| Allowance for Loan Losses | 2. Allowance for Loan Losses Allowance for Loan Losses Roll Forward
Three Months Ended September 30, 2024
(Dollars in millions) FFELP Private Total
Beginning balance $ 194 $ 493 $ 687
Total provision ( 5 ) 47 42
Charge-offs:
Gross charge-offs ( 9 ) ( 85 ) ( 94 )
Expected future recoveries on current period gross charge-offs — 11 11
Total (1) ( 9 ) ( 74 ) ( 83 )
Adjustment resulting from the change in charge-off rate (2) — ( 21 ) ( 21 )
Net charge-offs ( 9 ) ( 95 ) ( 104 )
Decrease in expected future recoveries on previously fully charged-off (3) — 26 26
Allowance at end of period $ 180 $ 471 $ 651
Net charge-offs as a percentage of average loans in repayment, (2) .14 % 1.87 %
Net adjustment resulting from the change in charge-off rate as a (2) — % .53 %
Net charge-offs as a percentage of average loans in repayment .14 % 2.40 %
Ending total loans $ 31,702 $ 16,476
Average loans in repayment $ 25,866 $ 15,856
Ending loans in repayment $ 25,382 $ 15,659 (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) In third-quarter 2024, the net charge-off rate on defaulted Private Education Loans increased from 82.3 % to 82.7 %. This change resulted in a $ 21 million reduction to the balance of the expected future recoveries on previously fully charged-off loans. (3) At the end of each month, for Private Education Loans that are 212 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:
Three Months Ended September 30,
(Dollars in millions) 2024
Beginning of period expected future recoveries on previously fully charged-off loans $ 211
Expected future recoveries of current period defaults 11
Recoveries (cash collected) ( 10 )
Charge-offs (as a result of lower recovery expectations) ( 27 )
End of period expected future recoveries on previously fully charged-off loans $ 185
Change in balance during period $ ( 26 ) 2. Allowance for Loan Losses (Continued)
Three Months Ended September 30, 2023
(Dollars in millions) FFELP Loans Private Education Loans Total
Beginning balance $ 200 $ 657 $ 857
Total provision 36 36 72
Charge-offs:
Gross charge-offs ( 16 ) ( 85 ) ( 101 )
Expected future recoveries on current period gross charge-offs — 12 12
Total (1) ( 16 ) ( 73 ) ( 89 )
Adjustment resulting from the change in charge-off rate (2) — ( 25 ) ( 25 )
Net charge-offs ( 16 ) ( 98 ) ( 114 )
Decrease in expected future recoveries on previously fully charged-off (3) — 30 30
Allowance at end of period $ 220 $ 625 $ 845
Net charge-offs as a percentage of average loans in repayment, (2) .19 % 1.66 %
Net adjustment resulting from the change in charge-off rate as a (2) — % .56 %
Net charge-offs as a percentage of average loans in repayment .19 % 2.22 %
Ending total loans $ 39,801 $ 17,958
Average loans in repayment $ 32,696 $ 17,470
Ending loans in repayment $ 31,917 $ 17,249 (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) In third-quarter 2023, the net charge-off rate on defaulted Private Education Loans increased from 81.9 % to 82.3 %. This change resulted in a $ 25 million reduction to the balance of the expected future recoveries on previously fully charged-off loans. (3) At the end of each month, for Private Education Loans that are 212 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:
Three Months Ended September 30,
(Dollars in millions) 2023
Beginning of period expected future recoveries on previously fully charged-off loans $ 262
Expected future recoveries of current period defaults 12
Recoveries (cash collected) ( 11 )
Charge-offs (as a result of lower recovery expectations) ( 31 )
End of period expected future recoveries on previously fully charged-off loans $ 232
Change in balance during period $ ( 30 ) 2. Allowance for Loan Losses (Continued)
Nine Months Ended September 30, 2024
(Dollars in millions) FFELP Loans Private Education Loans Total
Beginning balance $ 215 $ 617 $ 832
Total provision ( 6 ) 74 68
Charge-offs:
Gross charge-offs ( 29 ) ( 272 ) ( 301 )
Expected future recoveries on current period gross charge-offs — 32 32
