SAP formula rate is referred to as “Floor Income.” Depending on the type of FFELP Loan and when it was originated, the borrower rate is either fixed to term or is reset to a market rate on July 1 of each year. For loans where the borrower rate is fixed to term, we may earn Floor Income for an extended period of time; for those loans where the borrower interest rate is reset annually on July 1, we may earn Floor Income to the next reset date. In accordance with legislation enacted in 2006, holders of FFELP Loans are required to rebate Floor Income to ED for all FFELP Loans disbursed on or after April 1, 2006. Floor Income can be volatile as market rates and the rates on the underlying education loans move up and down. Subject to prevailing market conditions, we have historically hedged this risk by using derivatives in an effort to lock in a portion of our Floor Income over the term of the contract. A rise in interest rates will reduce the amount of Floor Income received on the FFELP Loans not presently hedged with derivatives, which will compress our net interest margins. Further, our ability to hedge Floor Income and our ability to enter into hedges relative to that Floor Income is dependent on the future interest rate environment and therefore is variable, which may adversely affect our earnings. Additionally, net interest margins can be negatively impacted by unusual variances between 30-day and 90-day Average SOFR. Our credit ratings are important to our liquidity. A reduction in our credit ratings could adversely affect our liquidity, increase our borrowing costs or limit our access to the capital markets. As of December 31, 2025, Moody’s, S&P and Fitch rated our long-term unsecured debt below investment grade. In addition, the capital markets for sub-investment grade companies are not as liquid as those involving investment grade entities. These factors have resulted in a higher cost of funds for us and have caused our senior unsecured debt to trade with greater volatility. Our unsecured debt totaled $5.3 billion at December 31, 2025. We utilize the unsecured debt markets to help fund our business and refinance outstanding debt. The amount, type and cost of this funding directly affect the cost of operating our business and growing our assets and are dependent upon outside factors, including our credit rating from rating agencies. There can be no assurance that our credit ratings will not be reduced further. A reduction in the credit ratings of our senior unsecured debt could adversely affect our liquidity, increase our borrowing costs, limit our access to the capital markets and place incremental pressure on net interest income. Adverse market conditions or an inability to effectively manage our liquidity risk or access liquidity could negatively impact our ability to meet our liquidity and funding needs, which could materially and adversely impact our results of operations, cash flow or financial condition. We must effectively manage our liquidity risk. We require liquidity and the ability to access funds held at banks and other financial institutions to meet cash requirements such as day-to-day operating expenses, origination of loans, required payments of principal and interest on borrowings, and distributions to shareholders. We expect to fund our ongoing liquidity needs, including the repayment of $5.3 billion of senior unsecured notes that mature in 2026 to 2043, primarily through our current cash, investments and unencumbered FFELP Loan and Private Education Refinance Loan portfolios, the predictable operating cash flows provided by operating activities, the repayment of principal on unencumbered education loan assets, and the distribution of overcollateralization from our securitization trusts. We may also, depending on market conditions and availability, draw down on our secured FFELP Loan and Private Education Loan facilities, issue term ABS, enter into additional Private Education Loan ABS repurchase facilities, or issue additional unsecured debt. We may maintain too much liquidity, which can be costly, or may be too illiquid or may be unable to access funds held at banks and other financial institutions due to such banks or financial institutions entering receivership or becoming insolvent, which could result in financial distress during times of financial stress or capital market disruptions. 51 The interest rate characteristics of our earning assets do not always match the interest rate characteristics of our funding arrangements, which may have a negative impact on our net interest income and net income. Net interest income is the primary source of cash flow generated by our portfolios of FFELP Loans and Private Education Loans. Following the cessation of USD LIBOR on June 30, 2023, interest earned on FFELP Loans and variable rate Private Education Loans is primarily indexed to one-month Term SOFR, 30-day Average SOFR or Prime Rate, and interest earned on variable rate Private Education Loans originated in December 2021 or thereafter is indexed to 30-day Average SOFR. In contrast, certain of our debt is indexed to rates other than one-month Term SOFR, 30-day Average SOFR or Prime Rate, or if indexed to one-month Term SOFR or 30-day Average SOFR, it has a different repricing frequency. The different interest rate characteristics of our loan portfolios and the liabilities funding these loan portfolios result in basis risk and repricing risk. It is not economically feasible to hedge all of our exposure to such risks. While the asset and hedge indices are short-term with rate movements that are typically highly correlated, there can be no assurance that the historically high correlation will not be disrupted by capital market dislocations or other factors not within our control. There have been situations in the past in which we experienced widening spreads between one-month and three-month LIBOR and the cost of hedging this variance was prohibitive, which we may also experience with different SOFR-based indices. We cannot provide any assurance that such a situation will not occur and if it did occur, it would potentially reduce our net interest margins and net income. In these circumstances, our earnings could be materially adversely affected. Our use of derivatives to manage interest rate and foreign currency sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings and liquidity. We strive to maintain an overall strategy that uses derivatives to minimize the economic effect of interest rate and/or foreign currency changes. However, developing an effective strategy for dealing with these movements is complex, and no strategy can completely avoid the risks associated with