Form 8-K
8-K — Navient Holdings, Inc.
Accession: 0001193125-26-447477
Filed: 2026-11-04
Period: 2026-11-04
CIK: 0002152623
SIC: 6211 (SECURITY BROKERS, DEALERS & FLOTATION COMPANIES)
Item: Results of Operations and Financial Condition
Item: Financial Statements and Exhibits
Documents
8-K — navi-20261104.htm (Primary)
EX-99.1 (navi-ex99_1.htm)
EX-99.2 (navi-ex99_2.htm)
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GRAPHIC (img70098304_0.jpg)
GRAPHIC (img70098304_1.jpg)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
Filename: navi-20261104.htm · Sequence: 1
8-K
0002152623false00021526232026-11-042026-11-04
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 04, 2026
Navient Holdings, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware
001-43525
46-4054283
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
13865 Sunrise Valley Drive
Herndon, Virginia
20171
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code: 302 283-8000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, par value $.01 per share
NAVI
The Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On November 4, 2026, Navient Holdings, Inc. (the “Company”) issued an informational press release announcing its financial results for the quarter ended September 30, 2026 were available on the “Investor” page of its website located at https://www.Navient.com/investors. Additionally, on November 4, 2026, the Company posted its financial results for the quarter ended September 30, 2026 to its above-referenced web location. A copy of each press release is furnished as Exhibit 99.1 and Exhibit 99.2 hereto.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit
Number
Description
99.1*
Press Release, dated November 4, 2026.
99.2*
Financial Press Release, dated November 4, 2026.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NAVIENT HOLDINGS, INC.
Date: November 4, 2026
By:
/s/ STEVE HAUBER
Steve Hauber
Chief Financial Officer
EX-99.1
EX-99.1
Filename: navi-ex99_1.htm · Sequence: 2
EX-99.1
Exhibit 99.1
NEWS RELEASE
For immediate release
Navient posts third quarter 2026 financial results
HERNDON, Va., Nov. 4, 2026— Navient (Nasdaq: NAVI) today posted its 2026 third quarter financial results. Complete financial results are available on the company’s website at Navient.com/investors. The materials will also be available on a Form 8-K on the SEC’s website at www.sec.gov.
Navient will hold a live audio webcast today, Nov. 4, 2026, at 5 p.m. ET, hosted by Edward Bramson, CEO and chair of the board, and Steve Hauber, CFO.
The webcast will be available on Navient.com/investors. Supplemental financial information and presentation slides used during the call will be available no later than the start time. A replay of the webcast will be available shortly after the event's conclusion.
* * *
About Navient
Navient (Nasdaq: NAVI) creates long-term value for customers and investors with responsible lending, flexible refinancing, trusted servicing oversight, and decades of education finance and portfolio management expertise. Through our Earnest business, we help customers confidently achieve financial success through digital financial services. Our employees thrive in a culture of belonging, where they are supported and proud to deliver meaningful outcomes. Learn more on Navient.com.
Contact:
Media: Cate Fitzgerald, 703-831-6347, catherine.fitzgerald@navient.com
Investors: Micah Andrews, 571-415-5413, micah.andrews@navient.com
Roger Yankoupe, 571-592-8569, roger.yankoupe@navient.com
# # #
EX-99.2
EX-99.2
Filename: navi-ex99_2.htm · Sequence: 3
EX-99.2
Exhibit 99.2
NAVIENT REPORTS THIRD-QUARTER
2026 FINANCIAL RESULTS
HERNDON, Va., November 4, 2026 — Navient (Nasdaq: NAVI) today announced third-quarter 2026 net income of $15 million ($0.16 per diluted share) on a GAAP basis.
Earnings for the period included derivative hedging gains and a tax benefit aggregating $12 million on an after-tax basis ($0.13 per diluted share). Navient’s definition of Core Earnings excludes these items and, accordingly, Core Earnings(1) for the period were $3 million ($0.03 per diluted share).
Earnings in the quarter were increased by $23 million ($0.18 per diluted share) as a result of a net fair value increase from applying the fair value option to In-School Loans originated in the quarter and were reduced by loan loss provisions on newly originated Refinance Loans and Personal Loans in the quarter of $16 million ($0.13 per diluted share).
Loan originations for the third quarter, under the Earnest brand, were $1.4 billion, an increase of 77% from the third quarter of the prior year. Third-quarter 2026 originations included $46 million of Personal Loans resulting from Earnest’s continuing test program for this new product, versus no originations in the prior year as the Personal Loan product was launched in the fourth quarter of 2025. Refinance Loan originations in the quarter were $870 million and In-School Loan originations were $479 million, resulting in increases of 65% and 84%, respectively, versus the prior year period.
Average FICO scores for Personal Loans, Refinance Loans and In-School Loans in the quarter were 768, 775, and 770, respectively, reflecting the company’s strategy since 2024 to focus on originating loans to higher credit quality borrowers.
Net income and earnings per diluted share reported for the third quarter 2026 include a number of significant items. These significant items, set forth below, resulted in a net reduction in pre-tax earnings of $34 million ($0.27 per diluted share) and apply both to GAAP and Core Earnings.
PORTFOLIO OPTIMIZATION
$162 million ($1.31 per diluted share) of gains from the sale of approximately $750 million of Legacy Private Education Loans. This gain includes $91 million ($0.73 per diluted share) relating to an original acquisition discount on these loans.
$29 million ($0.23 per diluted share) net reduction in the fair value (reflected in provision for loan losses) of approximately $1.4 billion of Legacy Private Education Loans as a result of classifying them as held for sale as of September 30, 2026. The company had established an allowance for loan losses in the amount of $92 million for these loans.
CHANGES IN LOAN LOSS RESERVES (excluding allowance for loan losses on newly originated loans)
$42 million ($0.34 per diluted share) benefit from the release of allowance for loan losses related to classifying approximately $1.0 billion of In-School Loans as held for sale at September 30, 2026.
$178 million ($1.44 per diluted share) of provision for loan losses for Legacy Private Education Loans primarily related to recent and forecasted delinquencies and charge-offs persisting at elevated levels for a longer duration than previously anticipated.
$33 million ($0.27 per diluted share) of provision for loan losses for Refinance Loans. These principally relate to loans originated prior to the change in credit policy for such loan originations beginning in 2024.
$13 million ($0.10 per diluted share) of provision for loan losses for the FFELP government-guaranteed portfolio. This is primarily the result of an increase in premium allocated to future defaults, as well as the continued extension of the portfolio.
(1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures” on pages 18 – 28.
OTHER ITEMS
$15 million ($0.12 per diluted share) benefit, principally from the receipt of insurance proceeds related to prior litigation.
Financial statements for the quarter are attached to this release.
Commenting on the results, Edward Bramson, CEO and chair of the board of directors, said, “These results continue Navient’s trend of growing originations while maintaining high credit quality. During the quarter, we also made further progress in diversifying our origination mix by increasing the proportion of In-School and Personal Loans. We continued the transition of our loan portfolios toward more market-based measures, classifying approximately $2.4 billion of additional loans as held for sale and electing the fair value option for newly originated In-School Loans. We also sold approximately $750 million of Legacy Private Education Loans at a gain as part of our ongoing portfolio optimization strategy. We are evaluating additional loan sales as we continue to optimize the portfolio and reallocate capital toward more strategic uses.”
Navient will hold a live audio webcast today, November 4, 2026, at 5 p.m. ET, hosted by Edward Bramson, CEO and chair of the board, and Steve Hauber, CFO. The webcast will be available on Navient.com/investors. Supplemental financial information and presentation slides used during the call will be available no later than the start time. A replay of the webcast will be available shortly after the event’s conclusion.
Definitions for capitalized terms in this release can be found in Navient’s Annual Report on Form 10-K for the year ended December 31, 2025 (filed with the SEC on February 26, 2026).
This news release contains “forward-looking statements,” within the meaning of the federal securities law, about our business and prospectus and other information that is based on management’s current expectations as of the date of this release.
