Summary of Navient's Strategy Update Conference Call Company Overview - **Company**: Navient - **Division Highlighted**: Earnest, focusing on student loan refinancing and personal loans Key Points and Arguments Phase One and Phase Two Strategy - **Phase One**: Aimed at maximizing cash flows from legacy portfolios, resulting in an additional $2 billion of discretionary cash for growth or distributions [5][6] - **Phase Two**: Focused on growing earnings and changing market perception of Navient from a student lender to a specialty finance company [5][6][7] Earnest's Role and Business Model - **Earnest**: Represents Navient's student loan refinancing and personal loan business, with a strategy to generate long-term relationships with high lifetime value customers [9][10] - **Customer Profile**: Average customer age is in the early to mid-30s, with an income of approximately $120,000 and a FICO score above 770, indicating a high potential customer base [11] Financial Performance and Projections - **2025 Financial Snapshot**: Expected operating profit of around $70 million with $10 billion in outstanding loans, primarily securitized [12][14] - **Return on Equity (ROE)**: Aiming for a pre-tax ROE of about 12%, with potential for significant increases through optimized securitization strategies [42][45] Securitization Strategy - **Securitization Changes**: Transitioning from horizontal to vertical securitization to maximize return on equity, despite lower net interest income [20][22] - **Loan Sales**: Exploring loan sales as a method to remove loans from the balance sheet and accelerate income [22][23] Market Opportunities - **Total Addressable Market (TAM)**: - Education and graduate lending market estimated at $12 billion annually [32] - Student loan refinancing market projected to grow from $8 billion in 2025 to $11 billion in 2026 [32] - Personal lending market expected to be around $36 billion by 2028, targeting existing customers [33][34] Competitive Landscape - **Market Positioning**: Aiming to be competitive at lower origination levels compared to peers like Upstart and SoFi, with a focus on maintaining low sales and marketing expenses [26][27] - **Customer Acquisition**: Approximately $350 million spent to acquire the current customer base, with plans to monetize through multiple products as customer needs evolve [30] Technology and Operations - **New Lending Platform**: Launched a modular lending platform to improve operational efficiency and increase loan automation, enhancing conversion rates [17][18] - **Data Science Integration**: Expanding the use of machine learning for credit decisioning and pricing to improve competitiveness [18] Future Outlook - **Growth Projections**: Anticipating a significant increase in originations, with a goal of reaching around $4 billion in originations in the near term [40] - **Transition Year**: 2026 is seen as a pivotal year for transitioning into personal lending and expanding market presence [39] Additional Important Insights - **Talent Acquisition**: Efforts to attract industry talent to enhance operational capabilities and market competitiveness [12][13] - **Investor Relations**: Emphasis on improved disclosures to better communicate the value of Earnest as part of Navient [28][29] This summary encapsulates the strategic direction and financial outlook of Navient, particularly focusing on the Earnest division and its role in the company's growth strategy.

Earnest's Strategy and Financial Performance - Navient's restructuring program has increased future cash flows, adding approximately $2 billion to existing net cash flow for growth investments or distributions[13] - Earnest aims to achieve overall efficiency equal to or greater than peers at lower breakeven volumes[15] - Earnest has over 375,000 unique customer relationships as of September 30, 2025, with over 40,000 expected to be added in 2026[20] - For 2025E, Earnest's total revenue is projected to be $219 million, with net interest income of $168 million and servicing revenue of $51 million[26] - Earnest's total assets are projected to be $10,007 million, with securitized loans of $8,255 million and equity of $724 million as of December 31, 2025[28] Growth and Efficiency Improvements - Annual originations are expected to increase 2.5x from $971 million in 2023 to $2,400 million in 2025E[37] - Quarterly rate check volume (Q3) for SLR is expected to increase 3.9x from $1.4 billion in 2023 to $5.4 billion in 2025E[37] - Sales & Marketing expenses as a percentage of originations are expected to decrease by 59% from 5.6% in 2023 to 2.3% in 2025E[37] - Loan automation (Q3) is expected to increase 1.4x from 57% in 2023 to 79% in 2025E[37] Market Opportunity and Future Plans - The total Earnest opportunity in non-education loans is projected to be $47 billion in 2026 and $101 billion in 2028[46]