Total (1) (2) ( 29 ) ( 240 ) ( 269 )
Adjustment resulting from the change in charge-off rate (3) — ( 21 ) ( 21 )
Net charge-offs ( 29 ) ( 261 ) ( 290 )
Decrease in expected future recoveries on previously fully charged-off (4) — 41 41
Allowance at end of period $ 180 $ 471 $ 651
Net charge-offs as a percentage of average loans in repayment, (3) .14 % 1.98 %
Net adjustment resulting from the change in charge-off rate as a (3) — % .17 %
Net charge-offs as a percentage of average loans in repayment .14 % 2.15 %
Ending total loans $ 31,702 $ 16,476
Average loans in repayment $ 27,697 $ 16,265
Ending loans in repayment $ 25,382 $ 15,659 (1) $ 28 million of Private Education Loan net charge-offs is in connection with the resolution of certain private legacy loans in bankruptcy. This was previously reserved for in 2023. (2) 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. (3) In third-quarter 2024, the net charge-off rate on defaulted Private Education Loans increased from 82.3 % to 82.7 %. This change resulted in a $ 21 million reduction to the balance of the expected future recoveries on previously fully charged-off loans. (4) At the end of each month, for Private Education Loans that are 212 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:
Nine Months Ended September 30,
(Dollars in millions) 2024
Beginning of period expected future recoveries on previously fully charged-off loans $ 226
Expected future recoveries of current period defaults 32
Recoveries (cash collected) ( 31 )
Charge-offs (as a result of lower recovery expectations) ( 42 )
End of period expected future recoveries on previously fully charged-off loans $ 185
Change in balance during period $ ( 41 ) 2. Allowance for Loan Losses (Continued)
Nine Months Ended September 30, 2023
(Dollars in millions) FFELP Loans Private Education Loans Total
Beginning balance $ 222 $ 800 $ 1,022
Total provision 51 17 68
Charge-offs:
Gross charge-offs ( 53 ) ( 245 ) ( 298 )
Expected future recoveries on current period gross charge-offs — 36 36
Total (1) ( 53 ) ( 209 ) ( 262 )
Adjustment resulting from the change in charge-off rate (2) — ( 25 ) ( 25 )
Net charge-offs ( 53 ) ( 234 ) ( 287 )
Decrease in expected future recoveries on previously fully charged-off (3) — 42 42
Allowance at end of period $ 220 $ 625 $ 845
Net charge-offs as a percentage of average loans in repayment, (2) .21 % 1.56 %
Net adjustment resulting from the change in charge-off rate as a (2) — % .18 %
Net charge-offs as a percentage of average loans in repayment .21 % 1.74 %
Ending total loans $ 39,801 $ 17,958
Average loans in repayment $ 33,591 $ 18,000
Ending loans in repayment $ 31,917 $ 17,249 (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) In third-quarter 2023, the net charge-off rate on defaulted Private Education Loans increased from 81.9 % to 82.3 %. This change resulted in a $ 25 million reduction to the balance of the expected future recoveries on previously fully charged-off loans. (3) At the end of each month, for Private Education Loans that are 212 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
Nine Months Ended September 30,
(Dollars in millions) 2023
Beginning of period expected future recoveries on previously fully charged-off loans $ 274
Expected future recoveries of current period defaults 36
Recoveries (cash collected) ( 35 )
Charge-offs (as a result of lower recovery expectations) ( 43 )
End of period expected future recoveries on previously fully charged-off loans $ 232
Change in balance during period $ ( 42 ) 2. Allowance for Loan Losses (Continued) Key Credit Quality Indicators We assess and determine the collectability of our education loan portfolios by evaluating certain risk characteristics we refer to as key credit quality indicators. Key credit quality indicators are incorporated into the allowance for loan losses calculation. FFELP Loans FFELP Loans are substantially insured and guaranteed as to their principal and accrued interest in the event of default. The key credit quality indicators are loan status and loan type.
