Loans held for investment consist of Private Education 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”). At September 30, 2024, we transferred our remaining FFELP Loan portfolio to loans held for sale. For additional information, see Notes to Consolidated Financial Statements, Note 4, “Loans Held for Sale”.

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 September 30, 2024 and December 31, 2023, 24 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 nine months of 2024, we recognized $255 million in gains from the sale of approximately $3.69 billion of Private Education Loans, including $3.42 billion of principal and $274 million in capitalized interest, to unaffiliated third parties. In the first nine months of 2023, we recognized $128 million in gains from the sale of approximately $2.10 billion of Private Education Loans, including $1.96 billion of principal and $144 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 those VIEs. Those 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 those loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 9, “Borrowings - Unconsolidated VIEs” in this Form 10-Q.


	September 30,		December 31,
(Dollars in thousands)	2024		2023
Private Education Loans:
Fixed-rate	$	16,510,149	$	13,985,791
Variable-rate	5,267,317		7,040,053
Total Private Education Loans, gross	21,777,466		21,025,844
Deferred origination costs and unamortized premium/(discount)	96,088		81,554
Allowance for credit losses	(1,413,621)		(1,335,105)
Total Private Education Loans, net	20,459,933		19,772,293

FFELP Loans(1)	—		537,401
Deferred origination costs and unamortized premium/(discount)	—		1,330
Allowance for credit losses	—		(4,667)
Total FFELP Loans, net	—		534,064





Loans held for investment, net	$	20,459,933	$	20,306,357


	2024				2023
Three Months Ended September 30, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	20,497,173	10.79	%	$	20,649,663	10.96	%
FFELP Loans(1)	—		—		563,502		7.35

Total portfolio	$	20,497,173			$	21,213,165


	2024				2023
Nine Months Ended September 30, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	20,805,777	10.90	%	$	21,032,541	10.80	%
FFELP Loans(1)	—		—		583,427		7.10

Total portfolio	$	20,805,777			$	21,615,968

We had $486 million of loans held for sale at September 30, 2024, and no loans held for sale at December 31, 2023. The balance at September 30, 2024 was comprised of our FFELP Loan portfolio. At September 30, 2024, we wrote down this loan portfolio to its estimated fair value through an adjustment to the allowance for credit losses of $8 million.