Sallie Mae reported a GAAP net loss of $0.19 per common share for the third quarter 2026, significantly missing analyst expectations of a $0.17 profit. The results were primarily pressured by higher provision expenses and non-interest costs associated with record-high loan originations and deteriorating credit resolution performance. Consequently, management aggressively lowered its full-year 2026 diluted EPS guidance from a previous range of $3.10–$3.20 down to $1.95–$2.05.
Key Highlights
- Private education loan originations grew 15% year-over-year to $3.4 billion, driven by a 119% surge in graduate student lending following federal PLUS reform.
- Full-year 2026 net charge-off guidance was raised to $400 million–$420 million, up from the prior estimate of $365 million–$385 million, due to misaligned third-party debt resolution practices.
- Net interest income fell to $339 million from $373 million in the year-ago quarter, while non-interest expenses jumped 22% to $221 million to support peak-season volume.
- The company repurchased 5.1 million shares for $132.2 million during the quarter, with $111 million in remaining capacity under the 2026 repurchase program.