these fluctuations. For example, our education loan portfolio is subject to prepayment risk that could result in being under- or over-hedged, which could result in material losses. As a result, there can be no assurance that hedging activities using derivatives will effectively manage our interest rate or foreign currency sensitivity, have the desired beneficial impact on our results of operations or financial condition or not adversely impact our liquidity. Our use of derivatives also exposes us to market risk and credit risk. Market risk is the chance of financial loss resulting from changes in interest rates, foreign exchange rates and market liquidity. Our Floor Income Contracts and basis swaps we use to manage earnings variability caused by different reset characteristics on interest-earning assets and interest-bearing liabilities do not qualify for hedge accounting treatment. Therefore, the change in fair value, called the “mark-to-market,” of these derivative instruments is included in our statement of income without a corresponding mark-to-market of the economically hedged item. A decline in the fair value of these derivatives could have a material adverse effect on our reported earnings. In addition, a change in the mark-to-market value of these instruments may cause us to have to post more collateral to our counterparty or to a clearing house. If these values change significantly, the increased collateral posting requirement could have a material adverse impact on our liquidity. Credit risk is the risk that a counterparty, for a period of time or indefinitely, will not perform its obligations under a contract or is not permitted to perform its obligations under a contract due to the counterparty entering receivership or becoming insolvent. Credit risk is limited to the loss of the fair value gain in a derivative that the counterparty or clearinghouse owes or will owe in the future to us. If a counterparty or clearinghouse fails to perform its obligations, we could, depending on the type of counterparty arrangement, experience a loss of liquidity or an economic loss. In addition, we might not be able to cost effectively replace the derivative position depending on the type of derivative and the current economic environment. Our securitization trusts, which we consolidate on our balance sheet, had $1.2 billion of Euro denominated bonds outstanding as of December 31, 2025. To convert these non-U.S. dollar denominated bonds into U.S. dollar liabilities, the trusts have entered into foreign-currency swaps with highly rated counterparties. A failure by a swap counterparty to perform its obligations could, if the swap has a positive fair value to us and was not adequately collateralized, materially and adversely affect our earnings. OPERATIONAL RISKS. If we do not effectively and continually align our cost structure with our business operations, our results of operations and financial condition could be materially adversely affected. We continually strive to align our cost structure with our business operations. The ability to properly size our cost structure is dependent upon a number of variables, including our ability to successfully execute on our business plans, growth or strategic initiatives and future legislative or regulatory changes. On January 30, 2024, as a result of an in-depth review of our business, we announced three strategic actions to simplify our company, reduce our expense base, and enhance our flexibility. See “Business — Recent Business Developments” for more information on our strategic actions. We have made substantial progress on these strategic actions to date, including the 52 adoption of a variable, outsourced servicing model in July 2024 and the divestments of our healthcare services business in September 2024 and our government services business in February 2025 as well as the completion of the transition services related to each of these transactions in 2025, but could fail to fully realize the anticipated benefits from these strategic actions or the benefits may take longer to realize than expected. Further, we may fail to implement, or be unable to achieve, necessary cost savings commensurate with our business and prospects. If we undertake cost reductions based on our business plan or the implementation of our strategic actions, those reductions, if not undertaken properly, could cause disruptions in our business, reductions in the quality of the services we provide or even cause us to fail to comply with applicable regulatory standards. In each case, our business, results of operations and financial condition could be adversely affected. A failure of our operating systems or infrastructure could disrupt our business, cause significant losses, result in regulatory action or damage our reputation. A failure of our operating systems or infrastructure could disrupt our business. Our business is dependent on the ability to process and monitor large numbers of daily transactions in compliance with contractual, legal and regulatory standards and our own product specifications, both currently and in the future. In May 2024, we entered into an outsourcing agreement that transitioned our student loan servicing to MOHELA, a leading provider of student loan servicing for government and commercial enterprises. We, however, maintain certain technology solutions for our other lines of business. As our processing demands change, both in volume and in terms and conditions, our ability to develop and maintain our operating systems and infrastructure may become increasingly challenging. There is no assurance that we have adequately or efficiently developed, maintained, acquired or scaled such systems and infrastructure or will do so in the future. The servicing, financial, accounting, data processing and other operating systems and facilities that support our business may fail to operate properly or become disabled as a result of events that are beyond our control, adversely affecting our ability to timely process transactions. For example, we or our third-party service providers may in the future incorporate artificial intelligence technology in certain operations, processes or services. Artificial intelligence models are complex and may produce inaccurate, inadequate or otherwise harmful outputs that are not easily detectable. Any such failure could adversely affect our ability to service our clients and result in financial loss or liability to our clients, disrupt our business, and result in regulatory action or cause reputational damage. Despite the plans and facilities we have in place, our ability to conduct business may be adversely affected by a prolonged disruption in