Sallie Mae’s $0.19-per-share loss prompts cut to 2026 earnings outlook
Key Facts
Sallie Mae reported a diluted loss of $0.19 per share for the third quarter on Oct. 22, 2026, compared with earnings of $0.63 per share in the same period of 2025. Net loss attributable to common stock was $35.904 million, versus net income of $131.856 million a year earlier. The per-share loss was below analysts’ estimate of earnings of $0.17, according to data cited by Investing.com. Revenue was $375 million, compared with a consensus estimate of $457.32 million and revenue of $404 million in the third quarter of 2025. The results put pressure on the company’s annual outlook, as it cut its earnings-per-share forecast and raised its net charge-off estimate.
Sallie Mae revised its 2026 net charge-off outlook to a range of $400–420 million from a previous estimate of $365–385 million. The change followed an increase in net charge-offs to $90.386 million in the third quarter, compared with $77.531 million in the same period last year. The company attributed the increase mainly to non-compliant practices by third parties handling debt resolution and to its change in collection strategy. It said borrowers adopted the new strategies more slowly than expected. In parallel, it cut its full-year diluted earnings-per-share forecast to $1.95–2.05 from $3.10–3.20.
The company said the loss was tied mainly to provisions and expenses that coincided with the highest year-over-year growth in private education loan originations in its history. Originations totaled $3.4 billion in the third quarter, up 15% from the same period a year earlier. While maintaining its full-year origination growth outlook at 12% to 14%, the company’s lending growth estimate was unchanged despite the earnings forecast cut. Net interest income, however, was $339 million, down from $373 million a year earlier. The company said the $34 million year-over-year decline was tied to a 33-basis-point decrease in net interest margin and a $0.6 billion decline in the average private education loan balance.
Other revenue also declined, with total non-interest income at $36 million in the third quarter, compared with $173 million a year earlier. Meanwhile, non-interest expenses rose to $220.702 million from $180.404 million in the same period. On loan metrics, delinquencies were 4.2% of loans in repayment as of Sept. 30, 2026, versus 4.0% a year earlier. Loans in forbearance rose to 2.3% of total loans from 2.0% on the comparable date. The allowance for credit losses as a percentage of private education loan exposure was 5.89%, down from 5.93% a year earlier.
Market data showed Sallie Mae shares closed at $19.42 on Oct. 23, after closing at $21.76 in the previous session. In after-hours trading on Thursday, the stock fell 3.9%, after ending the regular session down 4.49%, according to Investing.com. The company reported its results on Oct. 22 and hosted its earnings call the same day at 5:30 p.m. Eastern time. It also began a restructuring program in October that includes reducing its workforce by less than 5% and incurring contract termination and other exit costs. The company estimated program expenses at between $16 million and $18 million and expects to complete most of the implementation and incur most of the expenses by the end of the second quarter of 2027.