Financial Performance - Third-quarter 2025 net loss was $86 million ($0.87 diluted loss per share), compared to a net loss of $2 million ($0.02 diluted loss per share) in the same quarter last year, representing a significant increase in losses [47][53]. - Core Earnings net loss for the third quarter was $83 million ($0.84 diluted loss per share), compared to a profit of $160 million ($1.45 diluted per share) in the prior year [48]. - Net income for the third quarter of 2025 was $35 million, compared to $27 million in the same quarter of 2024, reflecting a 30% increase [67]. - Net income (loss) for the three months ended September 30, 2025, was a loss of $86 million [123]. - Net income for the nine months ended September 30, 2025, was $(75) million, compared to $107 million for the same period in 2024 [186]. Loan Performance - The provision for loan losses totaled $168 million, with $155 million attributed to Consumer Lending, reflecting elevated delinquency balances and macroeconomic forecasts [50][54]. - Delinquencies greater than 90 days increased to $2.5 billion from $1.9 billion year-over-year [67]. - The delinquency rate for FFELP loans greater than 90 days increased to 10.5% as of September 30, 2025, from 8.7% as of December 31, 2024 [101]. - The percentage of loans in repayment increased to 82.8% as of September 30, 2025, compared to 80.1% on September 30, 2024 [204]. - Loans delinquent greater than 90 days increased to $2,539 million, representing 10.5% of loans in repayment as of September 30, 2025, compared to 7.3% on September 30, 2024 [204]. Capital Management - Total capital returned to shareholders in Q3 2025 was $42 million, down from $50 million in Q3 2024 [28]. - The company has authorized a new $100 million share repurchase program in October 2025, in addition to approximately $26 million of unused authorization as of September 30, 2025 [26]. - The company repurchased $26 million of common shares and authorized a new $100 million share repurchase program [50]. - The company repurchased a total of 2.0 million shares at an average price of $13.19 during the third quarter of 2025 [160]. - The company has approximately $26 million of unused authorization remaining under its share repurchase programs as of September 30, 2025 [160]. Operational Efficiency - Operating expenses were $105 million, a decrease of 43% from $184 million in the prior year [52]. - Operating expenses decreased by $200 million, primarily due to a decline in business processing expenses from the sale of the government services and healthcare services businesses [61]. - The company reduced its headcount by over 80% since the beginning of 2024 as part of its strategic actions to simplify the company [33]. - Total expenses for the quarter were $109 million, with direct operating expenses amounting to $61 million [123]. - Total expenses amounted to $341 million, with direct operating expenses at $189 million and unallocated shared services expenses at $144 million [127]. Loan Originations - The company originated $1.8 billion of Private Education Loans in the first nine months of 2025, a 73% increase from $1.0 billion a year ago [22]. - Total originations of Private Education Loans nearly doubled to $1.8 billion in the first nine months of 2025 compared to $1.0 billion a year ago [36]. - The company originated $788 million in Private Education Loans, marking a 58% increase compared to the previous year [50]. - The company originated $687 million in new loans during the three months ended September 30, 2025, compared to $407 million in the same period of 2024 [100]. - The company originated $788 million of Private Education Loans in Q3 2025, a 58% increase compared to $500 million in Q3 2024 [80]. Asset Management - Ending total education loans, net, stood at $44.4 billion, down from $47.5 billion year-over-year [45]. - Total assets decreased to $49.3 billion as of September 30, 2025, down from $51.8 billion at the end of 2024, representing a decline of approximately 4.8% [169]. - Total liabilities decreased to $46.87 billion, down from $49.15 billion, reflecting a decrease of approximately 4.6% [169]. - The company reported unrestricted cash of $571 million as of September 30, 2025, down from $1.143 billion a year earlier [111]. - The total balance of loans in forbearance for Private Education Loans decreased from $445 million as of September 30, 2024, to $239 million as of September 30, 2025, a reduction of approximately 46.3% [102]. Interest Income and Expenses - Total interest income decreased by 18% to $781 million in the third quarter, down from $948 million in the same period last year [52]. - The company reported a total interest expense of $639 million, leading to a net interest income of $142 million before provisions [123]. - Total interest income for the three months ended September 30, 2025, was $781 million, with education loans contributing $760 million [123]. - Total interest income for the nine months ended September 30, 2025, was $2,361 million, down from $2,948 million in 2024, representing a decrease of approximately 20% [172]. - The company incurred $4 million in restructuring and other reorganization expenses during the quarter [123]. Future Outlook - The passage of the "Big Beautiful Bill" on July 3, 2025, is expected to drive increased demand for private in-school graduate loans, presenting a growth opportunity for Navient [40]. - The company plans to focus on market expansion and new product development as part of its future strategy [125]. - The company anticipates continued focus on market expansion and new product development in the upcoming quarters [127]. - The company has no further obligations to provide transition services for its government services business as of October 2025 [89]. - The company expects to fund ongoing liquidity needs, including the repayment of $0.5 billion of senior unsecured notes maturing in the short term and $4.8 billion maturing in the long term, with 69% maturing by 2031 [109].