the infrastructure that supports our business. This may include a disruption involving electrical, communications, Internet, artificial intelligence, transportation or other services used by us or third parties with which we conduct business. We depend on secure information technology, and a breach of our information technology systems could result in significant losses, disclosure of confidential customer information and reputational damage, which would adversely affect our business. Our operations rely on the secure processing, storage and transmission of personal, confidential and other information in our computer systems and networks. Although we take protective measures we deem reasonable and appropriate, like other financial services companies, our computer systems, software and networks are at risk for unauthorized access, computer viruses, malicious attacks, ransomware attacks and other cybersecurity events that could have a security impact beyond our control. These technologies, systems and networks, and those of third parties, have been, and may continue to be, the target of cyber-attacks that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our customers’ confidential, proprietary and other information, the loss of access to our systems and networks or those of third parties we rely upon or otherwise disrupt our business operations or those of our customers or other third parties. Information security risks for institutions that handle large numbers of financial transactions on a daily basis such as Navient have increased in recent years, in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists, activists and other external parties. In addition, our increased use of mobile and cloud technologies could heighten these and other operational risks. We successfully transitioned from an on-premises information technology operations to a cloud-first architecture in 2025. This transition heightens certain operational risks such as those related to information security and cybersecurity attacks. While most cloud environments offer robust and greater security measures, if configured correctly, they are still at risk for cybersecurity attacks and breaches. Any failure by our service providers, including our mobile or cloud technology service providers or MOHELA, as the servicer of our student loan portfolios, to adequately safeguard their systems and prevent cyber-attacks could disrupt our operations or those of third parties we rely upon and result in interruptions of services or loss of access or misappropriation, corruption or loss of confidential or propriety information. Moreover, the loss of confidential customer identification information could harm our reputation, result in the termination of contracts by our existing customers and subject us to liability under state, federal and international laws that protect confidential personal data, resulting in increased costs, loss of revenues and substantial penalties. If one or more of such events occur, personal, confidential and other information processed and stored in, and transmitted through, our computer systems and networks could be jeopardized or could cause interruptions or 53 malfunctions in our operations that could result in significant losses or reputational damage. We routinely transmit and receive personal, confidential and proprietary information, some of it through third parties. We maintain secure transmission capability and work to ensure that third parties follow similar procedures. Nevertheless, an interception, misuse or mishandling of personal, confidential or proprietary information being sent to or received from a customer or third party could result in legal liability, regulatory action and reputational harm. In the event personal, confidential or other information is jeopardized, intercepted, misused or mishandled, or our systems or those of third parties we rely upon suffer interruptions in service or loss of access, we may need to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to fines, penalties, litigation and settlement costs and financial losses that may not be insured or may not be fully covered through insurance. If one or more of such events occur, our business, financial condition or results of operations could be significantly and adversely affected. We depend on third parties for a wide array of services, systems and information technology applications, and a breach or violation of law by one of these third parties could disrupt our business or provide our competitors with an opportunity to enhance their position at our expense. We depend on third parties for a wide array of services, systems and information technology applications. Third-party vendors are significantly involved in many aspects of our software and systems development, servicing systems, the timely transmission of information across our data communication network, and for other telecommunications, processing, remittance and technology-related services in connection with our servicing or payment services businesses. In addition to technology applications, we also utilize various third-party service providers across our business, including in connection with our loan originations and servicing and in the collection of defaulted Private Education Loans and in other areas. In May 2024, we entered into an outsourcing agreement that transitioned our student loan servicing to MOHELA. See “Business — Recent Business Developments” for more information regarding this outsourcing transaction. Additionally, we transitioned from an on-premises information technology operations to a cloud-first architecture in 2025. Cloud service providers have experienced, and may continue to experience, outages and disruptions that could impact business operations. Additionally, the transition to a cloud-first architecture required significant changes in information technology management and operations, which could lead to temporary inefficiencies and increased resources and operational costs as the Company continues to adapt to a new environment. If a service provider fails to provide the services required or expected, or fails to meet applicable contractual or regulatory requirements such as service levels or compliance with applicable laws, the failure could negatively impact our business by adversely affecting, for example, the processing of customers’ transactions in a timely and accurate manner, otherwise hampering our ability to serve our customers, or subjecting us to litigation and regulatory risk for matters as diverse as poor vendor oversight or improper release or protection of personal information. Such a failure could also adversely affect the