Statements that are not historical facts, including statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements and often contain words such as “expect,” “assume,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “may,” “could,” “should,” “goals,” or “target.” Such statements are based on management’s expectations as of the date of this release and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. For Navient, these factors include, among other things: general economic conditions, including the potential impact of artificial intelligence, inflation and interest rates on Navient and its clients and customers and on the creditworthiness of third parties; increased defaults on education loans held by us; unanticipated repayment trends on education loans including prepayments or deferrals resulting from new interpretations or the timing of the execution and implementation of current laws, rules or
regulations or future laws, executive orders or other policy initiatives that operate to encourage or require consolidation, abolish existing or create additional income-based repayment or debt forgiveness programs or establish other policies and programs which may increase or decrease the prepayment rates on education loans and accelerate or slow down the repayment of the bonds in our securitization trusts; a reduction in our credit ratings; changes to applicable laws, rules, regulations and government policies, as well as changing regulatory and governmental oversight; changes in the general interest rate environment, including the availability of any relevant money-market index rate or the relationship between the relevant money-market index rate and the rate at which our assets are priced; the interest rate characteristics of our assets do not always match those of our funding arrangements; adverse market conditions or an inability to effectively manage our liquidity risk or access liquidity could negatively impact us; the cost and availability of funding in the capital markets; our ability to earn Floor Income and our ability to enter into hedges relative to that Floor Income are dependent on the future interest rate environment and therefore are variable; our use of derivatives exposes us to credit and market risk; our ability to continually and effectively align our cost structure with our business operations; a failure or breach of our operating systems, infrastructure or information technology systems; failure by any third party providing us material services or products or a breach or violation of law by one of these third parties; acquisitions, new products, strategic initiatives and investments or divestitures that we pursue; shareholder activism; reputational risk and social factors; and the other factors that are described in the “Risk Factors” section of Navient’s Annual Report on Form 10-K for the year ended December 31, 2025, and in our other reports filed with the Securities and Exchange Commission. The preparation of our consolidated financial statements also requires management to make certain estimates and assumptions including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect and actual results could differ materially. All forward-looking statements contained in this release are qualified by these cautionary statements and are made only as of the date of this release. The company does not undertake any obligation to update or revise these forward-looking statements except as required by law.
* * *
2
About Navient
Navient (Nasdaq: NAVI) creates long-term value for customers and investors with responsible lending, flexible refinancing, trusted servicing oversight, and decades of education finance and portfolio management expertise. Through our Earnest business, we help customers confidently achieve financial success through digital financial services. Our employees thrive in a culture of belonging, where they are supported and proud to deliver meaningful outcomes. Learn more on Navient.com.
Contact:
Media: Cate Fitzgerald, 703-831-6347, catherine.fitzgerald@navient.com
Investors: Micah Andrews, 571-415-5413, micah.andrews@navient.com
Roger Yankoupe, 571-592-8569, roger.yankoupe@navient.com
# # #
3
SEGMENT RESULTS — CORE EARNINGS
CONSUMER LENDING
In this segment, Navient owns and manages a portfolio of Consumer Loans. Through our Earnest brand, we also originate and refinance Consumer Loans.
FINANCIAL RESULTS AND KEY PERFORMANCE METRICS
(Dollars in millions)
3Q26
2Q26
3Q25
Net interest income
$
87
$
93
$
98
Less: Provision for loan losses
214
18
155
Gains on sales of loans
162
—
—
Net fair value changes of loans
23
—
—
Other revenue
2
2
3
Total revenue
60
77
(54
)
Expenses
57
42
45
Pre-tax income
3
35
(99
)
Net income
$
2
$
27
$
(76
)
Segment net interest margin
2.09
%
2.26
%
2.39
%
Private Education Loans (including Refinance Education Loans):
Private Education Loan spread
2.20
%
2.38
%
2.48
%
Provision for loan losses
$
210
$
17
$
155
Net charge-offs
$
59
$
71
$
96
Net charge-off rate (1)
1.49
%
1.84
%
2.50
%
Greater than 30-days delinquency rate (1)
5.1
%
5.4
%
6.1
%
Greater than 90-days delinquency rate (1)
2.2
%
2.4
%
2.8
%
Forbearance rate (1)
1.9
%
1.8
%
1.5
%
Average Private Education Loans
$
15,980
$
15,985
$
15,894
Ending Private Education Loans, net
$
15,254
$
15,674
$
15,456
Refinance Education Loans:
Net charge-offs
$
16
$
18
$
19
Greater than 90-day delinquency rate
.7
%
.8
%
.8
%
Average Refinance Education Loans
$
9,575
$
9,271
$
8,649
Ending Refinance Education Loans, net
$
9,600
$
9,258
$
8,571
Refinance Education Loan originations
$
870
$
735
$
528
Personal Loans:
Originations
$
46
$
15
$
—
Ending balance, net
$
61
$
20
$
—
(1) Third-quarter 2026 excludes $2.4 billion of Private Education Loans that were classified as held for sale as of September 30, 2026 and $235 million of In-
School Private Education Loans carried at fair value, and their corresponding delinquencies, forbearances and charge-offs. Second-quarter 2026 excludes $528
million of Legacy Private Education Loans that were classified as held for sale as of June 30, 2026, and their corresponding delinquencies, forbearances and
charge-offs.
DISCUSSION OF RESULTS — 3Q26 vs. 3Q25
•
Originated $1.4 billion of Consumer Loans, a 77% increase compared to $788 million.
o
Refinance Education Loan originations were $870 million compared to $528 million.
o
In-School Education Loan originations were $479 million compared to $260 million.
o
Personal Loan originations were $46 million compared to $0 million.
•
Net income was $2 million compared to net loss of $76 million.
•
Net interest income decreased $11 million, primarily due to the changing product mix with Refinance Education Loans increasing as a percentage of the portfolio. The Refinance Education Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin.
•
Provision for loan losses increased $59 million. The provision for loan losses of $214 million in the current quarter included $16 million associated with loan originations and $29 million a result of classifying $1.4 billion of Legacy Private Education Loans as held for sale as of September 30, 2026. An additional $211 million of provision in the current quarter primarily relates to recent and forecasted delinquencies and charge-offs persisting at elevated levels for a longer duration than previously anticipated. This was partially offset by a $42 million decrease as a result of classifying $1.0 billion of In-School Education Loans as held for sale as of September 30, 2026. The
4
provision for loan losses of $155 million in the year-ago quarter included $17 million associated with loan originations and $138 million primarily the result of elevated delinquency balances as well as our forecasted macroeconomic outlook.
o
Net charge-offs were $59 million, down $37 million compared to $96 million in the year-ago quarter.
o
Private Education Loan delinquencies greater than 90 days: $274 million, down $159 million from $433 million.
o
Private Education Loan forbearances: $244 million, up $5 million from $239 million.
•
There were $162 million of gains on sale in the current period related to the sale of $750 million of Legacy Private Education Loans in connection with our broader effort to redeploy capital and align our balance sheet with today's lending products. There were no sales in the year-ago period.
•
There were $23 million of net fair value changes of loans related to electing the fair value option for In-School Education Loan originations beginning July 1, 2026. Of the $23 million net fair value changes of loans, $11 million relates to loans disbursed and recorded as loans on our balance sheet and $12 million relates to loan commitments to be disbursed in a future period (with the fair value of the lending commitment recorded in Other Assets on our balance sheet).
•
Expenses increased $12 million primarily reflecting seasonal marketing and other expenses associated with the growth of our consumer lending businesses.
FEDERAL EDUCATION LOANS
In this segment, Navient owns and manages a portfolio of FFELP federally guaranteed student loans.