Financial Data and Key Metrics Changes - The company reported core earnings per share of $0.29 for the quarter, adjusting for significant items, while the core loss per share was $0.84 [14] - The expected life of loan cash flows increased by approximately $195 million due to lower prepayment speeds and updated assumptions [10][11] - The company announced a new share repurchase authorization of $100 million, providing additional capacity to purchase future value at a discount [4] Business Line Data and Key Metrics Changes - Total loan originations in the Consumer Lending segment grew to $788 million, a 58% increase from the previous year, driven by over 100% growth in Refi originations [17] - The Refi loans accounted for $528 million, marking the highest quarterly volume this year, while in-school lending reached a record $260 million [5][17] - The net interest margin for the Consumer Lending segment was 239 basis points, an increase from 232 basis points in the previous quarter [18] Market Data and Key Metrics Changes - The company experienced a decline in total delinquencies from 19% to 18.1%, while the net charge-off rate increased by 1 basis point to 15 basis points [16] - The provision expense for the quarter was $168 million, with $151 million related to previously originated loans, reflecting elevated delinquency rates [14][15] Company Strategy and Development Direction - The company is focused on aggressively reducing expenses and has exceeded its initial goal of $400 million in run-rate expense reductions ahead of schedule [8][22] - The company plans to provide an update on the growth strategy for its Earnest business on November 19th, indicating ongoing strategic initiatives [13] - The company is well-positioned to capitalize on opportunities in the Refi market, particularly as federal loan policies become less attractive to borrowers [79] Management's Comments on Operating Environment and Future Outlook - Management noted that the expected future cash flows increased due to changes in public policy and customer repayment behavior, with a focus on legacy loan portfolios [10][29] - The outlook for the fourth quarter is a range of $0.30-$0.35 per share, which would place the company within the full-year guidance of $1-$1.20 per share [15] - Management expressed confidence in the ability to finance rapid asset growth through ABS issuances, indicating a strong capital position [48][49] Other Important Information - The company completed its fourth term ABS financing of the year, backed by Refi loan collateral, demonstrating strong investor demand [12] - The total reserve build in the quarter was driven by various factors, including changes in borrower behavior and macroeconomic outlook [21] Q&A Session Summary Question: Regarding the provision and delinquencies noted - Management explained that the provision expense reflects incremental defaults and lower prepayment rates, which are expected to continue [26][29] Question: Where is the credit weakness coming from? - Management indicated that the majority of the weakness is focused on legacy portfolios, with some changes in other products but not as significant [38] Question: Breakdown of the $151 million provision - Management stated that the majority of the provision is related to trends in the private legacy portfolio, with macroeconomic conditions contributing only a small part [75] Question: Outlook on competition and market opportunities - Management highlighted that the company is well-positioned to take advantage of opportunities in the market, particularly in graduate loan originations [84] Question: Potential Grad PLUS opportunity - Management estimated the Grad PLUS market to be around $14 billion, with expectations for significant expansion opportunities [91]

Financial Data and Key Metrics Changes - The company reported core earnings per share of $0.29 for the quarter, adjusting for significant items, while the core loss per share was $0.84 [14][4] - The expected life of loan cash flows increased by approximately $195 million due to lower prepayment speeds and updated assumptions [10][11] - The company announced a new share repurchase authorization of $100 million to enhance shareholder value [4] Business Line Data and Key Metrics Changes - Total loan originations in the Consumer Lending segment grew to $788 million, a 58% increase year-over-year, driven by over 100% growth in refinance originations [17] - The Federal Education Loan segment's net interest margin for Q3 was 84 basis points, up 14 basis points from the previous quarter [15] - The Consumer Lending segment's net interest margin was 239 basis points, compared to 232 basis points in the second quarter [18] Market Data and Key Metrics Changes - The company experienced a record high in school lending originations of $260 million, the highest quarterly volume in its history [5] - Delinquency rates improved from 19% to 18.1%, while the net charge-off rate increased slightly to 15 basis points [16] - The company raised its full-year total loan originations guidance to approximately $2.4 billion, over 30% higher than initial guidance [17] Company Strategy and Development Direction - The company is focused on reducing operating expenses and has exceeded its initial goal of $400 million in run-rate expense reductions ahead of schedule [8][22] - The company aims to capitalize on growth opportunities in the refinance market, particularly among high-quality borrowers, as interest rates potentially decrease [6][13] - The company plans to provide an update on its growth strategy for the Earnest business on November 19th [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment is influenced by changes in public policy and borrower repayment behavior, which have affected delinquency and charge-off rates [27][66] - The outlook for the fourth quarter is a range of $0.30 to $0.35 per share, reflecting continued strong origination growth and expense reductions [15][23] - Management expressed confidence in the company's ability to finance rapid asset growth through ABS issuances and other financing strategies [49][50] Other Important Information - The company completed its fourth term ABS financing of the year, backed by refinance loan collateral, indicating strong investor demand [12] - The total reserve build in the quarter was driven by various factors, including changes in borrower behavior and macroeconomic outlook [20][21] Q&A Session Summary Question: Inquiry about provision and delinquencies - Management explained that the provision expense reflects incremental defaults and lower prepayment rates, particularly in legacy portfolios [26][28] Question: Clarification on credit weakness sources - Management indicated that the majority of credit weakness is concentrated in legacy portfolios, with some changes in newer products but not as significant [38] Question: Discussion on reserve rate stabilization - Management noted that the reserve rate is influenced by new originations and the quality of loans, with expectations for the allowance to decrease as the portfolio runs off [57] Question: Impact of macroeconomic conditions on provisions - Management stated that macroeconomic conditions contributed minimally to the current provision, with the majority driven by trends in the legacy portfolio [77] Question: Outlook on competition and market opportunities - Management highlighted the company's strong position in the market and the potential for growth in both refinance and in-school lending segments [86][88]

Financial Data and Key Metrics Changes - The company reported core earnings per share of $0.29 for the quarter, adjusting for significant items, while the core loss per share was $0.84 [12][4] - The expected life of loan cash flows increased by approximately $195 million due to lower prepayment speeds and updated assumptions [9][10] - The company announced a new share repurchase authorization of $100 million to enhance shareholder value [4] Business Line Data and Key Metrics Changes - Total loan originations in the Consumer Lending segment grew to $788 million, a 58% increase year-over-year, driven by over 100% growth in refinance originations [15] - The Federal Education Loan segment's net interest margin for Q3 was 84 basis points, up 14 basis points from the previous quarter [13] - In-school lending reached a record high of $260 million, marking the highest quarterly volume in the company's history [5] Market Data and Key Metrics Changes - The company experienced strong investor demand for asset-backed securities (ABS), completing its fourth term ABS financing of the year [11][20] - The total reserve build in the quarter was driven by changes in borrower behavior, elevated delinquency rates, and macroeconomic outlook changes [17][18] Company Strategy and Development Direction - The company is focused on aggressively reducing expenses, exceeding its initial goal of $400 million in run-rate expense reductions ahead of schedule [6][8] - The company aims to capitalize on growth opportunities in the refinance market, particularly as federal loan policies become less attractive to borrowers [88][90] - The company plans to provide an update on its growth strategy for the Earnest business on November 19th [11] Management's Comments on Operating Environment and Future Outlook - Management noted that delinquency rates are improving but remain elevated, reflecting ongoing credit trends and lower prepayment activity [12][25] - The outlook for Q4 is a range of $0.30 to $0.35 per share, with expectations of continued strong origination growth [13][21] - Management emphasized the importance of macroeconomic conditions and public policy changes in shaping future performance [71][72] Other Important Information - The company has completed its final obligations under the Transition Services Agreement, allowing for further expense reductions [7][18] - The allowance for loan loss, excluding expected future recoveries, stands at $765 million for the entire education loan portfolio [17] Q&A Session Summary Question: Can you discuss the provision and delinquencies noted on the call? - Management explained that the provision expense reflects incremental defaults due to changes in borrower repayment behavior and macroeconomic conditions, particularly affecting legacy portfolios [24][25] Question: Where within consumer lending are you seeing credit weakness? - The majority of credit weakness is concentrated in legacy portfolios, with some changes in newer products but not as significant [36][38] Question: What is the breakdown of the $151 million provision? - Management indicated that the macroeconomic condition piece is relatively small, with the majority driven by trends in the private legacy portfolio [84][86] Question: How do you view the competition going forward? - The company believes it is well-positioned to take advantage of opportunities in the market, particularly in graduate loan originations and refinancing [96][98] Question: What is the potential opportunity in the Grad PLUS market? - Management estimates the Grad PLUS market to be around $14 billion, with expectations of significant expansion opportunities [103]

