SLM Corp (SLM) Business

Item 1. Business

Our Company Mission

SLM Corporation, more commonly known as Sallie Mae, is the premier financial brand in higher education. As an education solutions company, we provide students and their families with the products and services needed to confidently and successfully navigate their higher education journey. We support students and families navigating to, through, and immediately after higher education. We simplify the college planning process and advance higher education access and completion by providing free tools, resources, scholarships, and responsible financing options.

We believe education, in all forms, is the foundation for success, an equalizer of opportunities, and a proven pathway to economic mobility. Higher education increases lifetime wages and enables economic mobility. For example, data from the U.S. Bureau of Labor and Statistics confirms those with bachelor’s degrees earn 66 percent more than those with a high school diploma.1 Those with advanced degrees earn an even greater percentage than those with a high school diploma.1 This effect is multigenerational, as children of parents who are college educated are more likely to earn a bachelor’s degree than students whose parents did not go to college. Most would agree our society prospers and becomes more economically inclusive when each of its members is provided access to post-secondary education.2 Education represents a transformative investment in one’s future that yields our country’s next nurses, teachers, engineers, business leaders, and more.

Our History

While the Sallie Mae name has existed for more than 50 years, the company that operates as Sallie Mae today, SLM Corporation, was formed in late 2013 and includes its wholly owned subsidiary, Sallie Mae Bank, an industrial bank established in 2005 (the “Bank”). On April 30, 2014, we legally separated (the “Spin-Off”) from another public company that is now named Navient Corporation (“Navient”), which is in the education loan management, consolidation loan, and business processing businesses. Navient retained all assets and liabilities generated prior to the Spin-Off other than those explicitly retained by us pursuant to the Separation and Distribution Agreement executed in connection with the Spin-Off (the “Separation and Distribution Agreement”). We are a consumer banking business and did not retain any assets or liabilities generated prior to the Spin-Off other than those explicitly retained by us pursuant to the Separation and Distribution Agreement. We sometimes refer to the company that existed prior to the Spin-Off as “pre-Spin-Off SLM.”

Our principal executive offices are located at 300 Continental Drive, Newark, Delaware 19713. Additionally, we have offices in New Castle, Delaware; Salt Lake City, Utah; Indianapolis, Indiana; Newton, Massachusetts; and Sterling, Virginia. Our telephone number is (302) 451-4911.

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1 “Education pays, 2024,” Career Outlook, U.S. Bureau of Labor Statistics, May 2025.

2 https://research.collegeboard.org/trends/education-pays. The information contained on, or accessible through, the foregoing website does not constitute a part of, and is not incorporated by reference in, this Annual Report on Form 10-K.

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Our Business

Our business is focused and aligned to strategic imperatives that set the foundation for our continued success. Our focus is driving innovation to maximize the sustainable growth and profitability of our core private student loan business. Additionally, we aim to accelerate the growth of new lines of business to attract more customers requiring our products and services. We are also focused on building the data infrastructure, technology, and talent required to compete in a digital world. We seek to create a customer-centric brand as an education solutions company that supports students and families through their higher education journey. We are focused on driving greater internal commitment to our mission, brand, and strategy, while we evolve our structure and risk capabilities to support our core private student loan business and emerging new businesses.

Private Education Loans

Our primary business is to originate and service high-quality Private Education Loans. “Private Education Loans” are education loans for students or their families that are not made, insured, or guaranteed by any state or federal government. We also offer a range of deposit products insured by the Federal Deposit Insurance Corporation (the “FDIC”). We serve more families than any other private student loan lender. We originated approximately $7.4 billion of Private Education Loans in 2025, an increase of 6 percent from the year ended December 31, 2024. As of December 31, 2025, we had $20.3 billion of Private Education Loans held for investment, net, outstanding.

Our Private Education Loans serve primarily to bridge the gap between the cost of higher education and the amount funded through family income and savings, scholarships and grants, and federal financial aid. We also extend Private Education Loans as an alternative to similar federal education loan products where we believe our rates are competitive.

Private student lending is cyclical in nature. We typically experience peak volume of originations and commitments in the third quarter of our fiscal year, corresponding to the required timing of disbursements prior to the start of the fall semester at most higher education institutions. There is generally also a “mini-peak” in volume of originations and commitments in the first quarter of our fiscal year, corresponding to the required timing of disbursements prior to the start of the spring semester at most higher education institutions. Similarly, we also experience cyclicality with respect to when borrowers are scheduled to exit their applicable grace period and enter full principal and interest repayment status, with the largest volume generally happening in our fourth fiscal quarter, and a smaller wave occurring in our second fiscal quarter.

