SLM CorpSLM
SLM Corp Fair Value Disclosure
Fair Value Measurements
We use estimates of fair value in applying various accounting standards for the consolidated financial statements.
We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for determining fair value and the hierarchical framework, see Note 2, “Significant Accounting Policies — Fair Value Measurement” in this Form 10-K.
The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis.
| Fair Value Measurements on a Recurring Basis | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, (dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Trading investments | $ | — | $ | — | $ | 49,250 | $ | 49,250 | $ | — | $ | — | $ | 53,262 | $ | 53,262 | ||||||||||||||||||||||||||||||||||
| Available-for-sale investments | — | 1,756,178 | 1,892 | 1,758,070 | — | 1,930,537 | 2,689 | 1,933,226 | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | — | $ | 1,756,178 | $ | 51,142 | $ | 1,807,320 | $ | — | $ | 1,930,537 | $ | 55,951 | $ | 1,986,488 | ||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | (8) | $ | — | $ | (8) | $ | — | $ | (40) | $ | — | $ | (40) | |||||||||||||||||||||||||||||||||||
| Total | $ | — | $ | (8) | $ | — | $ | (8) | $ | — | $ | (40) | $ | — | $ | (40) | ||||||||||||||||||||||||||||||||||
The following table summarizes the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||
| Investments | Investments | |||||||||||||||||||||||||||||||||||||
| Years ended December 31, (dollars in thousands) | Available For Sale - Debt Securities | Trading - Residual Interests | Total | Available For Sale - Debt Securities | Trading - Residual Interests | Total | ||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 2,689 | $ | 53,262 | $ | 55,951 | $ | — | $ | 54,481 | $ | 54,481 | ||||||||||||||||||||||||||
| Total gains/(losses): | ||||||||||||||||||||||||||||||||||||||
Included in earnings (or changes in net assets)(1) | 21 | 97 | 118 | 20 | 478 | 498 | ||||||||||||||||||||||||||||||||
| (7) | — | (7) | 80 | — | 80 | |||||||||||||||||||||||||||||||||
| Settlements | (811) | (4,109) | (4,920) | 2,589 | (1,697) | 892 | ||||||||||||||||||||||||||||||||
| Transfers into level 3 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Transfers out of level 3 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Balance, end of period | $ | 1,892 | $ | 49,250 | $ | 51,142 | $ | 2,689 | $ | 53,262 | $ | 55,951 | ||||||||||||||||||||||||||
| Change in unrealized gains (losses) for the period included in other comprehensive income for assets held at the end of the reporting period | $ | (7) | $ | — | $ | (7) | $ | 80 | $ | — | $ | 80 | ||||||||||||||||||||||||||
| $ | — | $ | 97 | $ | 97 | $ | — | $ | 478 | $ | 478 | |||||||||||||||||||||||||||
(1) Included in earnings (or changes in net assets) is comprised of the amounts recorded in the specified line item in the consolidated statements of income:
| Years Ended December 31, (dollars in thousands) | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| $ | 21 | $ | 20 | |||||||||||
| 97 | 478 | |||||||||||||
| Total | $ | 118 | $ | 498 | ||||||||||
(2) Recorded in "gains (losses) on securities, net" in the consolidated statements of income.
The following table presents the significant unobservable inputs used in the recurring valuations of the level 3 financial instruments detailed above.
| As of December 31, 2025 (dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Average) | ||||||||||||||||||||||
| Debt securities | 1,892 | Discounted cash flow | Constant Prepayment Rate | 6.9%-11.0% (8.3%) | ||||||||||||||||||||||
| Probability of default | 4.4%-15.9% (11.4%) | |||||||||||||||||||||||||
| Residual interests | 49,250 | Discounted cash flow | Constant Prepayment Rate | 6.9%-11.0% (8.3%) | ||||||||||||||||||||||
| Probability of default | 4.4%-15.9% (11.4%) | |||||||||||||||||||||||||
| Total | $ | 51,142 | ||||||||||||||||||||||||
The significant inputs detailed in the above table would be expected to have the following impacts to the valuations:
•A decrease in CPR would result in a longer weighted average life of the trust, resulting in a decrease to the valuation due to the delay in residual cash flows with the increased term. The opposite is true for an increase in the CPR.