perception of the reliability of our networks and services and the quality of our brands, which could materially adversely affect our business and results of operations. Our business could be negatively impacted as a result of shareholder activism, including a proxy contest or an unsolicited takeover proposal. We have been and may continue to be the subject of actions taken by activist shareholders. While we strive to maintain constructive, ongoing communications with all of our shareholders, and welcome their views and opinions with the goal of enhancing value for all shareholders, we may be subject to actions or proposals from activist shareholders that may not align with our business strategies or the interests of our other shareholders. Responding to such actions may be costly and time-consuming, disrupt our business and operations, or divert the attention of our Board of Directors, management, and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan. Even if we are successful in a proxy contest or in defending against any unsolicited takeover attempt, our business could be adversely affected by any such proxy contest or unsolicited takeover attempt because: • perceived uncertainties as to future direction may result in the loss of potential acquisitions, collaborations or other strategic opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; • if individuals are elected or appointed to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plan and create additional value for our shareholders; and • if individuals are elected or appointed to our Board of Directors who do not agree with our strategic plan, the ability of our Board of Directors to function effectively could be adversely affected, which could in turn adversely affect our business, operating results and financial condition. Uncertainties related to, or the results of, such actions could cause our stock price to experience periods of volatility. The occurrence of any of the foregoing events could materially adversely affect our business. 54 We cannot predict, and no assurances can be given, as to the outcome or timing of any matters relating to the foregoing actions by shareholders or the ultimate impact on our business, liquidity, financial condition or results of operations, and any of these matters or any further actions by this or other shareholders may impact and result in volatility or stagnation of the price of our stock. REGULATORY, COMPLIANCE & LEGAL RISK. Our businesses are subject to a wide variety of laws, rules, regulations and government policies that may change in significant ways, and changes to such laws and regulations or changes in existing regulatory guidance or their interpretation or enforcement could materially adversely impact our business and results of operations. Our businesses are subject to a wide variety of U.S. federal and state and non-U.S. laws, rules, regulations and policies. There can be no assurance that these laws, rules, regulations and policies will not be changed in ways that will require us to modify our business models or objectives or in ways that affect our returns on investment by restricting existing activities or services, change how our companies operate or the characteristics of our assets, subjecting them to escalating costs or new or increased taxes or prohibiting them outright. The CFPB has authority with respect to several aspects of our business. It has authority to write regulations under federal consumer financial protection laws and to directly or indirectly enforce those laws and examine us for compliance. The CFPB also has examination and enforcement authority with respect to various federal consumer financial laws for some providers of consumer financial products and services, including us. New rules, if implemented, could have a material effect on our consumer lending or other businesses and may result in significant capital expenditures to develop systems that enable us to comply with the new regulations. The CFPB is authorized to impose monetary penalties, collect fines and provide consumer restitution in the event of violations, engage in consumer financial education, track consumer complaints, request data and promote the availability of financial services to underserved consumers and communities. The CFPB has authority to bring an action to prevent unfair, deceptive or abusive acts or practices and to ensure that all consumers have access to fair, transparent and competitive markets for consumer financial products and services. We anticipate that the review of products and practices to prevent unfair, deceptive or abusive conduct could be a continuing focus of the CFPB, and the CFPB has recently identified as an area of focus private student loan servicers’ treatment of borrowers who allege misconduct by the schools they attended. The CFPB’s scrutiny has resulted in, and could continue to result in, changes to pricing, practices, products and procedures. It has also resulted in, and could continue to result in, increased costs related to regulatory oversight, supervision and examination, including increases to provisions for loan losses due to changing regulatory expectations related to school misconduct discharges on certain populations of private student loans, as well as additional remediation efforts and possible penalties. In addition, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations implemented under Title X of the Dodd-Frank Act, the Dodd-Frank Act empowers State Attorneys General and state regulators, under certain circumstances to bring civil actions to remedy violations of state law. Any action by the CFPB or one or more State Attorneys General could have a material adverse effect on us or our business. In September 2024, we entered into a settlement agreement with the CFPB to resolve all matters in dispute with respect to a civil action filed by the CFPB in January 2017. A description of the CFPB settlement is included in "Note 12 – Commitments, Contingencies and Guarantees." Our FFELP Loans are subject to the HEA and related laws, rules, regulations and policies. Our servicing processes and procedures are designed and monitored to comply with the HEA, related regulations and program guidance; however, ED could determine that we are not in compliance for a variety of reasons, including that we or our third-party servicing provider misinterpreted ED guidance or incorrectly applied the HEA and its related laws, rules, regulations and policies. Failure to comply could result in fines, the loss of the insurance and related federal guarantees on affected FFELP Loans, expenses required to cure servicing deficiencies, suspension or termination of