SLM: 3 Key Takeaways for Long-Term Investors
Higher charge-offs and lower earnings guidance offset the strategic wins from new funding partnerships and loan retention.
SLM, the education lender, revealed three crucial insights for long-term investors during its latest earnings call on October 22, 2026. The company forged a strategic alliance with Sixth Street, committing to sell newly originated private education loans that provide recurring program management fees and servicing revenue. This partnership adds another layer to SLM's funding options, which also includes traditional bank deposits and loan sales.
In a strategic move, SLM decided against executing a whole-loan sale due to unfavorable market conditions, opting to retain the assets to earn a 5% net interest margin. This decision resulted in a reduced full-year earnings per share guidance to between $1.95 and $2.05, as retaining the loans on their balance sheet is seen as a more valuable option in the long run.
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