EL7.AI
StocksMediumUpdated×3•Originally published 22 October 2026•Updated 23 October 2026•
4 min read

Sallie Mae posts $35.904 million loss, cuts earnings outlook despite lending growth

Key Facts

1Sallie Mae posted a loss attributable to common stock of $35.904 million in the third quarter of 2026, compared with earnings of $131.856 million a year earlier.
2The company cut its 2026 diluted earnings per share outlook to $1.95–$2.05 from $3.10–$3.20.
3Provisions for credit losses rose to $214 million, compared with $126 million in the previous quarter and $179 million a year earlier.
4The company raised its 2026 net loan charge-off outlook to $400–$420 million from $365–$385 million.
5The delinquency rate for loans in repayment rose to 4.2%, compared with 3.7% at the end of the previous quarter and 4.0% a year earlier.

Sallie Mae posted a loss attributable to common stock of $35.904 million in the third quarter of 2026, according to its earnings release, while cutting its annual earnings outlook. The company had reported earnings attributable to common stock of $131.856 million in the third quarter of 2025. Diluted earnings per share swung to a loss of $0.19 for the period, compared with a profit of $0.63 in the same period last year. The company attributed the loss per share primarily to provisions and expenses associated with record lending growth. Provisions for credit losses charged against earnings rose to $214 million during the quarter, according to the official earnings presentation. That compared with provisions of $126 million in the second quarter of 2026 and $179 million in the third quarter of 2025.

In the lending business, which the company linked to higher provision and expense burdens, private education loan originations totaled about $3.4 billion in the third quarter of 2026. Sallie Mae said in its earnings release that originations rose 15% from the same period last year. The expansion came in a quarter in which the company recorded record lending growth, according to its explanation of the period's results. The increase included new loans to graduate students, which grew 119% year on year. The company linked growth in this segment to PLUS program reform, among the factors cited in its earnings release. The expansion in private education lending thus coincided with the company's swing to a quarterly loss, amid the burdens management attributed to that growth.

On interest income, Sallie Mae's earnings presentation showed net interest income of $339 million in the third quarter of 2026. That rose from $333 million in the second quarter of the same year but remained below the $373 million recorded in the third quarter of 2025. The cost of funds during the current quarter was 4.21%, compared with 4.13% in the previous quarter. On a year-on-year basis, the cost of funds remained below its level of 4.24% in the same period last year. On operating efficiency, the reported efficiency ratio rose to 58.8% during the third quarter, according to the company's official presentation. That compared with 48.6% in the second quarter of 2026 and 33.1% in the third quarter of 2025.

Private education loan sales declined in the third quarter of 2026, totaling $318 million, according to the earnings presentation. The company had sold $420 million in private education loans in the second quarter of the same year. In the third quarter of 2025, sales of these loans totaled $1,936 million, leaving sales lower on both a quarterly and annual basis. On the credit balance sheet, the allowance for losses as a percentage of private education loan exposure stood at 5.89% at the end of the third quarter of 2026. The loss coverage ratio thus held steady at its level at the end of the second quarter of the same year, according to the figures presented by the company. The ratio remained below its level of 5.93% at the end of September 2025.

Credit quality indicators showed net loan charge-offs declining quarter on quarter while remaining above their year-earlier level, according to Sallie Mae's earnings presentation. Net charge-offs totaled $90.386 million in the third quarter of 2026, compared with $112.554 million in the second quarter. Net charge-offs had totaled $77.531 million in the third quarter of 2025. Meanwhile, the delinquency rate for loans in repayment rose to 4.2% at the end of September 2026. That compared with 3.7% at the end of June of the same year, according to the quarterly comparison provided by the company. The delinquency rate also exceeded its level of 4.0% at the end of September 2025.

In its updated outlook for 2026, Sallie Mae cut its diluted earnings per share range to between $1.95 and $2.05, according to the earnings release. Its previous outlook for the same year had projected earnings of between $3.10 and $3.20 per share. The company also raised its annual net loan charge-off estimates to a range of $400 million to $420 million. The updated range compared with its previous estimates of between $365 million and $385 million for 2026. The company had designated Thursday, October 22, 2026, as the date for its earnings webcast in its official announcement. The announcement stated that the call was "scheduled for Thursday, October 22, at 5:30 p.m. Eastern Time."