Sallie Mae Soars: Strong Q2 2026 Results Reveal a Bright Future
It's been just over a year since Federal PLUS reform reshaped the higher education financing landscape, creating the potential for a $4.5 billion-$5 billion increase in annual originations for Sallie Mae over the next several years.
The company has been diligently preparing for this exciting opportunity to serve more students and families, strengthening its product offering, investing in capabilities, and positioning itself for its first peak season under the revised federal programs.
"We have successfully delivered all of the additional products, features, and functions we planned for this peak season," announced Jon Witter, CEO. "These trends, if sustained, reinforce our confidence in both our 2026 originations estimates and the longer-term opportunity presented by changes to the PLUS programs."
The company's performance has been impressive, with GAAP diluted EPS coming in at $0.29 per share, up nearly 4.5% from the prior year quarter. Loan originations were $716 million, a significant increase from last year.
Credit trends within Sallie Mae's portfolio are generally consistent with or better than expectations. The average FICO score increased from 754-755, while cosigner rates remained strong at 84%. Peter Graham, Co-President and CFO, stated that "credit quality improved modestly year-over-year."
However, the company has observed activity affecting a small segment of borrowers who are progressing directly through delinquency to default. Sallie Mae believes many of these borrowers are engaging with debt resolution providers whose services are being marketed as consolidation or refinancing solutions.
The company is committed to protecting customer interests and ensuring that its recovery and settlement strategies are fully aligned with the underlying value of its loans. In response, they have taken deliberate steps to increase control over post-default recoveries, which may create an in-year headroom to potential recoveries.
Net charge-offs for the quarter were $113 million, up from $94 million in the prior year quarter. Despite this, Sallie Mae remains optimistic about its credit performance and expects internal efforts to equal or exceed previous estimated recovery levels over time."