Financial Performance - Core Earnings per Share was $(0.84), but adjusted for significant items, it was $0.29[4] - The company reported a GAAP net loss of $(86) million and a Core Earnings net loss of $(83) million[15, 42] - Total expenses for the quarter were $109 million, compared to $202 million a year ago, reflecting increased efficiency[28, 30] Strategic Actions and Cost Reductions - The company is on track to exceed its original operating expense reduction target of $400 million[6, 11] - Phase 1 strategic actions focused on cost reductions are expected to result in expense reductions exceeding $400 million[11] - Total Shared and Corporate Expense is adjusted to $204 million after accounting for various expense reductions[12] Loan Portfolio and Originations - Consumer Lending originated $788 million of Private Education Loans, a 58% increase compared to the year-ago quarter[19] - Refinance loan originations were $528 million, compared to $262 million in the same quarter of the previous year[19] - The Federal Education Loan portfolio is projected to generate $1.9 billion through the end of 2029[57] Allowance for Loan Losses - The total provision expense was $168 million in 3Q25[24] - This includes $13 million for the FFELP portfolio and $155 million for the Private Education portfolio[24]

Financial Performance - Navient reported a GAAP net loss of $86 million, translating to a diluted loss per share of $0.87 for Q3 2025[3]. - Core Earnings net loss was $83 million, with a diluted loss per share of $0.84, impacted by a $168 million provision for loan losses[3]. - Net income for Q3 2025 was $(86) million, a decrease from $14 million in Q2 2025 and $(2) million in Q3 2024[19]. - Diluted earnings per share for Q3 2025 was $(0.87), compared to $0.13 in Q2 2025 and $(0.02) in Q3 2024[21]. - The company reported a significant increase in net income (loss) before income tax expense to $(117) million in Q3 2025, down from $18 million in Q2 2025 and $12 million in Q3 2024[21]. - For the three months ended September 30, 2025, the net loss was $86 million, or $0.87 diluted loss per common share, compared to a net loss of $2 million, or $0.02 diluted loss per common share for the same period in 2024[24]. - The net loss for the nine months ended September 30, 2025, was $75 million, or $0.75 diluted loss per share, compared to net income of $107 million, or $0.95 diluted earnings per share for the same period last year[29]. Loan Performance - The Federal Education Loans segment generated a net income of $35 million, with a net interest margin of 0.84%[4]. - Consumer Lending segment reported a net loss of $76 million, with a significant increase in provision for loan losses to $155 million, primarily due to elevated delinquency balances[9]. - The greater than 90-days delinquency rate for Private Education Loans was 2.8%, reflecting an increase from the previous year[9]. - Provisions for loan losses increased significantly to $168 million in Q3 2025, compared to $37 million in Q2 2025 and $42 million in Q3 2024[21]. - The allowance for loan losses increased to $186 million for FFELP Loans and $406 million for Private Education Loans as of September 30, 2025[23]. - The total provision for loan losses was $68 million, with a gross charge-off of $301 million during the period[39]. - The net charge-offs for Private Education Loans were $29 million, representing 0.14% of average loans in repayment, while FFELP Loans had net charge-offs of $261 million, or 2.15%[39]. Revenue and Income - Total interest income for Q3 2025 was $781 million, a slight increase from $778 million in Q2 2025 but a decrease of $167 million (18%) from $948 million in Q3 2024[21]. - Net interest income after provisions for loan losses was $(26) million in Q3 2025, down from $91 million in Q2 2025 and $78 million in Q3 2024[21]. - The company reported interest income of $2.361 billion for the three months ended September 30, 2025, a decrease of $587 million or 20% from the previous year[22]. - The company reported a total of $4 million in net impact from derivative accounting adjustments for the quarter[56]. - Total other income for the quarter was $19 million, with servicing revenue accounting for $13 million[54]. Expenses and Liabilities - Operating expenses totaled $105 million, with $6 million related to transition services from strategic initiatives[4]. - Total expenses for the quarter were $110 million, including direct operating expenses of $61 million and unallocated shared services expenses of $44 million[54]. - Total liabilities were $46.867 billion as of September 30, 2025, compared to $50.746 billion a year prior[23]. - The company’s total equity decreased to $2.439 billion as of September 30, 2025, down from $2.694 billion a year earlier[23]. Shareholder Actions - The company repurchased $26 million of common shares and authorized a new $100 million share repurchase program[4]. - The company repurchased 2.0 million shares of common stock for $26 million in Q3 2025, with $26 million of unused share repurchase authority remaining[43]. - The company repurchased 6.4 million shares during the nine months ended September 30, 2025, resulting in a decrease of 12 million average outstanding diluted shares (or 11%) from the year-ago period[32]. Strategic Initiatives - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[66]. - The company expects to fund ongoing liquidity needs through cash on hand, operating cash flows, and potential additional debt issuance[42].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36228 Navient Corporation (Exact name of registrant as specified in its charter) Delaware 46-4054283 (State or other jurisdictio ...