FINANCIAL RESULTS AND KEY PERFORMANCE METRICS
(Dollars in millions)
3Q26
2Q26
3Q25
Net interest income
$
47
$
48
$
65
Less: Provision for loan losses
13
8
13
Other revenue
8
8
10
Total revenue
42
48
62
Expenses
13
15
16
Pre-tax income
29
33
46
Net income
$
22
$
26
$
35
Segment net interest margin
.69
%
.68
%
.84
%
FFELP Loans:
FFELP Loan spread
.76
%
.76
%
.90
%
Provision for loan losses
$
13
$
8
$
13
Net charge-offs
$
11
$
10
$
9
Net charge-off rate
.20
%
.18
%
.15
%
Greater than 30-days delinquency rate
15.5
%
14.7
%
18.1
%
Greater than 90-days delinquency rate
8.0
%
8.0
%
10.5
%
Forbearance rate
12.4
%
12.8
%
13.4
%
Average FFELP Loans
$
26,364
$
27,045
$
29,641
Ending FFELP Loans, net
$
25,898
$
26,575
$
28,952
DISCUSSION OF RESULTS — 3Q26 vs. 3Q25
•
Net income was $22 million compared to $35 million.
•
Net interest income decreased $18 million primarily due to an $18 million benefit (reduced premium amortization) in the year-ago period from a decrease in prepayment rate assumptions as well as the paydown of the loan portfolio.
•
Provision for loan losses remained unchanged at $13 million. The provision for loan losses of $13 million in the current period was primarily the result of an increase in premium allocated to future defaults, as well as the continued extension of the portfolio. The $13 million of provision for loan losses in the year-ago quarter was primarily the result of elevated delinquency balances, our forecasted macroeconomic outlook as well as the continued extension of the portfolio.
o
Net charge-offs were $11 million compared to $9 million.
o
Delinquencies greater than 90 days were $1.7 billion compared to $2.5 billion.
o
Forbearances were $3.1 billion compared to $3.7 billion.
•
Expenses were $3 million lower primarily as a result of the outsourcing of the loan servicing of our portfolio to a third party in 2024. This created a variable cost structure resulting in a reduction in expenses as the portfolio paid down.
5
SELECTED HISTORICAL FINANCIAL INFORMATION AND RATIOS
QUARTERS ENDED
NINE MONTHS ENDED
(In millions, except per share data)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
GAAP Basis
Net income
$
15
$
25
$
(86
)
$
56
$
(75
)
Diluted earnings per common share
$
.16
$
.26
$
(.87
)
$
.59
$
(.75
)
Weighted average shares used to compute
diluted earnings per share
94
95
98
95
100
Return on assets
.13
%
.22
%
(.72
)%
.17
%
(.21
)%
Core Earnings Basis(1)
Net income(1)
$
3
$
27
$
(83
)
$
50
$
(36
)
Diluted earnings per common share(1)
$
.03
$
.29
$
(.84
)
$
.52
$
(.36
)
Weighted average shares used to compute
diluted earnings per share
94
95
98
95
100
Net interest margin, Consumer Lending
segment
2.09
%
2.26
%
2.39
%
2.27
%
2.48
%
Net interest margin, Federal Education Loans
segment
.69
%
.68
%
.84
%
.67
%
.72
%
Return on assets
.03
%
.24
%
(.69
)%
.15
%
(.10
)%
Education Loan Portfolios
Ending Private Education Loans, net
$
15,254
$
15,674
$
15,456
15,254
15,456
Ending FFELP Loans, net
25,898
26,575
28,952
$
25,898
$
28,952
Ending total education loans, net
$
41,152
$
42,249
$
44,408
$
41,152
$
44,408
Average Private Education Loans
$
15,980
$
15,985
$
15,894
15,974
16,014
Average FFELP Loans
26,364
27,045
29,641
$
27,097
$
30,289
Average total education loans
$
42,344
$
43,030
$
45,535
$
43,071
$
46,303
(1) Item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures” on pages 18 – 28.
6
RESULTS OF OPERATIONS
We present the results of operations below first in accordance with GAAP. Following our discussion of earnings results on a GAAP basis, we present our results on a segment basis. We have three reportable operating segments as of September 30, 2026: Consumer Lending, Federal Education Loans and Other. Prior to the divestiture of our healthcare business in third-quarter 2024 and our government services business in first-quarter 2025, we had a fourth reportable operating segment, Business Processing. Our segments operate in distinct business environments and we manage and evaluate the financial performance of our segments using non-GAAP financial measures we call Core Earnings (see “Non-GAAP Financial Measures — Core Earnings” for further discussion).
GAAP INCOME STATEMENTS (UNAUDITED)
September 30, 2026
vs.
June 30, 2026
September 30, 2026
vs.
September 30, 2025
QUARTERS ENDED
Increase
(Decrease)
Increase
(Decrease)
(In millions, except per share data)
September 30, 2026
June 30, 2026
September 30, 2025
$
%
$
%
Interest income
Private Education Loans
$
270
$
273
$
276
$
(3
)
(1
)%
$
(6
)
(2
)%
FFELP Loans
381
391
484
(10
)
(3
)
(103
)
(21
)
Personal Loans
1
—
—
1
100
1
100
Cash and investments
17
18
21
(1
)
(6
)
(4
)
(19
)
Total interest income
669
682
781
(13
)
(2
)
(112
)
(14
)
Total interest expense
554
560
639
(6
)
(1
)
(85
)
(13
)
Net interest income
115
122
142
(7
)
(6
)
(27
)
(19
)
Less: provisions for loan losses
227
26
168
201
773
59
35
Net interest income (loss) after
provisions for loan losses
(112
)
96
(26
)
(208
)
(217
)
(86
)
(331
)
Other income (loss):
Servicing revenue
10
10
13
—
—
(3
)
(23
)
Other income
2
17
10
(15
)
(88
)
(8
)
(80
)
Gains on sales of loans
162
—
—
162
100
162
100
Net fair value changes of loans
23
—
—
23
100
23
100
Gains (losses) on derivative
and hedging activities, net
5
1
(4
)
4
400
9
225
Total other income
202
28
19
174
621
183
963
Expenses:
Operating expenses
75
82
105
(7
)
(9
)
(30
)
(29
)
Goodwill and acquired
intangible asset
impairment and
amortization expense
—
—
1
—
—
(1
)
(100
)
Restructuring/other
reorganization expenses
2
3
4
(1
)
(33
)
(2
)
(50
)
Total expenses
77
85
110
(8
)
(9
)
(33
)
(30
)
Income (loss) before income tax
expense
13
39
(117
)
(26
)
(67
)
130
111
Income tax expense (benefit)
(2
)
14
(31
)
(16
)
(114
)
29
94
Net income (loss)
$
15
$
25
$
(86
)
$
(10
)
(40
)%
$
101
117
%
Basic earnings (loss) per
common share
$
.16
$
.27
$
(.87
)
$
(.11
)
(41
)%
$
1.03
118
%
Diluted earnings (loss) per
common share
$
.16
$
.26
$
(.87
)
$
(.10
)
(38
)%
$
1.03
118
%
Dividends per common share
$
.16
$
.16
$
.16
$
—
—
%
$
—
—
%
7
NINE MONTHS ENDED
September 30,
Increase
(Decrease)
(In millions, except per share data)
2026
2025
$
%
Interest income
Private Education Loans
$
820
$
838
$
(18
)
(2
)%
FFELP Loans
1,173
1,459
(286
)
(20
)
Personal Loans
1
—
1
100
Cash and investments
51
64
(13
)
(20
)
Total interest income
2,045
2,361
(316
)
(13
)
Total interest expense
1,677
1,961
(284
)
(14
)
Net interest income
368
400
(32
)
(8
)
Less: provisions for loan losses
281
236
45
19
Net interest income after
provisions for loan losses
87
164
(77
)
(47
)
Other income (loss):
Servicing revenue
31
40
(9
)
(23
)
Asset recovery and business
processing revenue
—
23
(23
)
(100
)
Other income
23
44
(21
)
(48
)
Gains on sales of loans
162
—
162
100
Net fair value changes of loans
23
—
23
100
Gains (losses) on derivative and
hedging activities, net
11
(34
)
45
132
Total other income
250
73
177
242
Expenses:
Operating expenses
246
333
(87
)
(26
)
Goodwill and acquired intangible
assets impairment and
amortization expense
5
2
3
150
Restructuring/other
reorganization expenses
4
6
(2
)
(33
)
Total expenses
255
341
(86
)
(25
)
Income (loss) before income tax expense
82
(104
)
186
179
Income tax expense (benefit)
26
(29
)
55
190
Net income (loss)
$
56
$
(75
)
$
131
175
%
Basic earnings (loss) per
common share
$
.60
$
(.75
)
$
1.35
180
%
Diluted earnings (loss) per
common share
$
.59
$
(.75
)
$
1.34
179
%
Dividends per common share
$
.48
$
.48
$
—
—
%
8
GAAP BALANCE SHEETS (UNAUDITED)
(In millions, except per share data)
September 30, 2026
June 30, 2026
September 30, 2025
Assets
Private Education Loans at amortized cost (net of allowance for
loan losses of $299, $263 and $406, respectively)
$
12,680
$
15,146
$
15,456
Private Education Loans at fair value
235
—
—
Private Education Loans held for sale
2,339
528
—
FFELP Loans at amortized cost (net of allowance for loan losses
of $165, $163 and $186, respectively)
25,898
26,575
28,952
Investments
146
116
147
Cash and cash equivalents
701
770
571
Restricted cash and cash equivalents
1,286
1,369
1,301
Goodwill and acquired intangible assets, net
430
430
435
Other assets
2,413
2,363
2,444
Total assets
$
46,128
$
47,297
$
49,306
Liabilities
Short-term borrowings
$
5,751
$
4,214
$
4,920
Long-term borrowings
37,429
40,123
41,414
Other liabilities
513
562
533
Total liabilities
43,693
44,899
46,867
Commitments and contingencies
Equity
Series A Junior Participating Preferred Stock, par value $0.20 per share;
2 million shares authorized at December 31, 2021; no shares issued