•A decrease in the probability of defaults means increased principal receipts, resulting in an increase to the valuation due to the increase in residual cash flow.
•Conversely, an increase in the probability of defaults means decreased principal receipts, resulting in a decrease to the valuation due to the decrease in residual cash flow.
The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.
| As of December 31, (dollars in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||
| Fair Value | Carrying Value | Difference | Fair Value | Carrying Value | Difference | |||||||||||||||||||||||||||||||||
| Earning assets: | ||||||||||||||||||||||||||||||||||||||
| Loans held for investment, net: | ||||||||||||||||||||||||||||||||||||||
| Private Education Loans | $ | 23,198,134 | $ | 20,332,124 | $ | 2,866,010 | $ | 24,110,381 | $ | 20,902,158 | $ | 3,208,223 | ||||||||||||||||||||||||||
| Loans held for sale | 947,078 | 933,256 | 13,822 | — | — | — | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 4,241,265 | 4,241,265 | — | 4,700,366 | 4,700,366 | — | ||||||||||||||||||||||||||||||||
| Trading investments | 49,250 | 49,250 | — | 53,262 | 53,262 | — | ||||||||||||||||||||||||||||||||
| Available-for-sale investments | 1,758,070 | 1,758,070 | — | 1,933,226 | 1,933,226 | — | ||||||||||||||||||||||||||||||||
| Accrued interest receivable | 1,662,640 | 1,562,811 | 99,829 | 1,663,474 | 1,546,590 | 116,884 | ||||||||||||||||||||||||||||||||
| Derivative instruments | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Total earning assets | $ | 31,856,437 | $ | 28,876,776 | $ | 2,979,661 | $ | 32,460,709 | $ | 29,135,602 | $ | 3,325,107 | ||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
| Money-market and savings accounts | $ | 11,187,471 | $ | 11,182,022 | $ | (5,449) | $ | 10,503,731 | $ | 10,526,324 | $ | 22,593 | ||||||||||||||||||||||||||
| Certificates of deposit | 9,830,811 | 9,877,945 | 47,134 | 10,593,666 | 10,540,428 | (53,238) | ||||||||||||||||||||||||||||||||
| Short-term borrowings | 489,802 | 498,415 | 8,613 | — | — | — | ||||||||||||||||||||||||||||||||
| Long-term borrowings | 5,376,909 | 5,362,494 | (14,415) | 6,323,384 | 6,440,345 | 116,961 | ||||||||||||||||||||||||||||||||
| Accrued interest payable | 97,524 | 97,524 | — | 108,488 | 108,488 | — | ||||||||||||||||||||||||||||||||
| Derivative instruments | 8 | 8 | — | 40 | 40 | — | ||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 26,982,525 | $ | 27,018,408 | $ | 35,883 | $ | 27,529,309 | $ | 27,615,625 | $ | 86,316 | ||||||||||||||||||||||||||
| Excess of net asset fair value over carrying value | $ | 3,015,544 | $ | 3,411,423 | ||||||||||||||||||||||||||||||||||
The methods and assumptions used to estimate the fair value of each class of financial instruments are as follows:
Cash and Cash Equivalents
Cash and cash equivalents are carried at cost. Carrying value approximated fair value for disclosure purposes. These are level 1 valuations.
Investments
Trading
Investments classified as trading are carried at fair value in the consolidated financial statements. Investments in residual class interests are valued using observable inputs in the cash flow modeling where available, but many significant inputs are unobservable. Residual interests are not exchange traded nor do they have quoted market prices, as they are unique and do not actively trade. As such, these are level 3 valuations.