Financial Data and Key Metrics Changes - The company reported core earnings per share of $0.20, adjusting for regulatory and restructuring expenses to $0.21 on a core basis [24] - The net interest margin (NIM) for Q2 was 70 basis points, nine basis points higher than the first quarter, exceeding the guided range of 45 to 60 basis points [25] - Provision expense for the quarter reflects a less benign macroeconomic outlook and trends in delinquency rates, with greater than ninety-day delinquency rates increasing to 10.1% [25][26] Business Line Data and Key Metrics Changes - Total loan originations in the first half of the year doubled to just over $1,000,000,000 compared to a year ago, driven by substantial growth in refinance originations [26] - In the Federal Education Loan segment, prepayments were $228,000,000 in the quarter compared to $2,500,000,000 a year ago, indicating historically low prepayment activity [25] - The consumer lending segment's net interest margin was 232 basis points in the quarter, down from 276 basis points in the first quarter due to loans entering delinquency [27] Market Data and Key Metrics Changes - The company expects the full year NIM to range between 55 and 65 basis points, reflecting a stable rate environment and low prepayment activity [25] - The elimination of the Grad PLUS loan program is expected to increase demand for private in-school graduate loans significantly over time [9][10] - The company has seen an increase in top-of-the-funnel traffic for its refinance product, attributed to changes in federal loan repayment plans [13] Company Strategy and Development Direction - The company is focused on expanding opportunities in the graduate student segment, which represents a significant portion of its loan origination volume [11][49] - The company aims to achieve $400,000,000 in expense reductions as part of its strategic initiatives [18] - The company is well-positioned to benefit from increased market opportunities in refinance and in-school products with the graduate school customer segment [16] Management's Comments on Operating Environment and Future Outlook - Management noted that low levels of FFELP consolidation activity enhance interest margins and increase lifetime cash flows [19] - The macroeconomic outlook and delinquency trends contributed equally to the provision expense on previously originated private and self loans [20] - Management expressed confidence in meeting ambitious expense reduction targets and indicated that the upcoming changes in federal loan programs could significantly benefit the company [12][22] Other Important Information - The company completed its inaugural in-school ABS deal, which was nearly six times oversubscribed, raising total gross cash proceeds of roughly 98% of loan principal [15] - The company repurchased $24,000,000 worth of shares under existing authority and returned $40,000,000 to shareholders through share repurchases and dividends [21][33] Q&A Session Summary Question: Concerns about reserve true-up and delinquency trends - Management acknowledged positive trends in early-stage delinquencies but noted elevated levels of delinquencies versus internal expectations, indicating they feel appropriately provided from an allowance perspective [39][40] Question: EPS guidance and TSA costs - Management clarified that TSA expenses for the quarter were $13,000,000, offset by $14,000,000 of revenues, and indicated that they anticipate TSA expenses to continue through the back half of the year [41][44] Question: Opportunities from Grad PLUS reform - Management highlighted that the elimination of Grad PLUS presents substantial opportunities in the graduate student market, with a focus on high-quality borrowers [48][49] Question: Market share and capacity to meet demand - Management expressed confidence in maintaining a 20% market share in the graduate market, emphasizing their established distribution channels and product offerings [64][66] Question: Balancing growth and capital allocation - Management indicated that they will continue to balance investments in growth with shareholder distributions, leveraging their strong balance sheet and capital-efficient financing strategies [70][73]