Sallie Mae earned 29 cents a share as its margin narrowed, and it is spending ahead of a peak season reshaped by PLUS reform

A family that loses access to a federal PLUS loan becomes a prospective private borrower. Sallie Mae is spending in advance of that.

The lender reported second-quarter GAAP diluted earnings of 29 cents a common share on July 23, down from 32 cents a year earlier. Net income was $59m, of which $55m was attributable to common stock, against $71m and $67m in the same quarter of 2025. Private education loan originations rose 4.5 percent. Average loans outstanding, net, were $21.1bn.

Non-interest expenses were $195m, up from $167m a year ago, as the company launched what it describes as new and enhanced loan products "in preparation for peak season expansion due to PLUS reform." Sallie Mae said full-year non-interest expenses remain consistent with its guidance.

The margin narrowed. Net interest margin was 4.75 percent, against 5.29 percent in the first quarter and 5.31 percent a year earlier. Cost of funds was 4.13 percent, against 4.22 percent a year ago, which the company credited for supporting the quarter's earnings. Net interest income was $333m, down from $377m. Private education loans held for investment ended the quarter at $19.5bn, against $21.2bn a year earlier, after loan sales of $3.3bn in the first quarter and $420m in the second.

Provisions for credit losses were $126m, against $149m a year ago. Net charge-offs were $113m, an increase from the year-ago quarter, which the company said it believes was driven primarily by misaligned third-party debt resolution practices affecting a small segment of borrowers moving straight through delinquency to default, and by related changes to its recovery strategies. Delinquencies were 3.72 percent of loans in repayment, against 3.51 percent.

For the full year Sallie Mae guided to diluted earnings of $3.10 to $3.20 a common share, originations growth of 12 to 14 percent, net charge-offs of $365m to $385m and non-interest expenses of $750m to $780m. A $200m accelerated share repurchase concluded in June, taking 9.3 million shares in total, and $242m of capacity remained under the 2026 authorisation at June 30.