or outstanding
—
—
—
Common stock, par value $0.01 per share; 1.125 billion shares
authorized: 468 million, 468 million and 467 million shares,
respectively, issued
4
4
4
Additional paid-in capital
3,411
3,410
3,398
Accumulated other comprehensive income, net of tax
60
14
(1
)
Retained earnings
4,562
4,562
4,573
Total stockholders’ equity before treasury stock
8,037
7,990
7,974
Less: Common stock held in treasury at cost: 375 million,
374 million and 369 million shares, respectively
(5,602
)
(5,592
)
(5,535
)
Total equity
2,435
2,398
2,439
Total liabilities and equity
$
46,128
$
47,297
$
49,306
9
GAAP COMPARISON OF 2026 RESULTS WITH 2025
Three Months Ended September 30, 2026 Compared with Three Months Ended September 30, 2025
For the three months ended September 30, 2026, net income was $15 million, or $0.16 per diluted share, compared with net loss of $86 million, or $0.87 per diluted share, for the year-ago period.
The primary contributors to the change in net income are as follows:
• Net interest income decreased by $27 million primarily due to an $18 million benefit in the year-ago period from a decrease in prepayment rate assumptions on FFELP Loans (reduced premium amortization) as well as the paydown of the FFELP portfolio and the Private Education Loan portfolio's changing product mix with Refinance Education Loans increasing as a percentage of the portfolio. The Refinance Education Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin.
• Provisions for loan losses increased $59 million from $168 million to $227 million.
○ The provision for Private Loan losses increased $59 million from $155 million to $214 million.
○ The provision for FFELP Loan losses remained unchanged at $13 million.
The provision for Private Loan losses of $214 million in the current quarter included $16 million associated with loan originations and $29 million a result of classifying $1.4 billion of Legacy Private Education Loans as held for sale as of September 30, 2026. An additional $211 million of provision in the current quarter primarily relates to recent and forecasted delinquencies and charge-offs persisting at elevated levels for a longer duration than previously anticipated. This was partially offset by a $42 million decrease as a result of classifying $1.0 billion of In-School Education Loans as held for sale as of September 30, 2026. The provision for loan losses of $155 million in the year-ago quarter included $17 million associated with loan originations and $138 million primarily the result of elevated delinquency balances as well as our forecasted macroeconomic outlook.
The provision for FFELP Loan losses of $13 million in the current period was primarily the result of an increase in premium allocated to future defaults, as well as the continued extension of the portfolio. The provision of $13 million in the year-ago quarter was primarily the result of an increase in delinquency balances, our forecasted macroeconomic outlook, as well as the continued extension of the portfolio.
• Other income decreased $8 million primarily related to a $7 million decrease in transition services revenue we had earned 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.
• There were $162 million of gains on sale in the current period related to the sale of $750 million of Legacy Private Education Loans in connection with our broader effort to redeploy capital and align our balance sheet with today's lending products. There were no sales in the year-ago period.
• There were $23 million of net fair value changes of loans related to electing the fair value option for In-School Education Loan originations beginning July 1, 2026. Of the $23 million net fair value changes of loans, $11 million relates to loans disbursed and recorded as loans on our balance sheet and $12 million relates to loan commitments to be disbursed in a future period (with the fair value of the lending commitment recorded in Other Assets on our balance sheet). Valuations of education loans fluctuate based upon many factors including changes in prepayment rates, loss rates and discount rates. As a result, net fair value changes of loans may vary significantly in future periods.
• Net gains on derivative and hedging activities increased $9 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 $30 million, $7 million of which was due to a 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 also a $16 million decrease in regulatory-related expenses primarily related to a $16 million benefit in the current period due to insurance proceeds received in connection with prior litigation matters. These decreases were offset by a $12 million increase in seasonal marketing and other expenses associated with the growth of our consumer lending businesses. The remaining $19 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 $2 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 quarters were (18)% and 27%, respectively. The decrease in the effective income tax rate in the current quarter is due to changes in the valuation allowance attributed to state operating loss carryovers.
We repurchased 1.1 million and 2.0 million shares of our common stock during the third quarters of 2026 and 2025, respectively. As a result of repurchases, our average outstanding diluted shares decreased by 4 million common shares (or 4%) from the year-ago period.
10
Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025
For the nine months ended September 30, 2026, net income was $56 million, or $0.59 per diluted share, compared with net loss of $75 million, or $0.75 per diluted share, for the year-ago period.
The primary contributors to the change in net income are as follows:
• Net interest income decreased by $32 million primarily due to the paydown of the FFELP portfolio and the Private Education Loan portfolio's changing product mix with Refinance Education Loans increasing as a percentage of the portfolio. The Refinance Education Loan portfolio earns a lower net interest margin compared to the non-refinance portfolio, due to lower expected credit losses, which reduces the overall net interest margin. In addition, there was an $18 million benefit in the year-ago period from a decrease in prepayment rate assumptions on FFELP Loans (reduced premium amortization). This was partially offset by a $21 million increase in mark-to-market gains on fair value hedges recorded in interest expense.
• Provisions for loan losses increased $45 million from $236 million to $281 million.
○ The provision for Private Loan losses increased $44 million from $207 million to $251 million.
○ The provision for FFELP Loan losses increased $1 million from $29 million to $30 million.
The provision for Private Loan losses of $251 million in the current period included $42 million associated with loan originations and $10 million a result of classifying $2.0 billion of Legacy Private Education Loans as held for sale during the period. An additional $241 million of provision in the current period primarily relates to recent and forecasted delinquencies and charge-offs persisting at elevated levels for a longer duration than previously anticipated. This was partially offset by a $42 million decrease as a result of classifying $1.0 billion of In-School Education Loans as held for sale as of September 30, 2026. The provision of $207 million in the year-ago period included $32 million associated with loan originations and $175 million primarily the result of elevated delinquency balances as well as our forecasted macroeconomic outlook.
The provision for FFELP Loan losses of $30 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 $29 million in the year-ago period was primarily the result of an increase in delinquency balances, our forecasted macroeconomic outlook, as well as the continued extension of the portfolio.
• 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 $21 million primarily related to a $32 million decrease in transition services revenue we had earned 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. This $32 million decrease was partially offset by a $12 million gain on an investment in the current period.
• There were $162 million of gains on sale in the current period related to the sale of $750 million of Legacy Private Education Loans in connection with our broader effort to redeploy capital and align our balance sheet with today's lending products. There were no sales in the year-ago period.
