SLM (SLM) investor relations material

Strategic evolution, business model transformation, and market positioning

• Evolving strategy leverages PLUS reform and private credit partnerships for sustainable, asset-light growth and enhanced shareholder value.

• Expanded private student loan originations from $6.4B in 2023 to $7.0B in 2024, with market share rising from 55%+ to 60%+.

• Customer acquisition engine now reaches nearly 4 million new members annually, including about two-thirds of all college-bound freshmen and their parents, up 30% from three years ago.

• Proprietary underwriting and pricing models have improved portfolio quality, with higher FICO scores and cosign rates, reducing credit risk and earnings volatility.

• Returned $4.4B in capital to shareholders since 2020 through dividends and share repurchases, including $800 million in 2023-2024 and a 15% dividend increase in 2024.

PLUS reform, private credit partnerships, and growth opportunities

• Federal student lending reforms (H.R.1) signed in July 2025 will eliminate Grad PLUS loans, cap Parent PLUS loans, and expand unsubsidized Stafford loans, effective July 2026.

• PLUS program changes are expected to add $4.5–$5 billion in annual private loan originations, with readiness planning and new strategies underway.

• Private credit partnerships, such as the KKR agreement, enable capital-light, fee-based revenue streams, diversifying funding and reducing reliance on gain-on-sale margins.

• The private credit market presents a $50T+ total addressable market, supporting scalable, asset-light business models.

• Only the KKR partnership has been signed so far, with potential for additional partnerships in the future.

Financial framework, capital allocation, and outlook

• Transitioning to a dual model: maintaining a high-quality, bank-funded loan portfolio while developing asset-light, fee-based businesses through partnerships.

• Off-balance sheet loan distribution and partnerships are expected to generate recurring fee income, enhance capital efficiency, and reduce credit and market-driven volatility.

• Projected growth in private education loan originations (CAGR 14%), managed loan portfolio, and total revenue (CAGR 11%) over the next five years.

• Capital-light revenue growth is expected to fund investments in talent, products, and technology while maintaining disciplined expense management.

• The framework suggests potential capital generation of $2.5 billion for shareholder returns over five years, continuing a track record of buybacks and dividend increases.