our right to participate as a FFELP servicer, negative publicity and potential legal claims. The imposition of significant fines, the loss of the insurance and related federal guarantees on a material number of FFELP Loans, the incurrence of additional expenses and/or the loss of our ability to participate as a FFELP servicer could individually or in the aggregate have a material, negative impact on our business, financial condition or results of operations. Our businesses are also subject to regulation and oversight by various state and federal agencies, particularly in the area of consumer protection, and are subject to numerous state and federal laws and regulations. Several states have passed or proposed student loan servicing rules or legislation and several others have imposed license or other requirements. Imposition of new laws, rules or regulations or the failure to comply with these laws and regulations may result in significant costs, including litigation costs, and/or business sanctions including but not limited to termination or non-renewal of contracts. In addition, we receive payments from the federal government on our FFELP Loan portfolio. These payments may be affected by various factors, including if in the future, the administration and Congress engage in a prolonged debate linking the federal deficit, debt ceiling and other budget issues. If U.S. lawmakers in the future fail to reach agreement on these issues, the federal government could stop or delay payment on its obligations, including those related to the 55 FFELP Loan portfolio that Navient owns. Further, legislation to address the federal deficit and spending could impose proposals that would adversely affect the FFELP-related servicing business. A protracted reduction, suspension or cancellation of the demand for FFELP-related services could have a material adverse effect on our revenues, cash flows, profitability and business outlook, and, as a result, could materially adversely affect its business, financial condition and results of operations. We cannot predict how or what programs or policies will be impacted by any actions that the Administration, Congress or the federal government may take. Expanded regulatory and governmental oversight of our businesses will increase our costs and risks. We are now, and may in the future be, subject to inquiries and audits from state and federal regulators as well as litigation from private plaintiffs. In recent years, we have entered into consent orders and other settlements. We have provided monetary and other relief in connection with the resolution of some of these actions and settlements. We have also enhanced our procedures and controls, expanded the risk and control functions within each line of business, and invested in technology. If our risk and control procedures and processes fail to meet the heightened expectations of our regulators and other government agencies, we could be required to enter into further orders and settlements, provide additional monetary relief, or accept material regulatory restrictions on our businesses, which could adversely affect our operations and, in turn, our financial results. We expect regulatory scrutiny and governmental investigations and enforcement actions to continue for us and for the financial services industry as a whole. Such actions can have significant consequences for a financial services company such as ours, including loss of customers and business and the inability to operate certain businesses. Due to the uncertainty engendered by these new regulations, legislation, guidance and actions, coupled with the likelihood of additional changes or additions to the local, state and federal statutes, regulations and practices applicable to our business, we are not able to estimate the ultimate impact of changes in law on our financial results, business operations or strategies. We believe that the cost of responding to and complying with these evolving laws and regulations, as well as any guidance from enforcement actions, will continue to increase, as will the risk of penalties and fines from any enforcement actions that may be imposed on our businesses. Our profitability, results of operations, financial condition, cash flows or future business prospects could be materially and adversely affected as a result. GOVERNANCE RISK. Certain provisions of Delaware law and our amended and restated certificate of incorporation and amended and restated by-laws may prevent or delay an acquisition of us, which could decrease the trading price of our common stock. Certain provisions of Delaware law and of our amended and restated certificate of incorporation and third amended and restated by-laws are intended to deter coercive takeover practices and inadequate takeover bids by, among other things, encouraging prospective acquirers to negotiate directly with our Board of Directors rather than to attempt a hostile takeover. These provisions include, among others: • limitations on the ability of our shareholders to call a special meeting such that shareholder-requested special meetings will only be called upon the request of the holders of at least one-third of our capital stock issued and outstanding and entitled to vote at an election of directors; • rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings; • the right of our Board of Directors to issue one or more series of preferred stock without shareholder approval; • the inability of our shareholders to fill vacancies on our Board of Directors; • the requirement that the affirmative vote of the holders of at least 75% in voting power of our stock entitled to vote thereon is required for shareholders to amend our amended and restated by-laws; and • the inability of our shareholders to cumulate their votes in the election of directors. We are also subject to Section 203 of the Delaware General Corporation Law. Section 203 generally provides that, with limited exceptions, persons who acquire, or are affiliated with a person that acquires, 15% or more of the outstanding voting stock of a Delaware corporation shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the time at which that person or its affiliates becomes the holder of 15% or more of the corporation’s outstanding voting stock. Being subject to Section 203 could cause a delay in or completely prevent a change of control that shareholders may favor. 