• There were $23 million of net fair value changes of loans related to electing the fair value option accounting model for In-School Education Loan originations beginning July 1, 2026. Of the $23 million net fair value changes of loans, $11 million relates to loans disbursed and recorded as loans on our balance sheet and $12 million relates to loan commitments to be disbursed in a future period (with the fair value of the lending commitment recorded in Other Assets on our balance sheet). Valuations of education loans fluctuate based upon many factors including changes in prepayment rates, loss rates and discount rates. As a result, net fair value changes of loans may vary significantly in future periods.
• Net gains on derivative and hedging activities increased $45 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 $87 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 a $30 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 also a $17 million decrease in regulatory-related expenses primarily related to a $16 million benefit in the current period due to insurance proceeds received in connection with prior litigation matters. These decreases were offset by a $23 million increase in marketing and other expenses associated with the growth of our consumer lending businesses. The remaining $40 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 $2 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.
We repurchased 3.7 million and 6.4 million shares of our common stock during the nine months ended September 30, 2026 and September 30, 2025, respectively. As a result of repurchases, our average outstanding diluted shares decreased by 5 million common shares (or 5%) from the year-ago period.
11
PRIVATE EDUCATION LOANS PORTFOLIO PERFORMANCE
Private Education Loan Delinquencies and Forbearance
September 30,
June 30,
September 30,
2026
2026
2025
(Dollars in millions)
Balance
%
Balance
%
Balance
%
Loans in-school/grace/deferment(1)
$
216
$
357
$
402
Loans in forbearance(2)
244
271
239
Loans in repayment and percentage
of each status:
Loans current
11,881
94.9
%
13,985
94.6
%
14,291
93.9
%
Loans delinquent 31-60 days(3)
233
1.9
279
1.9
315
2.1
Loans delinquent 61-90 days(3)
131
1.0
168
1.1
182
1.2
Loans delinquent greater than
90 days(3)
274
2.2
349
2.4
433
2.8
Total Private Education Loans in
repayment
12,519
100
%
14,781
100
%
15,221
100
%
Total Private Education Loans, gross (5)
12,979
15,409
15,862
Private Education Loan allowance for
loan losses
(299
)
(263
)
(406
)
Private Education Loans, net
$
12,680
$
15,146
$
15,456
Percentage of Private Education
Loans in repayment
96.5
%
95.9
%
96.0
%
Delinquencies as a percentage of
Private Education Loans in
repayment
5.1
%
5.4
%
6.1
%
Loans in forbearance as a percentage
of loans in repayment and
forbearance
1.9
%
1.8
%
1.5
%
Percentage of Private Education
Loans with a cosigner(4)
21
%
29
%
32
%
(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 extension of 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 Refinance Education Loans, the cosigner rate was 65%, 66% and 67% for third-quarter 2026, second-quarter 2026 and third-quarter 2025, respectively.
(5) September 30, 2026 excludes $2.4 billion of Private Education Loans that were classified as held for sale as of September 30, 2026 and $235 million of In-School Education Loans carried at fair value. June 30, 2026 excludes $528 million of Legacy Private Education Loans classified as held for sale as of June 30, 2026.
12
ALLOWANCE FOR LOAN LOSSES – EDUCATION LOANS
QUARTER ENDED
September 30, 2026
(Dollars in millions)
Private Education Loans
FFELP
Loans
Total
Allowance at beginning of period
$
263
$
163
$
426
Total provision
210
13
223
Charge-offs:
Gross charge-offs
(68
)
(11
)
(79
)
Expected future recoveries on current period gross charge-offs
9
—
9
Net charge-offs(1)
(59
)
(11
)
(70
)
Write off in connection with classification of loans as held for sale(2)
(121
)
—
(121
)
Decrease in expected future recoveries on previously fully charged-off loans(3)
6
—
6
Allowance at end of period (GAAP)
299
165
464
Plus: expected future recoveries on previously fully charged-off loans(3)
157
—
157
Allowance at end of period excluding expected future recoveries on previously fully
charged-off loans (Non-GAAP Financial Measure)(4)
$
456
$
165
$
621
Net charge-offs as a percentage of average loans in repayment (annualized) (5)
1.49
%
.20
%
Allowance coverage of charge-offs (annualized)(4) (5)
2.4
3.7
(Non-GAAP)
Allowance as a percentage of the ending total loan balance(4) (5)
3.5
%
.6
%
(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(4) (5)
3.6
%
.8
%
(Non-GAAP)
Ending total loans(5)
$
12,979
$
26,063
Average loans in repayment(5)
$
12,613
$
22,022
Ending loans in repayment(5)
$
12,519
$
21,872
QUARTER ENDED
June 30, 2026
(Dollars in millions)
Private Education Loans
FFELP
Loans
Total
Allowance at beginning of period
$
314
$
165
$
479
Total provision
17
8
25
Charge-offs:
—
Gross charge-offs
(82
)
(10
)
(92
)
Expected future recoveries on current period gross charge-offs
11
—
11
Net charge-offs(1)
(71
)
(10
)
(81
)
Decrease in expected future recoveries on previously fully charged-off loans(3)
3
—
3
Allowance at end of period (GAAP)
263
163
426
Plus: expected future recoveries on previously fully charged-off loans(3)
163
—
163
Allowance at end of period excluding expected future recoveries on previously fully
charged-off loans (Non-GAAP Financial Measure)(4)
$
426
$
163
$
589
Net charge-offs as a percentage of average loans in repayment (annualized) (5)
1.84
%
.18
%
Allowance coverage of charge-offs (annualized)(4)(5)
1.6
4.0
(Non-GAAP)
Allowance as a percentage of the ending total loan balance(4)(5)
2.8
%
.6
%
(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(4)(5)
2.9
%
.7
%
(Non-GAAP)
Ending total loans(5)
$
15,409
$
26,738
Average loans in repayment(5)
$
14,803
$
22,478
Ending loans in repayment(5)
$
14,781
$
22,324
13
QUARTER ENDED
September 30, 2025
(Dollars in millions)
Private Education Loans
FFELP
Loans
Total
Allowance at beginning of period
$
348
$
182
$
530
Total provision
155
13
168
Charge-offs:
Gross charge-offs
(112
)
(9
)
(121
)
Expected future recoveries on current period gross charge-offs
16
—
16
Net charge-offs(1)
(96
)
(9
)
(105
)
Decrease in expected future recoveries on previously fully charged-off loans(3)
(1
)
—
(1
)
Allowance at end of period (GAAP)
406
186
592
Plus: expected future recoveries on previously fully charged-off loans(3)
173
—
173
Allowance at end of period excluding expected future recoveries on previously fully
charged-off loans (Non-GAAP Financial Measure)(4)
$
579
$
186
$
765
Net charge-offs as a percentage of average loans in repayment (annualized) (5)
2.50
%
.15
%
Allowance coverage of charge-offs (annualized)(4)(5)
1.5
5.1
(Non-GAAP)
Allowance as a percentage of the ending total loan balance(4)(5)
3.7
%
.6
%
(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(4)(5)
3.8
%
.8
%
(Non-GAAP)
Ending total loans(5)
$
15,862
$
29,138
Average loans in repayment(5)
$
15,259
$
24,527
Ending loans in repayment(5)
$
15,221
$
24,136
NINE MONTHS ENDED
September 30, 2026
(Dollars in millions)
Private Education Loans
FFELP
Loans
Total
Allowance at beginning of period
$
364
$
173
$
537
Total provision
245
30
275
Charge-offs:
Gross charge-offs
(233
)
(38
)
(271
)
Expected future recoveries on current period gross charge-offs
31
—
31
Net charge-offs(1)
(202
)
(38
)
(240
)
Write off in connection with classification of loans as held for sale(2)
(121
)
—
(121
)
Decrease in expected future recoveries on previously fully charged-off loans(3)
13
—
13
Allowance at end of period (GAAP)
299
165
464
Plus: expected future recoveries on previously fully charged-off loans(3)
157
—
157
Allowance at end of period excluding expected future recoveries on previously fully
charged-off loans (Non-GAAP Financial Measure)(4)
$
456
$
165
$
621
Net charge-offs as a percentage of average loans in repayment (annualized) (5)
1.65
%
.23
%
Allowance coverage of charge-offs (annualized)(4) (5)
2.2
3.2
(Non-GAAP)
Allowance as a percentage of the ending total loan balance(4) (5)
3.5
%
.6
%
(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(4) (5)
3.6
%
.8
%
(Non-GAAP)
Ending total loans(5)
$
12,979
$
26,063
Average loans in repayment(5)
$
12,450
$
22,571
Ending loans in repayment(5)
$
12,519
$
21,872
14
NINE MONTHS ENDED
September 30, 2025
(Dollars in millions)
Private Education Loans
FFELP
Loans
Total
Allowance at beginning of period
$
441
$
180
$
621
Total provision
207
29
236
Charge-offs:
Gross charge-offs
(287
)
(23
)
(310
)
Expected future recoveries on current period gross charge-offs
39
—
39
Net charge-offs(1)
(248
)
(23
)
(271
)
Decrease in expected future recoveries on previously fully charged-off loans(3)
6
—
6
Allowance at end of period (GAAP)
406
186
592
Plus: expected future recoveries on previously fully charged-off loans(3)
173
—
173
Allowance at end of period excluding expected future recoveries on previously fully
charged-off loans (Non-GAAP Financial Measure)(4)
$
579
$
186
$
765
Net charge-offs as a percentage of average loans in repayment (annualized) (5)
2.16
%
.13
%
Allowance coverage of charge-offs (annualized)(4) (5)
1.7
5.8
(Non-GAAP)
Allowance as a percentage of the ending total loan balance(4) (5)
3.7
%
.6
%
(Non-GAAP)
Allowance as a percentage of the ending loans in repayment(4) (5)
3.8
%
.8
%
(Non-GAAP)
Ending total loans(5)
$
15,862
$
29,138
Average loans in repayment(5)
$
15,368
$
25,036
Ending loans in repayment(5)
$
15,221
$
24,136
(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) Three and nine months ended September 30, 2026 include $121 million of write-offs related to $1.4 billion of Legacy Private Education Loans that were classified as held for sale as of September 30, 2026. When loans are first classified as held for sale, if the fair value is lower than the carrying value then the expected losses related to credit are first recorded as provision for loan losses and the allowance for loan losses associated with those items is written off, establishing a new cost basis.