Our primary Private Education Loan product is the Smart Option Student Loan, which emphasizes in-school payment features that can produce shorter terms and reduce customers’ total finance charges. Customers elect one of three Smart Option repayment types at the time of loan origination. The first two, interest only and fixed payment options, require monthly payments while the student is in school and during the grace period thereafter, and accounted for more than half of the Private Education Loans the Bank originated during 2025. The third repayment option is the more traditional deferred Private Education Loan product where customers are not required to make payments while the student is in school and during the grace period after separation from school. The grace period for a Smart Option Student Loan generally runs for six months after the borrower separates from school and can run for up to 36 months for a small subset of graduate loans. Lower interest rates on the interest only and fixed payment options encourage customers to elect those options, which help reduce total loan cost compared with the traditional deferred option loan. Making payments while in school helps customers become accustomed to making on-time regular loan payments. We offer both variable-rate and fixed-rate loans.

We also offer six loan products for specific graduate programs of study. These include the Sallie Mae Law School Loan, the Sallie Mae MBA Loan, the Sallie Mae Graduate School Loan for Health Professions, the Sallie Mae Medical School Loan, the Sallie Mae Dental School Loan, and the Sallie Mae Graduate School Loan. These products were designed to address the specific needs of graduate students. We also offer two non-cost of attendance loans to support bar study preparation, as well as residency and relocation expenses for medical and dental school students. In 2025, we launched the Airline Career Loan which is tailored to the unique needs of students pursuing professional pilot program certificates.

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We regularly review and update the terms of our Private Education Loan products. As a holder of Private Education Loans, we bear the full credit risk of the customers. We manage this risk by underwriting and pricing based on customized credit scoring criteria and the addition of qualified cosigners. For Private Education Loans originated during the year ended December 31, 2025, our average FICO scores (representing the higher credit scores of the cosigners or borrowers) at the time of original approval were 755, and approximately 92.8 percent of those loans were cosigned. In addition, for all loans other than Bar Study loans and Residency and Relocation loans, we require school certification of both the need for, and the amount of, every Private Education Loan we originate (to prevent unnecessary borrowing beyond a school’s cost of attendance), and we disburse the loan proceeds directly to the higher education institutions to ensure loan proceeds are applied directly to the student’s education expenses.

The core of our marketing strategy is to promote our products on campuses through financial aid offices as well as through online and direct marketing to students and families. Our on-campus efforts with more than 2,100 higher education institutions are actively managed by our relationship management team, the largest in the industry, which has become a trusted resource for financial aid offices.

Our loans are of high-credit quality, and the overwhelming majority of our customers manage their payments with great success. Private Education Loans in repayment include loans on which customers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period. At December 31, 2025, 4.0 percent of Private Education Loans (held for investment) in repayment were 30 days or more delinquent, and Private Education Loans (held for investment) in forbearance were 2.7 percent of loans in repayment and forbearance. In 2025, Private Education Loan net charge-offs as a percentage of average loans in repayment were 2.15 percent.

Sallie Mae Bank

The Bank, which is regulated by the Utah Department of Financial Institutions (the “UDFI”), the FDIC, and the Consumer Financial Protection Bureau (the “CFPB”), offers traditional savings products, such as high-yield savings accounts, money market accounts, and certificates of deposit (“CDs”), and originates Private Education Loans. At December 31, 2025, the Bank had total assets of $29.7 billion, including $20.4 billion of Private Education Loans (held for investment), net, and total deposits of $21.5 billion.

Our ability to obtain deposit funding and offer competitive interest rates on deposits will be necessary to sustain our Private Education Loan originations and achieve other business goals. Our ability to obtain such funding is dependent, in part, on the capital levels of the Bank and its compliance with other applicable regulatory requirements. During 2025, we maintained our diversified funding base by raising $0.5 billion in term funding collateralized by pools of Private Education Loans in the long-term asset-backed securities (“ABS”) market. This brought our total ABS funding outstanding at December 31, 2025 to $4.9 billion, or 24 percent of our total Private Education Loans held for investment portfolio. We plan to continue to use ABS funding, market conditions permitting. This helps us better match-fund our assets and avoids excessive reliance on deposit funding.

See Item 1. “Business — Supervision and Regulation — Regulation of Sallie Mae Bank” for additional details about the Bank.

Strategic Partnerships and Loan Program Management

In 2025, we announced our first private credit strategic partnership. This new funding model allows us to establish a capital-light, fee-based revenue strategy that complements our core private student loan business. Under our strategic partnership (and any future partnerships that we may enter into), we intend to sell Private Education Loans while maintaining the relationships with customers, retaining servicing for the sold loans, and earning ongoing fees for providing servicing and program management, including industry expertise. We expect strategic partnerships to expand our access to scalable and capital efficient funding through innovative structures, while strengthening our loan originations capacity and ability to serve students families.

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Our Lending Philosophy

Sallie Mae is committed to responsible lending and encourages responsible borrowing by advising students and families to follow this three-step approach to paying for higher education:

Start with money you won’t have to pay back. Supplement savings and income by maximizing scholarships, grants, and work-study.

Explore federal student loans. Explore federal student loan options by completing the Free Application for Federal Student Aid.

Consider a responsible private student loan. Fill the gap between available resources and any remaining costs of higher education.

