Sallie Mae Cuts 2026 EPS Forecast to $1.95-$2.05, Raises Charge-Off Outlook

Sallie Mae cut its 2026 earnings forecast and raised expected loan losses, reducing its profit outlook as it expects to forgo an October loan sale.

The revised diluted earnings forecast is $1.95-$2.05 per common share, down from $3.10-$3.20. The company raised its full-year net charge-off range to $400 million-$420 million from $365 million-$385 million. It kept its outlook for private education loan origination growth at 12%-14% and noninterest expenses at $750 million-$780 million. Sallie Mae issued the updated guidance Oct. 22.

CEO Jonathan Witter said the earnings reduction primarily reflected the decision to skip the final loan sale planned for October. “At this time, we do not anticipate executing our final loan sale for the year, which was previously planned for October,” Witter said on the earnings call. He said higher interest rates and more volatile capital markets had pushed expected premiums below the company’s minimum acceptable level.

Sallie Mae linked the higher charge-off outlook to what it called “misaligned third-party debt resolution practices,” saying the issue affected a relatively small number of borrowers it believed could pay. Witter said the company’s recovery strategies were gaining traction, though borrower adoption had been slower than expected.

For the quarter ended Sept. 30, the company recorded a GAAP diluted loss per common share of $0.19, compared with earnings of $0.63 in the year-earlier quarter. Net charge-offs were $90.4 million, and delinquencies stood at 4.2% of loans in repayment as of Sept. 30.

Private Education Loan originations reached $3.4 billion, up 15% year over year. Graduate Loan originations increased 119%. Sallie Mae described the period as a record peak season, with its largest quarterly origination total in company history. The third-quarter results also included the per-share loss.

The revised outlook leaves the company’s loan growth and expense targets intact while lowering its expected earnings and raising its charge-off estimate.