56 We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of us and our shareholders. Shareholders’ percentage ownership in Navient may be diluted in the future. In the future, shareholders’ percentage ownership in Navient may be diluted as a result of equity issuances for acquisitions, capital market transactions or otherwise, including future equity awards that we may grant to our directors, officers and employees. If made, these awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of shares of our common stock. In addition, our amended and restated certificate of incorporation permits us to issue, without the approval of our shareholders, one or more series of preferred stock. Our Board of Directors generally may determine the rights of preferred shareholders including their powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock with respect to dividends and distributions. If our Board were to approve the issuance of preferred stock in the future, the terms of one or more series of such preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant the holders of preferred stock the right to elect some number of our directors in all circumstances or upon the happening of specified events, or the right to veto specified transactions. Similarly, we could grant the preferred shareholders certain repurchase or redemption rights or liquidation preferences that could affect the value of the common stock. Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our shareholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the General Corporation Law of the State of Delaware (DGCL) or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. By becoming a shareholder in our company, holders of our common stock will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our amended and restated certificate of incorporation may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. REPUTATIONAL/POLITICAL RISK. Reputational risk and social factors may impact our results and damage our brand. Negative public opinion or damage to our brand could occur as a result of actual or alleged conduct in any number of activities or circumstances, including lending practices, regulatory compliance, security breaches (including the use and protection of customer information), corporate governance, and sales and marketing, and from actions taken by regulators or other persons. Such conduct could fall short of our customers’ and the public’s heightened expectations of companies of our size with rigorous data, privacy and compliance practices, and could further harm our reputation. In addition, third parties with whom we have important relationships may take actions over which we have limited control that could negatively impact perceptions about us or the financial services industry. The proliferation of social media may increase the likelihood that negative public opinion from any of the events discussed above will impact our reputation and business. STRATEGIC RISK. Net income on our existing FFELP Loan portfolio is declining over time. We may not be able to develop revenue streams to replace the declining revenue from FFELP Loans through increased private credit originations. In 2010, Congress passed legislation ending the origination of education loans under the FFELP program. Since then, all federal education loans have been originated through the Direct Student Loan Program (DSLP) of the ED. While the 2010 law did not alter or affect the terms and conditions of existing FFELP Loans, it significantly impacted the education loan industry. As a result of this legislation, net income on our FFELP Loan portfolio is declining, and is anticipated to continue to decline, over time as those existing FFELP Loans are paid down, refinanced or repaid after default. Additionally, our ability to grow is significantly dependent upon our ability to originate new in-school and refinance loans. Our full-year performance in 2025 reflected our ability to achieve high-quality loan growth; however, such performance may not be indicative of future results. Changes in interest rates, macroeconomic conditions or borrower 57 behavior may give rise to risks that are difficult to predict and may negatively impact our future student loan origination volume. Our profitability, results of operations, financial condition, cash flows or future business prospects could be materially and adversely affected as a result. Acquisitions, new products, strategic investments or divestitures that we pursue may not be successful and could harm our business and financial condition. Our growth strategy has included making opportunistic acquisitions of, or material investments in, loan portfolios and complementary businesses and products, as well as offering new products, such as the personal loan product launched by Earnest in 2025. All acquisitions of companies, operations or loan portfolios as well as the offering of new products, involve financial and operational risks. There may be additional risks if we enter into a line of business or launch a new product in which we have limited experience or which operates in a legal, regulatory or competitive environment with which we are not familiar. The expected benefits of acquisitions and investments also may not be realized for various reasons, including the loss of key personnel, customers or vendors. If we fail to integrate or realize the expected benefits of our acquisitions or investments, we may lose the return on these acquisitions or investments or incur additional transaction costs, and our business and financial condition may be harmed as a result. Our strategy also includes, and may continue to include, divestments of certain brands or businesses, such as the sale of our healthcare services business in September 2024 and our government services business in February 2025. If we are unable to complete divestitures or successfully transition divested businesses, including the effective management of the related separation and stranded overhead costs, transition services, and the maintenance of relationships with customers and other business partners, our business, financial condition or results of operations could be negatively impacted. Even if such transactions are completed, the anticipated growth and other strategic objectives of such transactions may not be fully realized or may take longer to realize than expected, which may adversely affect any anticipated benefits from such transactions. GENERAL RISK FACTORS. Our framework for managing risks may not be effective in mitigating the risk of loss. Our enterprise risk management framework seeks to mitigate risk and appropriately balance risk and returns. We have established processes and procedures intended to identify, measure, monitor, control and report the types of risk to which we are subject. We seek to monitor and control risk exposure through a framework of policies, procedures, limits and reporting requirements. Management of