The best interests of our customers are front-and-center and integral to our responsible lending philosophy. We reward financial responsibility, emphasize building good credit, and provide flexible repayment terms to help customers manage and eliminate debt. We also embed customer protections in our products. To ensure applicants borrow only what they need to cover their school’s cost of attendance, we actively engage with schools and require school certification before we disburse a Private Education Loan (except for Bar Study loans and Residency and Relocation loans). To help applicants understand their loan and its terms, we provide multiple, customized disclosures explaining the applicant’s interest rate, whether the interest rate is fixed or variable, and the loan’s total cost under the available repayment options. Our Private Education Loans generally feature (i) no origination fees and no prepayment penalties, (ii) an interest rate reduction for those who enroll in and make monthly payments through auto debit, (iii) free access to quarterly FICO credit scores to help customers monitor their credit health, (iv) a choice of repayment options, (v) a choice of either a variable or fixed interest rate, and (vi) loan forgiveness in the case of death or permanent disability of the student borrower.

Our Approach to Assisting Students and Families Borrowing and Repaying Private Education Loans

Approximately half of our Private Education Loan customers elect an in-school repayment option. By making in-school payments, customers learn to establish good repayment patterns, reduce their total loan cost, and graduate with less debt. We send monthly communications to customers while they are in school, even if they have no monthly payments scheduled, to keep them informed and encourage them to reduce the amount they will owe when they leave school.

Our experience has taught us the successful transition from school to full principal and interest repayment status involves making and carrying out a financial plan. As customers approach the principal and interest repayment period on their loans, Sallie Mae engages with them and communicates what to expect during the transition. In addition, SallieMae.com provides educational content for customers on how to organize loans, set up a monthly budget, and understand repayment obligations. Examples are provided to help explain how payments are applied and allocated, and how the accrued interest on alternative repayment programs could affect the cost of customers’ loans.

Some customers transitioning from school to the work force may require more time before they are financially capable of making full payments of principal and interest. Sallie Mae created a Graduated Repayment Period program (“GRP”) to assist borrowers with additional payment flexibility, allowing eligible customers to make interest-only payments instead of full principal and interest payments for a period of 12 months if they elect within a specified time frame to participate in GRP. Generally, the 12-month interest-only payments under GRP begin upon expiration of a borrower’s grace period or election of GRP, whichever is later.

After graduation, a student borrower may apply for the cosigner to be released from the loan. This option is available after 12 principal and interest payments are made and the student borrower demonstrates an ability to assume sole responsibility for repayment of the loan. In the event of a cosigner’s death, the student borrower automatically continues as the sole individual on the loan with the same terms.

If a customer’s account becomes delinquent, our collection teams work with the customer and/or the cosigner to understand their ability to make ongoing payments. If the customer is in financial hardship, we work with the customer and/or cosigner and identify potential alternative arrangements designed to reduce monthly payment

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obligations. These can include extended grace periods, short-term hardship forbearances, temporary interest rate reductions, and, in some cases, permanent interest rate reductions. We offer rate and term modifications to customers experiencing more severe hardship. These arrangements are intended to address the customer’s individual circumstances and ability to make payments. When we grant forbearance or modify a loan, we counsel customers on the effect the forbearance or modification will have on their loan balance. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Modifications as a Private Education Loan Collection Tool” for additional information about our credit administration practices.

Customer Service

We perform the origination, servicing, and collections activities for all of our Private Education Loans with dedicated representatives assisting customers with various needs. We expect the Bank or affiliates of the Bank to retain servicing of all Private Education Loans the Bank originates, regardless of whether the loans are held, sold, or securitized.

Over the past few years, we have implemented several improvements in our ability to interact with our loan customers, including:

•an integrated platform with customer-centric capabilities that allows self-service and empowers our servicing and collections agents, thus streamlining our processes and providing efficiencies;

•an online chat function for application support, customer service, and collections related inquiries;

•a mobile application accessible through smart phones; and

•expansion of customer surveys to gain feedback on areas for improvement within our originations, servicing, and collections functions.

Customer Success

We continue to adapt our business to best serve the needs of families who see us as a trusted advisor and partner. We are strongly invested in our customers’ success. Of our total loan portfolio, approximately 96 percent of loans in repayment are in good standing, and, on average, fewer than 3 percent of loans default annually.

In 2022, we acquired the assets of Epic Research Education Services, LLC, which did business as Nitro College (“Nitro”). Nitro provided resources that helped students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation.

The acquisition of Nitro enhanced future strategic growth opportunities and expanded our digital marketing capabilities, reduced the cost to acquire customer accounts, and accelerated our progress to become a broader education solutions provider helping students to, through, and immediately after higher education. In 2024, we completed the transition of the related Nitro branding to the Sallie and Sallie Mae brands and platforms.

In 2023, we completed the acquisition of several key assets of Scholly, Inc. (“Scholly”), which was engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products that offered custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers. Scholly supports our mission of providing students with the confidence needed to successfully navigate the higher education journey.

