Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”).

Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight Financing Rate. As of March 31, 2024 and December 31, 2023, 29 percent and 33 percent, respectively, of all of our Private Education Loans were indexed to SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school.

FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993 and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims.

In the first three months of 2024, we recognized $143 million in gains from the sale of approximately $2.10 billion of Private Education Loans, including $1.95 billion of principal and $151 million in capitalized interest, to an unaffiliated third party. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings - Unconsolidated VIEs” in this Form 10-Q. There were no loan sales in the first three months of 2023.


	March 31,		December 31,
(Dollars in thousands)	2024		2023
Private Education Loans:
Fixed-rate	$	14,788,341	$	13,985,791
Variable-rate	6,164,005		7,040,053
Total Private Education Loans, gross	20,952,346		21,025,844
Deferred origination costs and unamortized premium/(discount)	80,868		81,554
Allowance for credit losses	(1,345,431)		(1,335,105)
Total Private Education Loans, net	19,687,783		19,772,293

FFELP Loans	516,363		537,401
Deferred origination costs and unamortized premium/(discount)	1,270		1,330
Allowance for credit losses	(4,627)		(4,667)
Total FFELP Loans, net	513,006		534,064





Loans held for investment, net	$	20,200,789	$	20,306,357

The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:


	2024				2023
Three Months Ended March 31, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	21,442,744	11.01	%	$	21,755,202	10.66	%
FFELP Loans	527,012		7.24		602,072		6.87

Total portfolio	$	21,969,756			$	22,357,274