FFELP Loan Delinquencies
September 30, 2024 December 31, 2023 September 30, 2023
(Dollars in millions) Balance % Balance % Balance %
Loans in-school/grace/deferment (1) $ 1,342 $ 1,557 $ 1,636
Loans in forbearance (2) 4,978 6,147 6,248
Loans in repayment and percentage of each status:
Loans current 21,975 86.6 % 26,204 86.1 % 26,566 83.2 %
Loans delinquent 31-60 days (3) 948 3.7 1,193 3.9 1,481 4.6
Loans delinquent 61-90 days (3) 599 2.4 746 2.5 949 3.0
Loans delinquent greater than 90 days (3) 1,860 7.3 2,293 7.5 2,921 9.2
Total FFELP Loans in repayment 25,382 100 % 30,436 100 % 31,917 100 %
Total FFELP Loans 31,702 38,140 39,801
FFELP Loan allowance for losses ( 180 ) ( 215 ) ( 220 )
FFELP Loans, net $ 31,522 $ 37,925 $ 39,581
Percentage of FFELP Loans in repayment 80.1 % 79.8 % 80.2 %
Delinquencies as a percentage of FFELP Loans in 13.4 % 13.9 % 16.8 %
FFELP Loans in forbearance as a percentage of 16.4 % 16.8 % 16.4 % (1) Loans for customers who may still be attending school or engaging in other permitted educational activities and are not yet required to make payments on their loans, e.g., residency periods for medical students or a grace period for bar exam preparation, as well as loans for customers who have requested and qualify for other permitted program deferments such as military, unemployment, or economic hardships. (2) Loans for customers who have used their allowable deferment time or do not qualify for deferment, that need additional time to obtain employment 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. Loan type :
(Dollars in millions) September 30, 2024 September 30, 2023 Change
Stafford Loans $ 10,168 $ 12,781 $ ( 2,613 )
Consolidation Loans 18,369 23,199 ( 4,830 )
Rehab Loans 3,165 3,821 ( 656 )
Total loans, gross $ 31,702 $ 39,801 $ ( 8,099 ) 2. Allowance for Loan Losses (Continued) Private Education Loans The key credit quality indicators are credit scores (FICO scores), loan status, loan seasoning, certain loan modifications, the existence of a cosigner and school type. The FICO score is the higher of the borrower or co-borrower score and is updated at least every six months while school type is assessed at origination. The other Private Education Loan key quality indicators are updated quarterly.
Private Education Loan Credit Quality Indicators by Origination Year
September 30, 2024
(Dollars in millions) 2024 2023 2022 2021 2020 Prior Total % of Total
Credit Quality
FICO Scores:
640 and above $ 868 $ 802 $ 1,391 $ 3,448 $ 1,062 $ 7,140 $ 14,711 89 %
Below 640 14 23 77 139 32 1,480 1,765 11
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
Loan Status:
In-school/grace/ $ 58 $ 70 $ 67 $ 88 $ 18 $ 516 $ 817 5 %
Current/90 days or 823 750 1,389 3,480 1,071 7,769 15,282 93
Greater than 90 days 1 5 12 19 5 335 377 2
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
Seasoning (1) :
1-12 payments $ 830 $ 430 $ 29 $ 21 $ 3 $ 42 $ 1,355 8 %
13-24 payments — 337 413 63 9 55 877 6
25-36 payments — — 982 1,704 22 97 2,805 17
37-48 payments — — — 1,754 521 180 2,455 15
More than 48 — — — — 531 8,081 8,612 52
Loans in-school/ 52 58 44 45 8 165 372 2
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
Certain Loan (2) :
Modified $ — $ 8 $ 75 $ 174 $ 55 $ 5,400 $ 5,712 35 %
Non-Modified 882 817 1,393 3,413 1,039 3,220 10,764 65
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
Cosigners:
With cosigner (3) $ 208 $ 257 $ 162 $ 84 $ 20 $ 4,630 $ 5,361 33 %
Without cosigner 674 568 1,306 3,503 1,074 3,990 11,115 67
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
School Type:
Not-for-profit $ 642 $ 780 $ 1,390 $ 3,377 $ 1,045 $ 7,380 $ 14,614 89 %
For-profit 240 45 78 210 49 1,240 1,862 11
Total $ 882 $ 825 $ 1,468 $ 3,587 $ 1,094 $ 8,620 $ 16,476 100 %
Allowance for loan ( 471 )
Total loans, net $ 16,005