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Key Drivers of Private Education Loan Market Growth

The size of the Private Education Loan market is based primarily on three factors: college enrollment levels, the costs of attending college, and the availability of funds from the federal government to pay for a college education. The amounts students and their families can contribute toward college costs and the availability of scholarships and institutional grants are also important. If the cost of education increases at a pace exceeding the sum of family income, savings, federal lending, and scholarships, or the availability of federal education loans, grants, or subsidies and scholarships significantly decrease, more students and families can be expected to rely on Private Education Loans. If enrollment levels or college costs decline, or the availability of federal education loans, grants, or subsidies and scholarships significantly increases, Private Education Loan demand could decrease.

Traditionally, we have focused primarily on students attending public and private not-for-profit four-year degree granting institutions. We lend to some students attending two-year and for-profit schools. Due to the lower cost of two-year programs, federal grant and loan programs are typically sufficient for the funding needs of these students. Approximately 16 percent or $1.25 billion of our 2025 Private Education Loan originations were for students attending for-profit schools. The for-profit schools where we continue to do business are primarily focused on career training and health care fields. We expect students who attend and complete programs at for-profit schools to support the same repayment performance as students who attend and graduate from public and private not-for-profit four-year degree granting institutions.

As discussed in more detail in Item 1. “Business — Supervision and Regulation — Overview”, certain reforms to the federal student loan program have been enacted into law and will become effective for new borrowers beginning July 1, 2026. We anticipate that these changes to the federal student loan program, which establish caps on certain federal student loan programs and eliminate certain federal graduate student loan programs, will increase demand for Private Education Loans, particularly for graduate students and parents. As part of our origination expansion initiative, we are working to expand our product offerings and originations capabilities to be ready for this anticipated increase in demand.

Our primary competitors1 in the Private Education Loan market include large banks and specialty finance companies such as Citizens Financial Group, Inc., PNC Bank, Sofi Technologies, Inc. and College Ave, and members of the Education Finance Council. We compete based on our products, originations capability, price, and customer service.

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1Source: Enterval Analytics LLC Q3 2025 Private Student Loan Semi Annual Report, January 2026.

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Enrollment

According to the College Board’s study, the full-time equivalent enrollment for undergraduate and graduate students has remained relatively flat since 2020/2021.2 We expect that trend to continue over the next several years.

Full-Time Equivalent Enrollment2

(in millions)

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2Source: The College Board-Trends in College Pricing 2025. © 2025 The College Board. These are the most recent sources available to us for this information. 2024/2025 is an estimate.

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Tuition Rates

Average published tuition and fees (exclusive of room and board) at four-year public and private not-for-profit institutions increased at compound annual growth rates of 2.1 percent and 3.4 percent, respectively, from AYs 2021-2022 through 2025-2026. Average published tuition and fees at public and private four-year not-for-profit institutions grew 2.7 percent and 3.6 percent, respectively, between AYs 2023-2024 and 2024-2025 and 2.9 percent and 4.0 percent, respectively, between AYs 2024-2025 and 2025-2026.3

Published Tuition and Fees3

(Dollars in actuals)

3 Source: The College Board-Trends in College Pricing 2025. © 2025 The College Board. The College Board restates its data annually, which may cause previously reported results to vary.

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Sources of Funding

Private Education Loan originations were an estimated $11.5 billion in AY 2024-2025, consistent with an estimated $11.5 billion of Private Education Loan originations in AY 2023-2024.4

4 Source: The College Board-Trends in Student Aid 2025© The College Board. Enterval LLC. Funding sources in current dollars and include federal and private student loan data. Other sources for the size of the Private Education Loan market exist and may cite the size of the market differently. The College Board restates its data annually, which may cause previously reported results to vary. We rely on publicly available sources for market estimates, because we believe it provides a more appropriate basis for comparison of the performance of our business.

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We estimate total spending on higher education was $536 billion in AY 2024-2025, up from $466 billion in AY 2020-2021. Private Education Loan originations increased $1 billion from the year-ago period to an estimated $14 billion in AY 2024-2025 and represent just 2.6 percent of total spending on higher education.5

Over the AYs 2020-2025 period, increases in total spending have been absorbed primarily through increased family contributions. If household finances continue to improve, we would expect this trend to continue.

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5 Source: Total post-secondary education spending is estimated by Sallie Mae determining the full-time equivalents for both graduates and undergraduates and multiplying by the estimated total per person cost of attendance for each school type. In doing so, we utilize information from the U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics to 2031 (NCES 2025, January 2025), The Integrated Postsecondary Education Data System (IPEDS), College Board -Trends in College Pricing and Student Aid 2025. © 2025 The College Board and Company analysis. Other sources for these data points also exist publicly and may vary from our computed estimates. NCES, IPEDS, and College Board restate their data annually, which may cause previous reports to vary. We have also recalculated figures in our Company analysis to standardize all costs of attendance to dollars not adjusted for inflation. This has a minimal impact on historically-stated numbers.

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Supervision and Regulation

Overview

We are subject to extensive regulation, examination, and supervision by various federal, state, and local authorities. The more significant aspects of the laws and regulations that apply to us and our subsidiaries are described below. These descriptions are qualified in their entirety by reference to the full text of the applicable statutes, legislation, regulations, and policies, as they may be amended, and as interpreted and applied, by federal, state, and local agencies.