risks in some cases depends upon the use of analytical and forecasting models. If the models we use to mitigate these risks are inadequate, we may incur increased losses. In addition, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated. If our risk management framework does not effectively identify or mitigate risks, we could suffer unexpected losses, and our results of operations, cash flow or financial condition could be materially adversely affected. We are subject to various legal proceedings and some of these legal proceedings or other contingencies may materially adversely affect our business, financial condition or results from operations. We are subject to a variety of legal proceedings in virtually every part of our business (see "Note 12 — Commitments, Contingencies and Guarantees"). While we believe we have adopted appropriate legal and risk management and compliance programs, the diverse nature of our current and former operations, including operations of business we have recently acquired or exited, means that legal and compliance risks will continue to exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, will arise from time to time. Some of these legal proceedings or other contingencies may materially adversely affect our business, financial condition or results from operations. Incorrect estimates and assumptions by management in connection with the preparation of our consolidated financial statements could adversely affect our reported assets, liabilities, income, revenue or expenses. The preparation of our consolidated financial statements requires management to make critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, income, revenue or expenses during the reporting periods. Incorrect estimates and assumptions by management could adversely affect our reported amounts of assets, liabilities, income, revenue and expenses during the reporting periods. If we make incorrect assumptions or estimates, our reported financial results may be over or understated, which could materially and adversely affect our business, financial condition and results of operations. If we are unable to attract and retain professionals with strong leadership skills, our business, results of operations and financial condition may be materially adversely affected. Our success is dependent, in large part, on our ability to attract and retain personnel with the knowledge and skills to lead our business. Experienced personnel in our industry are in high demand, and competition for talent is very high. 58 We must hire, retain and motivate appropriate numbers of talented people with diverse skills in order to serve our clients, respond quickly to rapid and ongoing technology, industry and macroeconomic developments, and grow and manage our business. As our business evolves, we must also hire and retain an increasing number of professionals with different skills and professional expectations than those of the professionals we have historically hired and retained. If we are unable to successfully integrate, motivate and retain these professionals, our ability to continue to secure work in those industries and for our services and solutions may suffer. Our businesses operate in competitive environments and could lose market share and revenues if competitors compete more aggressively or effectively. We compete with for-profit and not-for-profit student lending businesses, many with strong records of performance. We compete based on price, effectiveness and customer service metrics. To the extent our competitors compete aggressively or more effectively than us, we could lose market share to them or our service offerings may not prove to be profitable. Our business and financial condition may be harmed as a result. CYBERSECURITY Risk Management and Strategy Navient is dedicated to helping our clients and customers keep their information secure. Recognizing the evolving threats facing all companies, Navient maintains a comprehensive corporate information security program (the CISP) that utilizes a defense-in-depth strategy to protect Navient’s resources, infrastructure, assets and most importantly, our customer data and information. The CISP is an integral component of Navient’s overall risk management program and follows the same risk management philosophy and framework described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management.” The integration of our corporate information security program into our broader risk management program is designed so that cybersecurity risks and considerations are a critical part of Navient’s overall risk management and decision-making processes. Due to the Company’s history as a contractor to the federal government, the security controls defined in the National Institute of Standards and Technology (NIST) Special Publication 800-53 are the foundation of our security practices. Even though we no longer perform federal work, NIST SP 800-53 continues to serve as a useful benchmark. Our posture is also heavily influenced by the Payment Card Industry Data Security Standard (PCI DSS) and the System and Organization Controls (SOC) 1 and SOC 2 standards of the American Institute of Certified Public Accountants (AICPA) Statement on Standards for Attestation Engagements (SSAE). The overall objective of the Navient CISP is to establish effective enterprise-wide policies, standards, programs, procedures and strategies that address the security of Navient’s computer resources, infrastructure, data and information assets. The CISP includes administrative, technical, and physical safeguards designed to achieve certain objectives, including ensuring the security, confidentiality, integrity and availability of information; protecting against any reasonably anticipated threats or hazards to the security or integrity of such information; protecting against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer or individual, or to Navient; providing reasonable assurance that business objectives will be achieved and security incidents will be prevented or detected, contained and corrected; and complying with legal, statutory, contractual and internally developed requirements. As part of the policies and standards established by the CISP, Navient conducts security awareness training for employees upon hire and annually thereafter and maintains cyber insurance coverage to mitigate certain risks associated with cybersecurity incidents. As part of the CISP, Navient has developed and implemented a formal security incident response program which provides clear, practical guidelines and actionable steps to respond to cybersecurity incidents. The security incident response program provides