(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:
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Beginning of period expected future recoveries on previously fully charged-off loans
$
163
$
166
$
172
$
170
$
179
Expected future recoveries of current period defaults
9
11
16
31
39
Recoveries (cash collected)
(9
)
(10
)
(9
)
(29
)
(30
)
Charge-offs (as a result of lower recovery expectations)
(6
)
(4
)
(6
)
(15
)
(15
)
End of period expected future recoveries on previously fully charged-off loans
$
157
$
163
$
173
$
157
$
173
Change in balance during period
$
(6
)
$
(3
)
$
1
$
(13
)
$
(6
)
(4) For Private Education Loans, the item is a non-GAAP financial measure. For a description and reconciliation, see “Non-GAAP Financial Measures.”
(5) Three and nine months ended September 30, 2026 exclude $2.4 billion of Private Education Loans that were classified as held for sale as of September 30, 2026 and $235 million of In-School Education Loans carried at fair value, and their corresponding charge-offs. Second-quarter 2026 excludes $528 million of Legacy Private Education Loans, and the corresponding charge-offs, that were classified as held for sale as of June 30, 2026.
15
LIQUIDITY AND CAPITAL RESOURCES
We expect to fund our ongoing liquidity needs, including the repayment of $0.7 billion of senior unsecured notes that mature in the short term (i.e., over the next 12 months) and the remaining $4.6 billion of senior unsecured notes that mature in the long term (from 2027 to 2043 with 78% maturing by 2032), through a number of sources. These sources include our cash on hand, unencumbered FFELP Loan and Refinance Education 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 FFELP Loan and Private Education 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 Consumer 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 1.1 million shares of common stock for $10 million in the third quarter of 2026.
SOURCES OF LIQUIDITY
Sources of Primary Liquidity
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
Ending Balances:
Unrestricted cash
$
701
$
770
$
571
Unencumbered Refinance Education Loans
175
314
515
Unencumbered In-School Education Loans
11
5
23
Unencumbered FFELP Loans
45
42
58
Total
$
932
$
1,131
$
1,167
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Average Balances:
Unrestricted cash
$
621
$
686
$
604
$
620
$
640
Unencumbered Refinance
Education Loans
468
665
592
607
542
Unencumbered In-School
Education Loans
9
21
14
14
26
Unencumbered FFELP Loans
54
56
52
55
99
Total
$
1,152
$
1,428
$
1,262
$
1,296
$
1,307
16
Sources of Additional Liquidity
Liquidity may also be available under our secured credit facilities. Maximum borrowing capacity under the FFELP Loan and Private Education 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 November 2026 to April 2028.
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
Ending Balances:
Private Education Loan ABCP facilities
$
890
$
1,841
$
1,882
FFELP Loan ABCP facilities
113
—
178
Total
$
1,003
$
1,841
$
2,060
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Average Balances:
Private Education Loan ABCP facilities
$
1,607
$
1,678
$
1,695
$
1,648
$
1,586
FFELP Loan ABCP facilities
90
134
184
129
250
Total
$
1,697
$
1,812
$
1,879
$
1,777
$
1,836
At September 30, 2026, we had a total of $2.5 billion of unencumbered tangible assets inclusive of those listed in the table above as sources of primary liquidity. Total unencumbered education loans comprised $912 million of our unencumbered tangible assets of which $867 million and $45 million related to Private Education Loans and FFELP Loans, respectively. In addition, as of September 30, 2026, we had $5.0 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 September 30, 2026, $0.5 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)
September 30, 2026
June 30, 2026
September 30, 2025
Net assets of consolidated variable interest entities
(encumbered assets) — Private Education Loans
$
2.5
$
2.3
$
2.0
Net assets of consolidated variable interest entities
(encumbered assets) — FFELP Loans
2.5
2.6
2.7
Tangible unencumbered assets(1)
2.5
2.7
2.8
Senior unsecured debt
(5.3
)
(5.3
)
(5.3
)
Mark-to-market on unsecured hedged debt(2)
.2
—
—
Other liabilities, net
(.4
)
(.3
)
(.2
)
Total Tangible Equity (3)
$
2.0
$
2.0
$
2.0
(1) Excludes goodwill and acquired intangible assets.
(2) At September 30, 2026, June 30, 2026, and September 30, 2025, there were $(174) million, $(78) million and $(53) 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.”
17
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.
18
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.