Federal law establishes requirements and mandates oversight on almost every aspect of the U.S. financial services industry, including consumer protection laws and regulations, capital and liquidity requirements, limits on leverage, and enhanced supervisory authority.

Additionally, states are taking an increased interest in directly regulating the conduct and practices of student loan lenders and servicers. Some states have enacted legislation creating specialized offices within state government to oversee the student loan origination and servicing industry operating within those states, as well as to set minimum standards governing the practices of student loan lenders and servicers. This represents a significant change from the past in which states generally did not issue laws and regulations tailored specifically to the student loan origination and servicing industry.

Passage of H.R.1

The passage of H.R.1 in July 2025 (“H.R.1.”) introduced significant changes to federal student loan programs, effective July 1, 2026, with limited grandfathering for existing borrowers. Key changes to federal student loan programs and repayment options under H.R.1 include:

•the elimination of Grad PLUS loans for graduate students;

•the capping of Parent PLUS loans at $20,000 annually and $65,000 lifetime per student;

•new Graduate loan limits of $20,500 annually ($100,000 lifetime) for non-professional degrees and $50,000 annually ($200,000 lifetime) for professional degrees;

•new universal lifetime borrowing cap across all federal programs;

•an overhaul of the federal student loan repayment structure including the introduction of the Repayment Assistance Plan (RAP), requiring payments of 1%–10% of adjusted gross income, with forgiveness after 30 years;

•a phase-out of existing income-driven repayment plans (e.g., SAVE, PAYE, ICR) by July 1, 2028; and

•stricter forbearance and deferment provisions.

Consumer Protection Laws and Regulations

A number of our products and services, including our origination, servicing, first-party collection, deposit taking, and education solutions activities, subject us to federal and state consumer protection, privacy, and related laws and regulations. Some of the more significant laws and regulations applicable to our business include:

•various state and federal laws governing unfair, deceptive, or abusive acts or practices;

•various state laws and regulations imposing specific, mandated standards and requirements on the conduct and practices of student loan lenders and servicers;

•the federal 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 creditor practices that discriminate on the basis of race, religion, and other prohibited factors in extending credit;

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•the Servicemembers Civil Relief Act, which applies to all debts incurred prior to commencement of active military service (including education loans) and limits the amount of interest, including fees, that may be charged;

•the Truth in Savings Act and Regulation DD, which mandate certain disclosures related to consumer deposit accounts;

•the Expedited Funds Availability Act, Check Clearing for the 21st Century Act and Regulation CC issued by the Board of Governors of the Federal Reserve System, which relate to the availability of deposit funds to consumers;

•the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with federal government requests for and subpoenas of financial records;

•the Electronic Funds Transfer Act and Regulation E, which govern automated transfers of funds and consumers’ rights related thereto;

•the Telephone Consumer Protection Act, which governs communication methods that may be used to contact customers;

•the Gramm-Leach-Bliley Act, which governs the ability of financial institutions to disclose nonpublic information about consumers to non-affiliated third parties; and

•the California Consumer Privacy Act and California Privacy Rights Act, which govern transparency and disclosure obligations regarding personal information of residents of the State of California.

Consumer Financial Protection Bureau

The CFPB is the Bank’s primary consumer compliance supervisor with compliance examination authority and primary consumer protection enforcement authority. The CFPB has broad authority to promulgate regulations under federal consumer financial protection laws and to directly or indirectly enforce those laws, including providing regulatory oversight of the Private Education Loan industry, and to examine financial institutions for compliance. It is authorized to collect fines and order 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 has authority to prevent unfair, deceptive, or abusive acts and practices by issuing regulations or by using its enforcement authority without first issuing regulations.

The Private Education Loan Ombudsman within the CFPB is authorized to receive and attempt to informally resolve inquiries about Private Education Loans. The Private Education Loan Ombudsman is required by law to report to Congress annually on the trends and issues identified through this process. The CFPB recently indicated its intent to deemphasize student loans in its supervision and examination priorities going forward. Further, the operational, enforcement and regulatory posture of the CFPB under the current federal administration is currently unclear.

Regulation of Sallie Mae Bank

The Bank was chartered in 2005 and is a Utah industrial bank regulated by the FDIC, the UDFI, and the CFPB. We are not a bank holding company under the Bank Holding Company Act, and, therefore are not subject to the federal regulations applicable to bank holding companies. However, we and our non-bank subsidiaries are subject to regulation and oversight as institution-affiliated parties. The following discussion sets forth some of the elements of the bank regulatory framework applicable to us, the Bank, and our other non-bank subsidiaries.

General

The Bank is currently subject to prudential regulation and examination by the FDIC and the UDFI, and consumer compliance regulation and examination by the CFPB. Numerous other federal and state laws and regulations govern almost all aspects of the operations of the Bank and, to some degree, our operations and those of our non-bank subsidiaries as institution-affiliated parties.

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Actions by Federal and State Regulators

Under federal and state laws and regulations pertaining to the safety and soundness of insured depository institutions, the UDFI and the FDIC have the authority to compel or restrict certain actions of the Bank if it is determined to lack sufficient capital or other resources or is otherwise operating in a manner deemed to be inconsistent with safe and sound banking practices. Under this authority, the Bank’s regulators can require it to enter into informal or formal supervisory agreements, including board resolutions, memoranda of understanding, written agreements, and consent or cease and desist orders, pursuant to which the Bank would be required to take identified corrective actions to address cited concerns and refrain from taking certain actions.

Enforcement Powers of Regulators

As “institution-affiliated parties” of the Bank, we, our non-bank subsidiaries, and our management, employees, agents, independent contractors, and consultants are subject to potential civil and criminal penalties for violations of law, regulations, or written orders of a government agency. Violations can include failure to timely file required reports, filing false or misleading information, or submitting inaccurate reports. Civil penalties may be as high as $1,000,000 per day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years. Regulators have flexibility to commence enforcement actions against institutions and institution-affiliated parties, and the FDIC has the authority to terminate deposit insurance. When issued by a banking agency, cease and desist and similar orders may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including by compelling restitution, reimbursement, indemnification, or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain assets, rescind agreements or contracts, or take other actions determined to be appropriate by the ordering agency. The federal banking regulators also may remove a director or officer from an insured depository institution (or bar them from the industry) if a violation is willful or reckless.

Standards for Safety and Soundness

The Federal Deposit Insurance Act requires the federal banking regulatory agencies such as the FDIC to prescribe, by regulation or guidance, operational and managerial standards for all insured depository institutions, such as the Bank, relating to internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, and asset quality. The agencies also must prescribe standards for earnings and stock valuation, as well as standards for compensation, fees, and benefits. The federal banking regulators have implemented these required standards through regulations and interagency guidance designed to identify and address problems at insured depository institutions before capital becomes impaired. Under the regulations, if a regulator determines a bank fails to meet any prescribed standards, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.

Dividends and Share Repurchase Programs

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein.

The Company pays quarterly cash dividends on its outstanding Floating-Rate Non-Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”) when, as, and if declared by its Board of Directors, in the Board’s discretion. In January 2019, the Company initiated a new policy to pay a regular, quarterly cash dividend on its common stock as well, beginning in the first quarter of 2019, and its Board of Directors approved a common stock share repurchase program.

Common stock dividend declarations are subject to determination by, and the discretion of, the Company’s Board of Directors. The Company may change its common stock dividend policy at any time.

We expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common

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share repurchases by the Company under the Company’s share repurchase programs. The Bank declared $700 million, $570 million, and $550 million in dividends for the years ended December 31, 2025, 2024, and 2023, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends.

Our Board of Directors has authorized share repurchase programs during prior years, including a share repurchase program which was approved in January 2024 (for a program of up to $650 million of common stock). As of December 31, 2025, we had $33 million of capacity remaining under the 2024 Share Repurchase Program (as hereinafter defined). The 2024 Share Repurchase Program expired on February 6, 2026. On January 22, 2026, we announced a new share repurchase program (the “2026 Share Repurchase Program”), which became effective on January 22, 2026 and is expected to be completed over the next approximately 24 months ending on February 4, 2028. The 2026 Share Repurchase Program permits us to repurchase shares of our common stock from time to time in various transaction formats including, but not limited to, tender offers, open market purchases, accelerated share repurchases, negotiated or block purchases, and/ or pursuant to trading plans in accordance with Rules 10b5-1 and 10b-18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), up to an aggregate repurchase price not to exceed $500 million.

Under the share repurchase programs, purchases take place as and when we determine in open market or private transactions made based upon the market price of our common stock, the nature of other investment opportunities or growth projects, our cash flows from operations, and general economic conditions. The share repurchase programs do not require us to acquire any specific number of shares, and may be modified, suspended, extended, or terminated by us at any time. We repurchased 12.8 million and 11.6 million shares during the years ended December 31, 2025 and 2024, respectively. See Notes to the Consolidated Financial Statements, Note 13, “Stockholders’ Equity” in this Form 10-K for additional information.

Regulatory Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking authorities. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial condition.

For more information on how the Bank manages its capital position, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulatory Capital – Capital Management.”

Stress Testing Requirements

The Bank is not currently subject to stress testing requirements under the Dodd-Frank Act. However, under regulatory guidance, the Bank still conducts annual capital stress tests, the results of which it presents to its prudential regulators - the FDIC and the UDFI - for their review. The Bank also conducts quarterly liquidity stress tests to evaluate the adequacy of its liquidity sources under various stress scenarios and provides the results to its Board of Directors. These results are submitted to the Bank’s prudential regulators at their request.

Deposit Insurance and Assessments

Deposits at the Bank are insured up to the applicable legal limits by the FDIC-administered Deposit Insurance Fund (the “DIF”), which is funded primarily by quarterly assessments on insured banks. An insured bank’s assessment is calculated by multiplying its assessment rate by its assessment base. A bank’s assessment base and assessment rate are determined each quarter.

The Bank’s insurance assessment base currently is its average consolidated total assets minus its average tangible equity during the assessment period. The Bank’s assessment rate is determined by the FDIC using a number of factors, including the results of supervisory evaluations, the Bank’s capital ratios and its financial condition, as well as the risk posed by the Bank to the DIF. Assessment rates for insured banks also are subject to adjustment depending on a number of factors, including significant holdings of brokered deposits in certain instances and the issuance or holding of certain types of debt.

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Deposits

With respect to brokered deposits, an insured depository institution must be well capitalized under the prompt corrective action framework in order to accept, renew, or roll over such deposits without FDIC clearance. An adequately capitalized insured depository institution must obtain a waiver from the FDIC to accept, renew, or roll over brokered deposits. Undercapitalized insured depository institutions generally may not accept, renew, or roll over brokered deposits. For more information on the Bank’s deposits, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Financial Measures — Funding Sources.”

Regulatory Examinations

The Bank currently undergoes regular on-site examinations by the Bank’s regulators, who examine for adherence to a range of legal and regulatory compliance responsibilities. A regulator conducting an examination has unfettered access to the books and records of the examined institution. The results of the examination are confidential. The cost of examinations may be assessed against the examined institution as the agency deems necessary or appropriate.

Source of Strength

Under the Dodd-Frank Act, we are required to serve as a source of financial strength to the Bank and to commit resources to support the Bank in circumstances when we might not do so absent the statutory requirement. Any loan by us to the Bank would be subordinate in right of payment to depositors and to certain other indebtedness of the Bank.

Community Reinvestment Act

The Community Reinvestment Act (the “CRA”) requires the FDIC to evaluate the record of the Bank in meeting the credit needs of its local community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. These evaluations are considered in evaluating mergers, acquisitions, and applications to open a branch or facility. Failure to adequately meet these criteria could result in additional requirements and limitations on the Bank. The Bank received a CRA rating of Outstanding on its most recent review.

Data Privacy and Data Security Laws and Regulations

The federal banking regulators, as required by the Gramm-Leach-Bliley Act (“GLBA”), have adopted regulations that limit the ability of banks and other financial institutions to disclose nonpublic information about consumers to unaffiliated third parties. Financial institutions are required to disclose to consumers their policies for collecting and protecting confidential customer information. Customers generally may prevent financial institutions from sharing nonpublic personal information with unaffiliated third parties, with some exceptions. Financial institutions generally may not disclose certain consumer or account information to any unaffiliated third party for use in telemarketing, direct mail marketing, or other marketing. The privacy regulations also restrict information sharing among affiliates for marketing purposes and govern the use and provision of information to consumer reporting agencies. Federal and state banking agencies have adopted regulations for maintaining the security and confidentiality of consumer information, and the Bank is subject to such regulations, as well as certain federal and state laws or regulations for notifying consumers or governmental agencies in the event of a security breach. In addition, we must comply with increasingly complex and rigorous data privacy and data security laws and regulations enacted or adopted to protect business and personal information. These laws and regulations impose additional obligations on companies regarding the handling of personal information and provide certain individual privacy rights to persons whose personal information is stored and shared. Any failure to comply with these laws and regulations could subject us to legal and reputational risk. For example, we are subject the rules and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices (including with respect to data privacy and data security). At the state level, California passed the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, and the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA and brought additional compliance obligations with respect to certain processing of personal information of California residents once it came into effect in most material respects on January 1, 2023. The CCPA and CPRA apply to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds. The CCPA and CPRA contain several exemptions, including an exemption applicable to information that is collected, processed, sold, or disclosed pursuant to the GLBA. However, the definition of personal information is expanded under the California statutes to apply to certain data

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beyond the scope of the GLBA exemption. Additionally, numerous other states have enacted or are in the process of enacting state-level data privacy and data security laws and regulations relating to the collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information, including the personal information of minors in some cases. Further, laws in all 50 U.S. states require businesses to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach. Misuse of or failure to secure certain personal information could result in violation of data privacy or data security laws and regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility, and could negatively affect our business, financial condition, and results of operations. If other states in the U.S. adopt similar laws or if a comprehensive federal data privacy or data security law is enacted, or if regulators whose authority we are subject to adopt additional or amend existing data privacy or data security regulations, we may expend considerable additional resources to meet these requirements and the overall risk to the Company could incrementally increase depending upon the reach and application of any such laws or regulations.

State Regulation of Student Loan Lenders, Holders, and Servicers

In certain states, laws regulating the conduct of student loan lenders, holders, and servicers may apply to and impact the origination, holding, and servicing practices of the Bank and/or other Company subsidiaries. While these state laws vary in content, they generally include components relating to licensure and oversight by state authorities and the creation of specialized student loan ombudsman offices to oversee the student loan industry operating within these states. These laws may also include requirements pertaining to registration, reporting, payment processing, customer communications, the handling of customer inquiries and complaints, information concerning loan repayment options, access to borrower account records, the processing of disability applications and borrower requests to remove cosigners from loans, and debt collection, among other requirements. Notably, these laws often include provisions for enforcement of alleged violations by state regulators as well as private litigation by aggrieved consumers.