Charge-Offs $ — $ ( 3 ) $ ( 8 ) $ ( 13 ) $ ( 3 ) $ ( 234 ) $ ( 261 ) 100 % (1) Number of months in active repayment for which a scheduled payment was received. (2) Loan Modifications represents the historical definition of a troubled debt restructuring (TDR) prior to the implementation of ASU No. 2022-02 on January 1, 2023. Any loan that meets the historical definition of a TDR retains that classification for the life of the loan (including loans that meet that definition in 2023). This includes loans given rate modifications, term extensions or forbearance greater than 3 months in the prior 24-month period. This classification is not intended to reconcile in any way to the modification disclosures required under ASU No. 2022-02. (3) Excluding Private Education Refinance Loans, which do not have a cosigner, the cosigner rate was 66 % for total loans at September 30, 2024. 2. Allowance for Loan Losses (Continued)
Private Education Loan Credit Quality Indicators by Origination Year
September 30, 2023
(Dollars in millions) 2023 2022 2021 2020 2019 Prior Total % of Total
Credit Quality
FICO Scores:
640 and above $ 603 $ 1,641 $ 4,056 $ 1,303 $ 1,226 $ 7,471 $ 16,300 91 %
Below 640 10 53 105 26 43 1,421 1,658 9
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
Loan Status:
In-school/grace/ $ 40 $ 73 $ 87 $ 20 $ 27 $ 462 $ 709 4 %
Current/90 days or 572 1,614 4,062 1,305 1,236 8,126 16,915 94
Greater than 90 days 1 7 12 4 6 304 334 2
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
Seasoning (1) :
1-12 payments $ 576 $ 451 $ 36 $ 8 $ 4 $ 59 $ 1,134 7 %
13-24 payments — 1,185 1,948 17 15 68 3,233 18
25-36 payments — — 2,123 624 44 124 2,915 16
37-48 payments — — — 669 791 202 1,662 9
More than 48 — — — — 402 8,247 8,649 48
Loans in-school/ 37 58 54 11 13 192 365 2
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
Certain Loan (2) :
Modified $ — $ 28 $ 116 $ 43 $ 78 $ 5,926 $ 6,191 34 %
Non-Modified 613 1,666 4,045 1,286 1,191 2,966 11,767 66
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
Cosigners:
With cosigner (3) $ 159 $ 183 $ 97 $ 24 $ 8 $ 5,410 $ 5,881 33 %
Without cosigner 454 1,511 4,064 1,305 1,261 3,482 12,077 67
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
School Type:
Not-for-profit $ 576 $ 1,604 $ 3,919 $ 1,270 $ 1,181 $ 7,483 $ 16,033 89 %
For-profit 37 90 242 59 88 1,409 1,925 11
Total $ 613 $ 1,694 $ 4,161 $ 1,329 $ 1,269 $ 8,892 $ 17,958 100 %
Allowance for loan ( 625 )
Total loans, net $ 17,333
Charge-Offs $ — $ ( 5 ) $ ( 7 ) $ ( 4 ) $ ( 5 ) $ ( 213 ) $ ( 234 ) 100 % (1) Number of months in active repayment for which a scheduled payment was received. (2) Loan Modifications represents the historical definition of a troubled debt restructuring (TDR) prior to the implementation of ASU 2022-02 on January 1, 2023. Any loan that meets the historical definition of a TDR retains that classification for the life of the loan (including loans that meet that definition in 2023). This includes loans given rate modifications, term extensions or forbearance greater than 3 months in the prior 24-month period. This classification is not intended to reconcile in any way to the new modification disclosures required under ASU 2022-02. (3) Excluding Private Education Refinance Loans, which do not have a cosigner, the cosigner rate was 65 % for total loans at September 30, 2023 . 2. Allowance for Loan Losses (Continued)
Private Education Loan Delinquencies
September 30, 2024 December 31, 2023 September 30, 2023
(Dollars in millions) Balance % Balance % Balance %
Loans in-school/grace/deferment (1) $ 372 $ 360 $ 365
Loans in forbearance (2) 445 363 344
Loans in repayment and percentage of each status:
Loans current 14,827 94.7 % 15,935 94.9 % 16,435 95.3 %
Loans delinquent 31-60 days (3) 282 1.8 308 1.8 304 1.8
Loans delinquent 61-90 days (3) 173 1.1 173 1.0 176 1.0
Loans delinquent greater than 90 days (3) 377 2.4 380 2.3 334 1.9
Total loans in repayment 15,659 100 % 16,796 100 % 17,249 100 %
Total loans 16,476 17,519 17,958
Allowance for losses ( 471 ) ( 617 ) ( 625 )
Loans, net $ 16,005 $ 16,902 $ 17,333
Percentage of loans in repayment 95.0 % 95.9 % 96.1 %
Delinquencies as a percentage of loans in 5.3 % 5.1 % 4.7 %