QUARTER ENDED SEPTEMBER 30, 2026
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
$
651
$
270
$
381
$
—
$
—
Personal Loans
1
1
—
—
—
Cash and investments
17
5
8
—
4
Total interest income
669
276
389
—
4
Total interest expense
554
189
342
—
27
Net interest income
(loss)
115
$
—
$
(4
)
$
(4
)
$
111
87
47
—
(23
)
Less: provisions for loan
losses
227
227
214
13
—
—
Net interest income
(loss) after provisions
for loan losses
(112
)
(127
)
34
—
(23
)
Other income (loss):
Servicing revenue
10
2
8
—
—
Asset recovery and
business processing
revenue
—
—
—
—
—
Other revenue
7
—
—
—
2
Gains on sales of loans
162
162
—
—
—
Net fair value changes of loans
23
23
—
—
—
Total other income
202
—
(5
)
(5
)
197
187
8
—
2
Expenses:
Direct operating
expenses
70
57
13
—
—
Unallocated shared
services expenses
5
—
—
—
5
Operating expenses
75
—
—
—
75
57
13
—
5
Goodwill and acquired
intangible asset
impairment and
amortization
—
—
—
—
—
—
—
—
—
Restructuring/other
reorganization
expenses
2
—
—
—
2
—
—
—
2
Total expenses
77
—
—
—
77
57
13
—
7
Income (loss) before
income tax expense
(benefit)
13
—
(9
)
(9
)
4
3
29
—
(28
)
Income tax expense
(benefit)(2)
(2
)
—
3
3
1
1
7
—
(7
)
Net income (loss)
$
15
$
—
$
(12
)
$
(12
)
$
3
$
2
$
22
$
—
$
(21
)
(1) Core Earnings adjustments to GAAP:
QUARTER ENDED SEPTEMBER 30, 2026
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Total
Net interest income (loss) after provisions for loan losses
$
(4
)
$
—
$
(4
)
Total other income
(5
)
—
(5
)
Goodwill and acquired intangible asset impairment and amortization
—
—
—
Total Core Earnings adjustments to GAAP
$
(9
)
$
—
(9
)
Income tax expense (benefit)
3
Net income (loss)
$
(12
)
(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
19
QUARTER ENDED JUNE 30, 2026
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
$
664
$
273
$
391
$
—
$
—
Cash and investments
18
5
8
—
5
Total interest income
682
278
399
—
5
Total interest expense
560
185
351
—
26
Net interest income
(loss)
122
$
1
$
(3
)
$
(2
)
$
120
93
48
—
(21
)
Less: provisions for loan
losses
26
26
18
8
—
—
Net interest income
(loss) after provisions
for loan losses
96
75
40
—
(21
)
Other income (loss):
Servicing revenue
10
2
8
—
—
Asset recovery and
business processing
revenue
—
—
—
—
—
Other revenue
18
—
—
—
17
Total other income
28
(1
)
—
(1
)
27
2
8
—
17
Expenses:
Direct operating
expenses
57
42
15
—
—
Unallocated shared
services expenses
25
—
—
—
25
Operating expenses
82
—
—
—
82
42
15
—
25
Goodwill and acquired
intangible asset
impairment and
amortization
—
—
—
—
—
—
—
—
—
Restructuring/other
reorganization
expenses
3
—
—
—
3
—
—
—
3
Total expenses
85
—
—
—
85
42
15
—
28
Income (loss) before
income tax expense
(benefit)
39
—
(3
)
(3
)
36
35
33
—
(32
)
Income tax expense
(benefit)(2)
14
—
(5
)
(5
)
9
8
7
—
(6
)
Net income (loss)
$
25
$
—
$
2
$
2
$
27
$
27
$
26
$
—
$
(26
)
(1) Core Earnings adjustments to GAAP:
QUARTER ENDED JUNE 30, 2026
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Total
Net interest income (loss) after provisions for loan losses
$
(2
)
$
—
$
(2
)
Total other income
(1
)
—
(1
)
Goodwill and acquired intangible asset impairment and amortization
—
—
—
Total Core Earnings adjustments to GAAP
$
(3
)
$
—
(3
)
Income tax expense (benefit)
(5
)
Net income (loss)
$
2
(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
20
QUARTER ENDED SEPTEMBER 30, 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
$
760
$
276
$
484
$
—
$
—
Cash and investments
21
5
10
—
6
Total interest income
781
281
494
—
6
Total interest expense
639
183
429
—
23
Net interest income
(loss)
142
$
4
$
—
$
4
$
146
98
65
—
(17
)
Less: provisions for loan
losses
168
168
155
13
—
—
Net interest income
(loss) after provisions
for loan losses
(26
)
(57
)
52
—
(17
)
Other income (loss):
Servicing revenue
13
3
10
—
—
Asset recovery and
business processing
revenue
—
—
—
—
—
Other revenue (loss)
6
—
—
—
10
Total other income
19
(4
)
8
4
23
3
10
—
10
Expenses:
Direct operating
expenses
61
45
16
—
—
Unallocated shared
services expenses
44
—
—
—
44
Operating expenses
105
—
—
—
105
45
16
—
44
Goodwill and acquired
intangible asset
impairment and
amortization
1
—
(1
)
(1
)
—
—
—
—
—
Restructuring/other
reorganization
expenses
4
—
—
—
4
—
—
—
4
Total expenses
110
—
(1
)
(1
)
109
45
16
—
48
Income (loss) before
income tax expense
(benefit)
(117
)
—
9
9
(108
)
(99
)
46
—
(55
)
Income tax expense
(benefit)(2)
(31
)
—
6
6
(25
)
(23
)
11
—
(13
)
Net income (loss)
$
(86
)
$
—
$
3
$
3
$
(83
)
$
(76
)
$
35
$
—
$
(42
)
(1) Core Earnings adjustments to GAAP:
QUARTER ENDED SEPTEMBER 30, 2025
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Total
Net interest income (loss) after provisions for loan losses
$
4
$
—
$
4
Total other income
4
—
4
Goodwill and acquired intangible asset impairment and amortization
—
(1
)
(1
)
Total Core Earnings adjustments to GAAP
$
8
$
1
9
Income tax expense (benefit)
6
Net income (loss)
$
3
(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
21
NINE MONTHS ENDED SEPTEMBER 30, 2026
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
$
1,993
$
820
$
1,173
$
—
$
—
Personal Loans
1
1
—
—
—
Cash and investments
51
14
24
—
13
Total interest income
2,045
835
1,197
—
13
Total interest expense
1,677
553
1,056
—
79
Net interest income
(loss)
368
$
3
$
(14
)
$
(11
)
$
357
282
141
—
(66
)
Less: provisions for loan
losses
281
281
251
30
—
—
Net interest income
(loss) after provisions
for loan losses
87
31
111
—
(66
)
Other income (loss):
Servicing revenue
31
7
24
—
—
Asset recovery and
business processing
revenue
—
—
—
—
—
Other revenue
34
—
—
—
23
Gains on sales of loans
162
162
—
—
—
Net fair value changes of loans
23
23
—
—
—
Total other income
250
(3
)
(8
)
(11
)
239
192
24
—
23
Expenses:
Direct operating
expenses
182
182
138
44
—
—
Unallocated shared
services expenses
64
64
—
—
—
64
Operating expenses
246
—
—
—
246
138
44
—
64
Goodwill and acquired
intangible asset
impairment and
amortization
5
—
(5
)
(5
)
—
—
—
—
—
Restructuring/other
reorganization
expenses
4
—
—
—
4
—
—
—
4
Total expenses
255
—
(5
)
(5
)
250
138
44
—
68
Income (loss) before
income tax expense
(benefit)
82
(17
)
(17
)
65
85
91
—
(111
)
Income tax expense
(benefit)(2)
26
—
(11
)
(11
)
15
20
21
—
(26
)
Net income (loss)
$
56
$
—
$
(6
)
$
(6
)
$
50
$
65
$
70
$
—
$
(85
)
(1) Core Earnings adjustments to GAAP:
NINE MONTHS ENDED SEPTEMBER 30, 2026
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Total
Net interest income (loss) after provisions for loan losses
$
(11
)
$
—
$
(11
)
Total other income
(11
)
—
(11
)
Goodwill and acquired intangible asset impairment and amortization
—
(5
)
(5
)
Total Core Earnings adjustments to GAAP
$
(22
)
$
5
(17
)
Income tax expense (benefit)
(11
)
Net income (loss)
$
(6
)
(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
22
NINE MONTHS ENDED SEPTEMBER 30, 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
$
2,297
$
838
$
1,459
$
—
$
—
Cash and investments
64
15
30
—
19
Total interest income
2,361
853
1,489
—
19
Total interest expense
1,961
547
1,321
—
72
Net interest income
(loss)
400
$
15
$
6
$
21
$
421
306
168
—
(53
)
Less: provisions for loan
losses
236
236
207
29
—
—
Net interest income
(loss) after provisions
for loan losses
164
99
139
—
(53
)
Other income (loss):
Servicing revenue
40
8
32
—
—
Asset recovery and
business processing
revenue
23
—
—
23
—
Other revenue (loss)
10
1
(1
)
—
44
Total other income
73
(15
)
49
34
107
9
31
23
44
Expenses:
Direct operating
expenses
189
115
54
20
—
Unallocated shared
services expenses
144
—
—
—
144
Operating expenses
333
—
—
—
333
115
54
20
144
Goodwill and acquired
intangible asset
impairment and
amortization
2
—
(2
)
(2
)
—
—
—
—
—
Restructuring/other
reorganization
expenses
6
—
—
—
6
—
—
—
6
Total expenses
341
—
(2
)
(2
)
339
115
54
20
150
Income (loss) before
income tax expense
(benefit)
(104
)
—
57
57
(47
)
(7
)
116
3
(159
)
Income tax expense
(benefit)(2)
(29
)
—
18
18
(11
)
(3
)
27
1
(36
)
Net income (loss)
$
(75
)
$
—
$
39
$
39
$
(36
)
$
(4
)
$
89
$
2
$
(123
)
(1) Core Earnings adjustments to GAAP:
NINE MONTHS ENDED SEPTEMBER 30, 2025
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Total
Net interest income (loss) after provisions for loan losses
$
21
$
—
$
21
Total other income
34
—
34
Goodwill and acquired intangible asset impairment and amortization
—
(2
)
(2
)
Total Core Earnings adjustments to GAAP
$
55
$
2
57
Income tax expense (benefit)
18
Net income (loss)
$
39
(2) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
23
The following discussion summarizes the differences between GAAP and Core Earnings net income and details each specific adjustment required to reconcile our GAAP earnings to our Core Earnings segment presentation.