a framework which is comprised of different phases and overarching functions, representing the key activities to prepare for and respond to a security incident. Additionally, a cross-functional incident response team is utilized to ensure that appropriate staff, resources and expertise are available at all times to provide a coordinated response to any incident or event that may threaten the computer systems, information resources or data of the Company. In the event of a suspected or confirmed security incident, the Company’s Chief Information Security Officer (CISO) is responsible for coordinating with internal departments, including risk, compliance and legal, and other senior management as appropriate as well as outside vendors and advisors. Incident response exercises and tests are conducted periodically to help ensure an adequate incident response program is in place. Upon completion of the tests, results are documented and evaluated and reported to the Company’s senior management and the Board of Directors, as appropriate. Any notable deficiencies or findings resulting from the tests are entered into the Company’s open issues tracking system, to be tracked for follow-up and/or remediation, as applicable. The CISP is characterized by strong board and senior management level support and governance, integration through the Company’s business processes and clear accountability for carrying out respective responsibilities. Navient’s information security team coordinates a review of the CISP on an annual basis to confirm that the CISP complies with applicable laws and regulations. The CISP is also reviewed and approved by the 59 Company’s CISO and the Board of Directors at least annually. Further, our CISO is responsible for administering the CISP. Our CISO, along with our Chief Information Officer (CIO), provides periodic reports regarding the status of the program and the overall state of the Company’s security to senior management and the Board of Directors, as may be necessary or appropriate. From time to time, Navient engages third parties in connection with its risk management processes, including to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices. Navient may also from time to time engage third parties to provide services to Navient, pursuant to which the third-party service provider receives, maintains, processes, or otherwise accesses Navient customer data and other confidential or proprietary information. Navient maintains industry standard risk management practices to ensure that service provider risks are identified and mitigated. Outsourced functions are held to the same level of rigor, continuous monitoring, and security & privacy requirements as if the functions were performed within the Company. Navient maintains a third party and outsourcing security program that provides a framework for engaging with third-party service providers, emphasizing risk management oversight. Navient also takes appropriate steps to monitor and/or audit service providers to ensure compliance with this program. All material agreements with service providers contain a provision that requires them, at a minimum, to implement and maintain an information security program that complies with the customer/employee information safeguarding regulations, and to authorize the Company to conduct security assessments, reviews, auditing and monitoring to ensure compliance. As of the date of this Form 10-K, Navient has not encountered any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company. While we continually monitor potential or likely cybersecurity threats and remain prepared to respond to any threats or incidents in an efficient, effective and consistent manner, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on the Company. See “Risk Factors — Operational Risks — We depend on secure information technology, and a breach of our information technology systems could result in significant losses, disclosure of confidential customer information and reputational damage, which would adversely affect our business” for further discussion of our cybersecurity risks. Governance The Company’s Board of Directors plays a critical role in overseeing the Company’s cybersecurity risk management program. The Board of Directors receives regular briefings from the Company’s CIO and CISO on material matters related to information security such as risk assessments, risk management and results of testing and security incidents, and is notified between such updates regarding significant new cybersecurity threats or incidents. The Board of Directors also receives a formal, annual report on the effectiveness of the Company’s CISP from the Company’s CIO and CISO and approves the program on an annual basis. The Company’s CISO is responsible for administering and managing the CISP as well as for managing, communicating, conducting and coordinating all investigations regarding information technology or related to the use or misuse of the Company’s or our vendor’s computer systems, applications, data or resources. No cybersecurity incident response activity is permitted to be executed without the consent and approval of our CISO. Our CISO provides periodic reports regarding the status of the CISP and the overall state of the Company’s security to senior management and to the Board of Directors. Further, the CISO and his information security team coordinate periodic incident response exercises and tests to help ensure an adequate incident response program is in place, as described above. Upon completion of the tests, results and any findings are reported to the Company’s senior management, the Board of Directors and the Enterprise Risk and Compliance Committee. The Company’s CISO has been with the Company for over 23 years. Prior to being appointed CISO in August 2025, he led the Incident Response and Penetration Testing teams and directly supported previous CISOs. He was also an integral member of the Security Architecture and Infrastructure Architecture teams. Navient’s Enterprise Risk and Compliance Committee is an executive management-level committee to whom senior management reports and with whom senior management reviews significant risks, including risks relating to cybersecurity, receives reports on adherence to established risk parameters, provides direction on mitigation and remediation of our risks and closure of issues and supervises our enterprise risk management program. For more information on our Enterprise Risk and Compliance Committee and its roles and responsibilities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Risk Oversight, Roles and Responsibilities—Enterprise Risk and Compliance Committee.”