Other Sources of Regulation

Many other aspects of our businesses are subject to federal and state regulation and administrative oversight. Some of the most significant of these are described below.

Oversight of Derivatives

Title VII of the Dodd-Frank Act requires certain standardized derivatives, including most interest rate swaps, to be submitted for clearing to central intermediaries to reduce counterparty risk. Two of the central intermediaries we use are the Chicago Mercantile Exchange (the “CME”) and the London Clearing House (the “LCH”). All variation margin payments on derivatives cleared through the CME and LCH are required to be accounted for as legal settlement. As of December 31, 2025, $562 million notional of our derivative contracts were cleared on the CME and $11 million were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 98.0 percent and 2.0 percent, respectively, of our total notional derivative contracts of $573 million at December 31, 2025. Our exposure on these derivative contracts is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero.

Credit Risk Retention

The Dodd-Frank risk retention rules generally require sponsors of ABS, such as Sallie Mae, to retain an economic interest in an ABS transaction that represents at least five percent of the credit risk of the assets being securitized. We early adopted the Dodd-Frank risk retention rules beginning with our 2016-A securitization transaction completed in May 2016. For our 2016-A transaction and subsequent securitizations that are treated as on-balance sheet, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period of time) an “eligible horizontal residual interest” comprised of residual certificates representing at least five percent of the fair value of all ABS interests issued in the securitization transaction, determined as of the date of transfer. For any securitizations that are treated as off-balance sheet, including any loan sale transactions structured as securitizations, we comply with the Dodd-Frank risk retention rules by retaining (for a requisite period) an “eligible vertical interest” comprised of a five percent interest in each class of ABS interests issued in any such transaction; for future off-balance securitizations, we may comply with the Dodd-Frank risk retention rules in a different manner.

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Anti-Money Laundering, the USA PATRIOT Act, and U.S. Economic Sanctions

The Bank is subject to the reporting and recordkeeping requirements of the Bank Secrecy Act (“BSA”) and its implementing regulations. The BSA was amended by the USA PATRIOT Act of 2001, which substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and obligations, creating new crimes and penalties, and expanding the extra-territorial jurisdiction of the United States. The U.S. Treasury Department and federal banking regulators have issued a number of regulations that apply various requirements of the BSA to financial institutions such as the Bank. The BSA and its implementing regulations impose obligations on financial institutions to, among other things, maintain internal policies, procedures, and controls to detect, prevent and report money laundering and terrorist financing and to maintain programs to verify the identity of their customers, among other requirements. In addition, U.S. law generally prohibits or substantially restricts U.S. persons from doing business with countries and territories that are the subject of comprehensive territorial sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) or with persons that are the subject of sanctions administered by OFAC or other agencies. OFAC sanctions programs also impose other restrictions on certain investments and dealings. We maintain policies and procedures designed to ensure compliance with relevant U.S. laws and regulations applicable to U.S. persons, including the BSA, as amended, and its implementing regulations and U.S. economic sanctions.

Volcker Rule

The “Volcker Rule” provisions of the Dodd-Frank Act are implemented by rules issued by the U.S. banking agencies, the SEC, and the U.S. Commodity Futures Trading Commission that prohibit insured depository institutions and their affiliates from engaging in proprietary trading and from investing in, sponsoring, or having certain financial relationships with, certain private funds. These prohibitions are subject to a number of important exclusions and exemptions that, for example, permit insured depository institutions and their affiliates to trade for risk-mitigating hedging and liquidity management, subject to certain conditions and restrictions. The Volcker Rule does not have a meaningful effect on our current operations or those of our subsidiaries, as we do not materially engage in the businesses prohibited by the Volcker Rule.

Human Capital Resources and Talent Development

We believe in a mission-led culture that inspires commitment and drives performance. Our human capital strategy is focused on the attraction, development, empowerment, recognition, and rewarding of team members as they bring our mission to life.

As of December 31, 2025, we had approximately 1,788 team members, all located in the United States. We believe an engaged workforce leads to a more innovative, productive, and profitable company. For this reason, we measure employee engagement through culture surveys. These culture surveys provide insights we use to create an environment in which team members thrive and bring their full selves to work.

We strive to create a culture of belonging — an environment that encourages and reinforces mutual trust, makes it safe to express thoughts, ideas and concerns, and connects and embraces all backgrounds and perspectives to power and fuel our mission. We are focused on providing a total compensation package that enables us to attract, motivate, and retain the best possible talent to help drive our business forward. We believe in paying competitive market wages, and our benefits package includes Company contributions to the 401(k), educational assistance to our team members and their dependents, flexible work arrangements, and other comprehensive health and welfare programs.

We have made significant investments in learning and talent development, and provide team members with the tools and resources necessary to support their success and drive performance of the Company.

Our team members are involved in the communities in which they live and work through the Sallie Mae Employee Volunteer Program and the Sallie Mae Employee Matching Gift Program. In 2025, our team members donated approximately 3,447 hours through our community engagement programs. We also provide matching gifts for team members to support their interests and needs and those of their communities.

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