Loans in forbearance as a percentage of 2.8 % 2.1 % 2.0 % (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., internship periods, as well as 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 . 2. Allowance for Loan Losses (Continued) Loan Modifications to Borrowers Experiencing Financial Difficulty We adjust the terms of Private Education Loans for certain borrowers when we believe such changes will help our customers better manage their student loan obligations, achieve better outcomes and increase the collectability of the loans. These changes generally take the form of a temporary interest rate reduction, a temporary forbearance of payments, a temporary interest only payment, and a temporary interest rate reduction with a permanent extension of the loan term. The effect of modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The model design predicts borrowers that will have financial difficulty in the future and require loan modification and increased life of loan default risk. Under our current forbearance practices, temporary hardship forbearance of payments generally cannot exceed 12 months over the life of the loan. However, exceptions can be made in cases where borrowers have shown the ability to make a substantial number of monthly principal and interest payments and in those cases borrowers can be granted up to 24 months of hardship forbearance over the life of the loan. We offer other administrative forbearances (e.g., death and disability, bankruptcy, military service, and disaster forbearance) that are either required by law (such as the Service members Civil Relief Act) or are considered separate from our active loss mitigation programs and therefore are not considered to be loan modifications requiring disclosure under ASU No. 2022-02. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim. Further, FFELP loan modification events are either legal entitlements subject to regulatory-driven eligibility criteria or addressed in the promissory note terms, so we do not consider these events as a component of our loan modification programs. 2. Allowance for Loan Losses (Continued) The following tables show the amortized cost basis as of September 30, 2024 and 2023 of the loans to borrowers experiencing financial difficulty that were modified during the respective period.
Three Months Ended September 30, 2024
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
(Dollars in millions) Interest Rate Reductions (1) More Than an Insignificant Payment Delay (2) Combination Rate Reduction and Term Extension
Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type
Private Education $ 551 3.3 % $ 294 1.8 % $ 39 .2 %
Three Months Ended September 30, 2023
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
(Dollars in millions) Interest Rate Reductions (1) More Than an Insignificant Payment Delay (2) Combination Rate Reduction and Term Extension
Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type
Private Education $ 592 3.3 % $ 305 1.7 % $ 42 .2 %
Nine Months Ended September 30, 2024
(Dollars in millions) Interest Rate Reductions (1) More Than an Insignificant Payment Delay (2) Combination Rate Reduction and Term Extension
Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type
Private Education $ 1,511 9.2 % $ 770 4.7 % $ 108 .7 %
Nine Months Ended September 30, 2023
(Dollars in millions) Interest Rate Reductions (1) More Than an Insignificant Payment Delay (2) Combination Rate Reduction and Term Extension
Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type Amortized Cost % of Loan Type
Private Education $ 1,488 8.3 % $ 773 4.3 % $ 119 .7 % (1) As of September 30, 2024 and 2023, there was $ 1.1 billion and $ 1.2 billion, respectively, of loans in the interest rate reduction program. (2) More Than an Insignificant Payment Delay includes loans granted more than 3 months of short-term interest only payments or hardship forbearance. 2. Allowance for Loan Losses (Continued) For those loans modified in the three and nine months ended September 30, 2024 and 2023, the following tables show the impact of such modification.