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
GAAP net income
$
15
$
25
$
(86
)
$
56
$
(75
)
Core Earnings adjustments to GAAP:
Net impact of derivative accounting
(9
)
(3
)
8
(22
)
55
Net impact of goodwill and acquired
intangible assets
—
—
1
5
2
Net tax effect
(3
)
5
(6
)
11
(18
)
Total Core Earnings adjustments to GAAP
(12
)
2
3
(6
)
39
Core Earnings net income
$
3
$
27
$
(83
)
$
50
$
(36
)
(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.
24
The table below quantifies the adjustments for derivative accounting between GAAP and Core Earnings net income.
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Core Earnings derivative adjustments:
(Gains) losses on derivative and hedging
activities, net, included in other income
$
(5
)
$
(1
)
$
4
$
(11
)
$
34
Plus: (Gains) losses on fair value hedging
activity included in interest expense
(9
)
(4
)
(2
)
(21
)
—
Total (gains) losses in GAAP net income
(14
)
(5
)
2
(32
)
34
Plus: Reclassification of settlement income
(expense) on derivative and hedging
activities, net(1)
—
1
4
3
15
Mark-to-market (gains) losses on derivative
and hedging activities, net(2)
(14
)
(4
)
6
(29
)
49
Other derivative accounting adjustments(3)
5
1
2
7
6
Total net impact of derivative accounting
$
(9
)
$
(3
)
$
8
$
(22
)
$
55
(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.
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Reclassification of settlements
on derivative and hedging
activities:
Net settlement income (expense)
on interest rate swaps
reclassified to net interest income
$
—
$
1
$
4
$
3
$
15
Total reclassifications of settlement
income (expense) on derivative
and hedging activities
$
—
$
1
$
4
$
3
$
15
(2) “Mark-to-market (gains) on derivative and hedging activities, net” is comprised of the following:
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Fair value hedges
$
(7
)
$
(1
)
$
2
$
(10
)
$
9
Foreign currency hedges
(2
)
(3
)
(4
)
(11
)
(9
)
Other (a)
(5
)
—
8
(8
)
49
Total mark-to-market (gains)
losses on derivative and
hedging activities, net
$
(14
)
$
(4
)
$
6
$
(29
)
$
49
(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:
25
Cumulative Impact of Derivative Accounting under GAAP compared to Core Earnings
As of September 30, 2026, derivative accounting has increased GAAP equity by approximately $35 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.
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Beginning impact of derivative
accounting on GAAP equity
$
(17
)
$
(28
)
$
(30
)
$
(39
)
$
8
Net impact of net mark-to-market
gains (losses) under derivative
accounting(1)
52
11
(7
)
74
(45
)
Ending impact of derivative
accounting on GAAP equity
$
35
$
(17
)
$
(37
)
$
35
$
(37
)
(1)
Net impact of net mark-to-market gains (losses) under derivative accounting is composed of the following:
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Total pre-tax net impact of derivative
accounting recognized in net
income(2)
$
9
$
3
$
(8
)
$
22
$
(55
)
Tax and other impacts of derivative
accounting adjustments
(3
)
(1
)
2
(6
)
14
Change in mark-to-market gains
(losses) on derivatives, net of tax
recognized in other comprehensive
income
46
9
(1
)
58
(4
)
Net impact of net mark-to-market
gains (losses) under derivative
accounting
$
52
$
11
$
(7
)
$
74
$
(45
)
(a) 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.
September 30,
June 30,
September 30,
(Dollars in millions)
2026
2026
2025
Total hedged Floor Income, net of tax(1)(2)
$
16
$
20
$
31
(1) $21 million, $26 million and $41 million on a pre-tax basis as of September 30, 2026, June 30, 2026, and September 30, 2025, respectively.
(2) Of the $16 million as of September 30, 2026, approximately $3 million, $7 million and $6 million will be recognized as part of Core
Earnings net income in the remainder of 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.
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Core Earnings goodwill and acquired
intangible asset adjustments
$
—
$
—
$
1
$
5
$
2
26
2. Tangible Equity and Adjusted Tangible Equity Ratio
Adjusted Tangible Equity 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 millions)
September 30, 2026
June 30, 2026
September 30, 2025
Stockholders' equity
$
2,435
$
2,398
$
2,439
Less: Goodwill and acquired intangible assets
430
430
435
Tangible Equity
2,005
1,968
2,004
Less: Equity held for FFELP Loans
129
133
145
Adjusted Tangible Equity
$
1,876
$
1,835
$
1,859
Divided by:
Total assets
$
46,128
$
47,297
$
49,306
Less:
Goodwill and acquired intangible assets
430
430
435
FFELP Loans
25,898
26,575
28,952
Adjusted tangible assets
$
19,800
$
20,292
$
19,919
Adjusted Tangible Equity Ratio
9.5
%
9.0
%
9.3
%
27
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. As of September 30, 2026, the $456 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 $12,979 million Private Education Loan portfolio. The $157 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 $12,979 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
QUARTERS ENDED
NINE MONTHS ENDED
(Dollars in millions)
September 30, 2026
June 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Allowance at end of period (GAAP)
$
299
$
263
$
406
$
299
$
406
Plus: expected future recoveries on previously fully
charged-off loans
157
163
173
157
173
Allowance at end of period excluding expected
future recoveries on previously fully
charged-off loans (Non-GAAP Financial
Measure)
$
456
$
426
$
579
$
456
$
579
Ending total loans(1)
$
12,979
$
15,409
$
15,862
$
12,979
$
15,862
Ending loans in repayment(1)
$
12,519
$
14,781
$
15,221
$
12,519
$
15,221
Net charge-offs
$
59
$
71
$
96
$
202
$
248
Allowance coverage of charge-offs (annualized)(1):
GAAP
1.6
1.0
1.1
1.4
1.2
Adjustment(2)
.8
.6
.4
.8
.5
Non-GAAP Financial Measure(2)
2.4
1.6
1.5
2.2
1.7
Allowance as a percentage of the ending total loan
balance(1):
GAAP
2.3
%
1.7
%
2.6
%
2.3
%
2.6
%
Adjustment(2)
1.2
1.1
1.1
1.2
1.1
Non-GAAP Financial Measure(2)
3.5
%
2.8
%
3.7
%
3.5
%
3.7
%
Allowance as a percentage of the ending loans in
repayment(1):
GAAP
2.4
%
1.8
%
2.7
%
2.4
%
2.7
%
Adjustment(2)
1.2
1.1
1.1
1.2
1.1
Non-GAAP Financial Measure(2)
3.6
%
2.9
%
3.8
%
3.6
%
3.8
%
(1) Three and nine months ended September 30, 2026 exclude $2.4 billion of Private Education Loans that were classified as held for sale as of September 30, 2026 and $235 million of In-School Education Loans held at fair value, and their corresponding charge-offs. Second-quarter 2026 excludes $528 million of Legacy Private Education Loans, and their corresponding charge-offs, that were classified as held for sale as of June 30, 2026.
(2) The allowance used for these credit metrics excludes the expected future recoveries on previously fully charged-off loans. See discussion above.
28
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Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration