Key Takeaways
- Sallie Mae shares fell 9% today after the company posted a third-quarter loss of $0.19 a share and cut its 2026 EPS guidance to $1.95–$2.05 from $3.10–$3.20.
- This year’s hit comes from a small group of borrowers and a delayed loan sale, and the rest of the loan book is holding up.
- Sallie Mae said borrowers have been slower than expected to take up its fix, and it raised its 2026 net charge-off forecast to $400 million to $420 million.
- Fourth-quarter results will show whether charge-offs from that group are starting to ease.
Sallie Mae (SLM) shares are down 9% today after the student lender reported a third-quarter loss on Thursday evening and slashed its 2026 earnings guidance by more than a third.
Record loan growth couldn’t make up for a credit problem that’s taking longer to fix than hoped.
The details
Peak season was a record: $3.4 billion of private student loans in the third quarter, up 15% from a year earlier and its biggest quarter ever. Graduate loans grew 119% after federal changes to the PLUS loan program.
The rest of the report was rough:
- A GAAP loss of $0.19 a share, against a $0.63 profit a year earlier
- Net charge-offs of $90 million, up from $78 million
- Gains on loan sales of $4 million, down from $136 million
- 2026 EPS guidance cut to $1.95 to $2.05, from $3.10 to $3.20
Why borrowers who can pay are defaulting
The charge-offs come from for-profit debt-resolution firms telling borrowers with good credit to stop paying, so the firms can negotiate a settlement. Sallie Mae says those borrowers go straight from delinquency to default.
The company said its fix is gaining traction, but borrowers have taken it up “slower than anticipated.” So it raised its 2026 net charge-off forecast to $400 million to $420 million.
Outside that group, CEO Jon Witter said on the third-quarter call that performance was “in line with or slightly better than our expectations.”
The guidance cut also reflects a planned loan sale Sallie Mae put off, which moves those gains out of this year.
TIKR tracks 11 analysts on Sallie Mae. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Sallie Mae, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Sallie Mae’s Analyst Ratings
Priced like a lasting problem
Analysts expect normalized EPS to climb back to $3.16 a share in 2027 and $3.57 in 2028, past the $3.46 Sallie Mae earned in 2025…
But the stock is priced like that rebound is in doubt. Sallie Mae closed Thursday at 2.0x tangible book value, well below its five-year average of 2.6x…
After today’s drop, it’s closer to 1.8x, just above its five-year low of 1.7x from February.
My take: this year’s hit comes from a small group of borrowers and a delayed sale, and the rest of the book is holding up. At closer to 1.8x tangible book, the market is pricing in a much longer slump. That looks like an opportunity to me.
Of course, the fix has already taken longer than Sallie Mae expected. Fourth-quarter results in late January will show whether charge-offs from that group are finally easing.
So what is Sallie Mae stock actually worth?
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