Three Months Ended September 30, 2024
Loan Type Interest Rate Reductions More Than an Insignificant Payment Delay Combination Rate Reduction and Term Extension
Private Education Loans Reduced the weighted average contractual rate from 13.2 % to 5.5 % Added an average 5 months to the remaining life of the loans Added an average 7 years to the remaining life of the loans and reduced the weighted average contractual rate from 12.7 % to 5.4 %.
Three Months Ended September 30, 2023
Loan Type Interest Rate Reductions More Than an Insignificant Payment Delay Combination Rate Reduction and Term Extension
Private Education Loans Reduced the weighted average contractual rate from 13.4 % to 5.5 % Added an average 6 months to the remaining life of the loans Added an average 7 years to the remaining life of the loans and reduced the weighted average contractual rate from 13.0 % to 5.4 %.
Nine Months Ended September 30, 2024
Loan Type Interest Rate Reductions More Than an Insignificant Payment Delay Combination Rate Reduction and Term Extension
Private Education Loans Reduced the weighted average contractual rate from 13.3 % to 5.4 % Added an average 5 months to the remaining life of the loans Added an average 7 years to the remaining life of the loans and reduced the weighted average contractual rate from 12.7 % to 5.3 %.
Nine Months Ended September 30, 2023
Loan Type Interest Rate Reductions More Than an Insignificant Payment Delay Combination Rate Reduction and Term Extension
Private Education Loans Reduced the weighted average contractual rate from 13.1 % to 5.2 % Added an average 6 months to the remaining life of the loans Added an average 8 years to the remaining life of the loans and reduced the weighted average contractual rate from 12.6 % to 5.2 %. 2. Allowance for Loan Losses (Continued) The following table provides the amount of loan modifications for which a charge-off or payment default occurred in the respective period and within 12 months of the loan receiving a loan modification. We define payment default as 60 days or more past due for purposes of this disclosure. We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts.
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2024 2023 2024 2023
Modified loans (amortized cost) (1) $ 127 $ 65 $ 284 $ 123
Payment default (par) $ 129 $ 67 $ 290 $ 129
Charge-offs (par) $ 12 $ 3 $ 14 $ 5 (1) For the three months ended September 30, 2024 and 2023 , the modified loans include $ 96 million and $ 44 million, respectively, of Interest Rate Reduction, $ 6 million and $ 3 million, respectively, of Combination Rate Reduction and Term Extension, and $ 25 million and $ 18 million, respectively, of More Than Insignificant Payment Delay . For the nine months ended September 30, 2024 and 2023, the modified loans include $ 216 million and $ 78 million, respectively, of Interest Rate Reduction, $ 14 million and $ 6 million, respectively, of Combination Rate Reduction and Term Extension, and $ 54 million and $ 39 million, respectively, of More Than Insignificant Payment Delay . The following table provides the performance and related loan status of Private Education Loans that have been modified during the 12-month period preceding the balance sheet dates below.
(Dollars in millions) Payment Status (Amortized Cost)
Loan Status September 30, 2024 December 31, 2023 September 30, 2023
Loans in school/deferment $ 14 $ 22 $ 16
Loans in forbearance 121 93 67
Loans current 1,969 2,199 2,039
Loans delinquent 31 - 60 days 137 160 133
Loans delinquent 61 - 90 days 64 96 61
Loans delinquent greater than 90 days 83 159 64
Total modified loans $ 2,388 $ 2,729 $ 2,380 |
