SLM Corporation, known as Sallie Mae, cut its 2026 diluted earnings outlook by 36.5% at the range midpoints after deciding against a planned loan sale, while reporting a quarterly loss.
For the quarter ended Sept. 30, 2026, SLM reported a consolidated net loss of $32.261 million, compared with net income of $135.850 million a year earlier. The loss attributable to common stock was $35.904 million, or $0.19 per diluted share, versus income of $131.856 million, or $0.63 per share.
SLM lowered its full-year diluted earnings-per-share outlook to $1.95-$2.05 from $3.10-$3.20. On an Oct. 22 earnings call, CEO Jon Witter said the primary reason was the decision not to complete a final planned loan sale for 2026. CFO Pete Graham put the sale at about $1 billion and said SLM had not selected a portfolio. Witter said holding loans could generate roughly a 5% net interest margin over time, while the decision had a near-term earnings impact.
Net charge-offs were $90.386 million in the third quarter, compared with $77.531 million a year earlier. They totaled $292.004 million in the first nine months of 2026, up from $247.973 million in the same period of 2025. The reported figures exclude $19.1 million in previously charged-off loans SLM bought back through optional clean-up calls. The company raised its full-year charge-off forecast to $400 million-$420 million from $365 million-$385 million.
SLM linked higher charge-offs to outside debt-resolution practices it described as misaligned, saying some borrowers it considered able to pay nevertheless defaulted. The company said it had temporarily suspended most outside recovery work while revising its collections strategy. At Sept. 30, delinquencies were 4.20% of loans in repayment, compared with 4.01% a year earlier; loans in forbearance were 2.25%, versus 2.00%. SLM said other credit performance was within expectations and reported allowance coverage of 5.89% of private education loan exposure, down from 5.93% a year earlier.
PR Newswire distributed an Oct. 30 notice in which law firm Levi & Korsinsky said it was investigating whether SLM adequately disclosed its credit-loss exposure and invited investors to share information about losses. The firm’s notice linked the outlook reduction to higher expected charge-offs, while SLM management identified the planned loan sale decision as the primary reason for the earnings cut. The notice does not say a complaint has been filed or describe a court determination.
