SLM (SLM) Status Update summary

Strategic evolution, business model transformation, and market positioning

• Evolving strategy leverages PLUS reform and private credit partnerships to drive scalable, capital-light growth and diversify funding sources, with a dual model of bank-funded and asset-light, fee-based businesses.

• Proprietary underwriting and pricing models, enhanced standards, and robust customer acquisition underpin a resilient, growth-oriented platform, with higher FICO scores and cosign rates reducing credit risk.

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

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

• Achieved strong total shareholder return, outperforming key indices over multiple timeframes.

PLUS reform, private credit partnerships, and market 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.

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

• Strategic partnership with KKR enables a capital-light, fee-based revenue model, complementing bank and loan sale strategies, with only one partnership signed to date and plans for expansion.

• Private credit market growth presents a $50T+ total addressable market, supporting scalable originations and diversified revenue.

• Transition to partnership-driven loan sales will initially cause a modest EPS decline, but is expected to drive high single- to double-digit EPS growth in years two to five.

Financial framework, capital allocation, and outlook

• Illustrative five-year scenarios assume 5% baseline market growth, with originations CAGR of 14% and revenue CAGR of 11%, and accelerated growth during PLUS reform phase-in.

• Gradual shift from traditional spot loan sales to two-thirds of volume sold through strategic partnerships, improving revenue quality and durability.

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

• Capital-light revenue growth funds investments in talent, products, and marketing, while maintaining disciplined expense management and supporting continued capital returns.

• Framework suggests potential to generate $2.5 billion for shareholder returns over five years, continuing a track record of buybacks and dividend increases.