Available-for-Sale
Investments classified as available-for-sale are carried at fair value in the consolidated financial statements. Investments in mortgage-backed securities, U.S. government-sponsored enterprises and Treasury securities, and Utah Housing Corporation bonds are valued using observable market prices of similar assets. As such, these are level 2 valuations. The fair value of most of our non-residual vertical risk retention investments is estimated using pricing indications obtained from the investment bankers who participate in the asset-backed securities market. As such, these
are level 2 valuations. Where we are unable to obtain pricing indications for our non-residual vertical risk retention investments, we classify them as level 3 valuations.
Loans Held For Investment and Accrued Interest Receivable
Private Education Loans & Loans Held for Sale
For Private Education Loans, fair value is estimated using an income approach that includes both observable market data and unobservable inputs consistent with the assumptions market participants would incorporate in an orderly transaction at the measurement date. For fully-disbursed loans, fair value is estimated based on recent market transactions and pricing for comparable loans with similar credit characteristics, remaining maturity, and contractual terms. These are considered level 2 valuations.
For not fully-disbursed loans, the fair value estimate reflects both the funded portion of the loan and the remaining contractual commitment to fund future disbursements. The funded portion of the loan is valued using observable market pricing for comparable fully-disbursed loans. The unfunded commitment is valued using a discounted cash flow methodology that incorporates the probability-weighted net present value of the expected future economic benefit of funding the remaining commitment and the estimated cost of capital associated with maintaining funding availability during the period prior to disbursement. These are considered level 3 valuations.
A portion of the fair value that has been modeled is attributable to accrued interest receivable that has not yet been capitalized, and has been allocated to the accrued interest receivable line item. The remaining accrued interest receivable that will not be capitalized into the principal balance of the loan is carried at cost.
Our loans held for sale are accounted for at the lower of cost or market. The loans classified as held for sale are newly originated and not fully-disbursed loans.
Money Market and Savings Accounts
Some of our MMDAs are fixed-rate deposits that are subject to minimum balances for a specified period of time. The fair values of these deposits are estimated using discounted cash flows based on rates currently offered for deposits of similar maturities. These are level 2 valuations. The fair values of our remaining money market and savings accounts equal the amounts payable on demand at the balance sheet date and are reported at their carrying value. These are level 2 valuations.
Certificates of Deposit
The fair values of CDs are estimated using discounted cash flows based on rates currently offered for deposits of similar remaining maturities. These are level 2 valuations.
Accrued Interest Payable
Accrued interest payable is carried at cost. The carrying value approximates fair value due to its short-term nature. This is a level 1 valuation.
Borrowings
Borrowings are accounted for at cost in the consolidated financial statements. The fair value of our short-term and long-term unsecured borrowings is sourced from quoted prices using a third-party pricing service. These are level 2 valuations. The fair value of long-term secured borrowings is estimated using pricing indications obtained from the investment bankers who participate in the asset-backed securities market. These are level 2 valuations.
Derivatives
All derivatives are accounted for at fair value in the consolidated financial statements. The fair value of derivative financial instruments was determined by a standard derivative pricing and option model using the stated terms of the contracts and observable market inputs. It is our policy to compare the derivative fair values to those received from our counterparties in order to evaluate the model’s outputs.
When determining the fair value of derivatives, we take into account counterparty credit risk for positions where we are exposed to the counterparty on a net basis by assessing exposure net of collateral held. When the counterparty has exposure to us under derivative contracts with the Company, we fully collateralize the exposure (subject to certain thresholds).
Interest rate swaps are valued using a standard derivative cash flow model with a SOFR swap yield curve, which is an observable input from an active market. These derivatives are level 2 fair value estimates in the hierarchy.
The carrying value of borrowings designated as the hedged item in a fair value hedge is adjusted for changes in fair value due to changes in the benchmark interest rate (SOFR). These valuations are determined through standard pricing models using the stated terms of the borrowings and observable yield curves.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.